This past Sunday I went out to Fontana, Calif. a city about 50 miles east of Los Angeles in a region known as the Inland Empire. On a list calculated for us by First American Core Logic, Fontana popped as number four in the whole country, among cities with the largest increases in real estate sales in the fourth quarter of last year. The sales continue at a blistering place recently, up 257% in February compared to a year earlier, according to DataQuick. The 307 Fontana home sales was the highest number recorded for any February there going back to 1988. Over the next couple of blog posts I’ll tell you about my tour of Fontana.
The city began as an agricultural community, something evident in the names of its streets, Cherry, Citrus, Mango. Today it’s the convergence point for three big Southern California highways and railroad lines. That’s made it a major distribution center. The 210 freeway was extended out from Los Angeles to Fontana in 2002. Local Realtor Lori Bartosh told me she can remember during the boom years how when each Inland Empire city popped above the magical $300,000 home price number, the next city east started getting hot, Upland, Rancho Cucamonga, Fontana, Rialto.
Home prices doubled to a peak of $450,000 in Fontana, as the vacant land north of town quickly got filled in by new home construction. The city built a new civic center, a $60 million library, a Nascar racetrack on the site of the old Kaiser steel plant. Then it all came crashing down. Recently city hall has had to lay off workers. Foreclosures surged, and speculators stepped in.
Driving north on Sierra I followed Bank Repo sales signs and met agent Eliana Badiola of Monaco Realty. She was all smiles because she had just sold the last house in a little community called Fontana Villas II. That’s the house above. The four bedroom home had been listed at $550,000 last year. Unable to sell it for that, the developer worked out a deal with its lender to sell the homes for less. Now they were moving. This last one, listed at $299,000 now has four offers.
Driving around some more I met Steven Landis and his family inspecting a foreclosed property they had just bought for $80,000. It had sold in 2006 for $325,000. Landis said they had paid cash and agreed to a three day inspection period. Such properties are getting multiple offers but since Landis had worked with the broker several times before he thinks that helped them win. He’s been fixing the houses up and flipping them, having sold 8 of the 12 they had bought in recent months.
Across the street though, Jackie (she wouldn’t give her last name) was having trouble. Her family—ironically the same people who had developed Fontana Villas II I believe—had bought this foreclosed house last year and prices had come down since. That’s the house in the picture below. It’s listed now at $125,000. Jackie said her family was going to have to sell it for less than they paid.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.