Wednesday, February 15, 2006

Slowdown Blamed on the Rain in Redding, Media Hype in Roseville

The rain is to blame for the lull in the Redding housing market, according to one real estate agent quoted in the Redding Record Searchlight.

Palomar Builders Inc. single-handedly kept Redding's home construction industry buzzing last month. The mega builder pulled 66 single-family home permits in January, a one-month record for Palomar and three-quarters of the total the city's permit center issued. But while Palomar Builders is busy building homes, it's also working harder at encouraging consumers to buy into a cooling housing market. Most of Palomar Builders' permits were for its Shasta View Gardens subdivision, which shares land with Palomar's Autumn Glen subdivision, where move-in specials are being advertised. Consumers are promised guaranteed interest rates with low loan fees if they buy a home in Autumn Glen, where prices start around $350,000.

Jeb Allen, owner of Palomar Builders, said the incentives are a preferred strategy over cutting prices. "We're not going to get stuck in a big price reduction," Allen said. Redding real estate agent Wayne Martin said the housing market is in a "good place." He believes if homes are priced right, they will sell. "I don't see a need to cut prices. We are moving out of a hyperactive market, where you could just throw something out there and have a number of offers," said Martin, who owns Real Estate 1 in Redding. Martin said about six months' worth of available homes are for sale on the market today, up from four months' worth of inventory last fall.

Veteran real estate agent Rob Middleton agrees that the market is settling down. "More reality is coming back into the focus and people have enough time to breathe, look, decide and make choices," said Middleton, co-owner of House of Realty. Martin blames some of the lull in the market with last month's wet weather. He believes the recent spell of spring-like temperatures could energize home buyers and stimulate sales...

Nagel speculated that 2006 might see a slowdown in real estate, which could result in fewer housing starts. The city recorded a 15-year high with 720 single-family home permits in 2005. "If you go to Sacramento and some other areas of the state, you have seen a real noticeable drop-off" in real estate, Nagel said. "Typically, what happens in the Bay Area is followed in Redding a couple of years later and what happens in Sacramento, happens in Redding a year or so later."
As for the cooling Roseville housing market, one agent feels that the possibility of a real estate crash is mostly media-driven hype. Interestingly, this agent believes the market bottomed out last summer and is already on the rebound. From the Roseville Press-Tribune:
Craig Seydel, a realtor with Re/Max Gold, feels the market has slowed down but that's a relative to how bullish it was last year. And after a motivational seminar at Arco Arena on Wednesday, he summed up his thoughts on the feasibility of a market crash. Essentially, he's not buying the hype, which he feels is mostly media-driven."Zig Ziglar said the media have correctly predicted 18 of the last three recessions," he said.Sellers must create a virtual tour for online listings, a key, he said, in attracting potential buyers. Also, some bring in professional stagers to utilize furniture and flower and candle arrangements to spruce up a listing.Seydel believes the turnaround from the low point - which he believes was last June or July - is already under way.

"For the last three weeks of January, we got over 100 repeat visits to our Web site, where during the downturn I was getting half that," he said of his Web site, "There's nice weather, and people are out driving around. And (lending) rates are very attractive. Although they say they will be up in high 6 percent range through the end of this year, that's still pretty good."
Boy, I got over 600 returning visits in the last 3 weeks of January but I don't think I'd rely on that to determine where the market is. Now that I've linked to his site, perhaps he'll think the market is exploding starting today ;->

Then there is the story of this house:
A few blocks away, at 678 Young Way, investor Kevin Woody has a three-bedroom, two-bath, 1600-square-foot home that has been on and off the market since he purchased it in September. The house two doors down is on the market as well, with no one living in it. Woody's place is clean and neat, and a year or so ago probably would've been snapped up in mere days considering its proximity to the Galleria, good schools and the neighborhood.

"I've been buying houses for 27 years. I've seen the market go up and down. This house shows very well, and a lot of people have been shocked it's even still on the market," said Woody, who owns KD Properties. He typically has about 10 houses on the market at any given time. "The market's very peculiar. I watch it constantly. Roseville was one of those markets that got smoking hot, but now there's a lot of very cautious buyers out there. They all want fantastic deals."

He bought the home - which he said was appraised at $445,000 - at an auction for $356,000. The previous owner had not been able to keep up with the payments due to a creatively comprised financing deal that ultimately proved unmanageable. Between interest-only loans and second and third mortgages, those easy-in deals are increasingly less common as lenders tighten up criterion, he said. Because of this, he was able to get a good deal on the property at auction."It's gonna happen a lot over the next 12 months," he said of loan defaults. "The owners borrowed 100 percent against its value and in a typical scenario, they couldn't keep up with the payments."Since buying the property, it's been on and off the market he said, putting upgrades into it, including some additional landscaping. It's now listed for $405,000.


arizonadude said...

Have people finally realized they are getting screwed on these ridiculous home prices? Roseville is way overpriced and due for a major correction. hopefully I can get a good deal on a forclosure in a year.

Arizona market is dropping off too. Listings are piling up and days on market increasing.

Hopefully this will teach people a big lesson.

Thank you for your work on this blog.

crisp&cole said...

"just throw something out there and have a number of offers"


Sounds like they were building some quality homes?!?!?!?

Anonymous said...

That's an optimistic real estate agent who believes that the low point ALREADY happened and that the turnaround is under way!!!

fishtaco said...

I think Mr. Seydel is neglecting to consider the particularly nasty and persistent diarrhea bug that was going around the Sacramento area this past month. This in combination with the wet weather and possibly the ludicrous home prices has very likely contributed to the drop off in interest and sales. I it hard to get around to view houses when one is painfully ill and it is raining.

Lander said...

Something must be in the water in Placer County. This agent/appraiser also thinks Placer is trending back to a sellers market. Then again, Sacramento County is ground zero for declining prices.

Rick Goates said...

With over 1700 homes on the market in Redding California-yes it's a buyers market now.Things are not going down-Yet, but if the inventory continues to climb we might see a small decrease in prices. To see all the Redding California homes on the local Realtor's MLS right now go to and search for free.

hopefulblues said...