Riverside Housing Market: A Speculators Swap Meet

The small blue home Kenneth Yeh wants to buy is a sign of the times. In fact, it's adorned with them—"Foreclosure" in multiple colors, "No Trespassing" taped over the windows, "Bank Owned" staked in the front lawn. The first-time investor is hoping to place a winning bid on the house and then rent it out.

"It's a pretty nice neighborhood," said Yeh. "UC Riverside is only like a couple miles away, maybe I could rent to some students."

Yeh is one of the few speculators still buying homes in Riverside during an otherwise depressed market. And like many of them, he's a discount shopper.

While home prices in most of California rebounded last month from a year ago, Riverside County's numbers dropped. The county also suffered a 4.8 percent drop in home sales compared with a 15.4 percent rise in Los Angeles County. So many of the homes that are selling in Riverside are changing hands at a deep discount.

The median house price did not change from last January, staying at $195,000, while other areas of Southern California jumped. But Riverside County Realtor Rick Brusca said the median pricing is in itself an imperfect measure of the weakness of the market.

"If you have no upper end selling, the median price is going to drop," he said. "At this point 90 percent of our sales are under $450,000, so it is not the perfect indicator."

Brusca, who works for Westcoe Realtors Inc., said reports of homes sales dipping are also skewed because of lack of inventory. He said that the lower-priced homes that were sold over the past few months left a dearth in the number left on the market.

He also said that there were fewer foreclosed homes on the market, but that could change if another wave of foreclosures happens in the coming months.

Brusca added that most buyers were investors looking to flip the house or rent it out.

"Speculators are coming in with all cash," he said. "That is good for a bank or short seller, but makes it real tough for first-time buyers and families."

Last month 36.2 percent of Riverside homes were sold for cash, a record amount.

But speculators flooding the market looking for the best deal and swapping one for sale sign for another doesn't do much to help the community rebuild.

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