While much of the South Bay has been somewhat immune to the wave of foreclosures and short sales that have been so prevalent in much of Southern California, unfortunately the townhomes of Fusion South Bay haven’t been so lucky. Of the 6 homes that are on the market, or currently in escrow, 5 are either short sales or bank owned which is an unheard of ratio in the area.
|P831850||Active||5403||149TH PL #3||$ 364,900||2/3.00||2007/ASR||1410||REO|
|V12041598||Pending||5412||149th PL #7||$ 345,000||2/2.00||2007/ASR||800||Short Pay|
|V12063595||Pending||5511||149th PL #7||$ 348,100||2/2.00||2006/ASR||800||Short Pay|
|S12090059||Pending||5506||149th PL #8||$ 385,000||2/2.00||2007/ASR||1067||Short Pay|
|S12055041||Pending||5404||149th PL #12||$ 499,900||3/3.00||2008/BLD||1790||Standard|
So why is Fusion impacted so much more than surrounding areas. Unfortunately it’s the perfect storm for foreclosures and is due to a number of factors.
- Timing – The project was built in 2005 and 2006 so the original home buyers bought at the very peak of the market, and just before the bubble burst.
- Owners – Most of the units were purchased by two types of buyers. Many units were purchased by first time home buyers with access to loose lending and somewhat risky loans. In addition many buyers purchased in Fusion as a “stepping stone” with no intention of remaining there for long. The other primary buyers at the time were investors thinking they would make good rentals (which they have) but as they were second or even third homes they were also more susceptible to the downturn.
- Self fulfilling prophecy – Just as the specter of the “shadow inventory” has many buyers and sellers concerned, this actually is the reality in Fusion. As there have been so many short sales and foreclosures, it has driven the price down considerably leading to additional short sales and foreclosure. Prices have dropped considerably and until the wave of distressed sales is resolved there is no clear turn around in sight.
- Litigation – for all of 2011 there was pending litigation due to what the HOA considered builder defects. While the issue was being resolved there was no lending available which limited any sales to cash buyers only which hammered prices even further.
Fusion is a great option for buyers looking to be near the beach, with good schools, in a gated community and very new construction for the area. Prices are now favoring buyers looking to get in at the right time. Unfortunately there are 2 sides to every issue and as I’ve sold numerous Fusion condos to some wonderful people, the “great deal” that Fusion has now become isn’t so great for everyone.