Monday, April 17, 2006

Sacramento Homeowners Party like it's 2004?

From the Sacramento Bee:

After four years in which Sacramento-area homeowners greatly expanded their spending by borrowing almost $22 billion against soaring home values, lenders believe there's plenty more coming - even with rising interest rates and a plateau in home prices.

While years of double-digit percentage growth for home equity loans has slowed slightly, bankers, pool contractors and home remodelers say the spending binge fueled by home equity appears on firm ground to continue in 2006. "Compared to the last few years, it's slower than it has been, but it's still relatively strong," said Sandy Thompson, Sacramento district manager of Minneapolis-based US Bank.

Thousands of area businesses and a regional economy have prospered as homeowners lavished their rising equity-based wealth on home remodeling, swimming pools, motorcycles, boats, cars and colleges. Many economists say the surge of consumer spending is closely tied to rising home values and worry that falling values could trigger the opposite.

Since 2002, more than 300,000 homeowners in Sacramento, El Dorado, Placer and Yolo counties have borrowed or opened equity-based lines of credit for $21.9 billion, according to La Jolla-based DataQuick Information Systems...

In Woodland, DeJong said customers who spent $2,000 to $4,000 for countertops five years ago now tap home equity to spend $10,000 to $15,000. "There's still a lot of money in this region," he said. "You'd just be surprised what people spend."

2 comments:

Happy Renter said...

"300,000 homeowners in Sacramento, El Dorado, Placer and Yolo counties have borrowed or opened equity-based lines of credit for $21.9 billion"
Does anyone have any figures for the number of homes in Sac and percentage of the economy that 21.9 billion is.

sf jack said...

$21.9 billion/300,000 homeowners = $73,000 in HELOC's each!

Yowza.

Just a quick estimation:

The area has what, ~2 million people? Half or more are kids? So *maybe* 1 in 3 adults have borrowed almost $75,000 on their dwellings?

Hmmm....