More Signs of Housing Market Decline?
Formica Corp. to close Rocklin plant, lay off 318
RE/MAX of Auburn, RE/MAX Gold merge
RE/MAX Central merges into RE/MAX Gold
JMC Homes to offer $130,000 in upgrades
New home starts drop in most of Central Valley
City’s growth slows, growth rate is the city’s lowest since 1998
"Redding’s building boom could be churning out a glut of new housing, said real estate broker Greg Lloyd, owner of the Real Estate Center and president of Shasta Association of Realtors."
Is the great Tracy population-boom busting?
"'There are 568 resale homes on the market right now,' she said. 'Last year at this time, there were between 80 and 90.'"
6 comments:
Prices have to come down as long as Uncle Alan and Uncle Ben are raising interest rates. It is simple math:
At 5% 30-yr loan, a $60k year family qualifies for a loan of about $335,000.
At 6%, using the same assumptions, the affordable loan drops to $300,000.
In order for a home to match the same income strata at 6% as at 5%, there has to be a price drop of about 10%. Market forces always seek equilibrium, sooner or later, between buyer and seller. High inventory and foreclosures will make the 10% go even higher.
I don't really think a 60k family can afford anything in the 300's. Is the rule half to two thirds of your income towards mortgage these days? I think even at 5% they would be wise to spend no more than 200-220k (fixed rate of course).
Repost - Perhaps you can answer my question, having spent the first 24 years of my life in Sacramento I am now extremely confused-
Can somebody answer the question I've been asking myself for the last couple years? I've been watched Sacramento real estate thinking I might want to move back to Sac someday and realize the dream of home ownership. I want to know why anybody would buy a house in Rio Linda/Oak Park/Del Paso Heights/North Highlands/Most of S. Sac for 350k up? Have there been buses running 24/7 shipping violent criminals and meth lab operators out of town in the 6 years I've been gone? In 99' you bought a house in those hoods cuz they cost 80-100k. Plenty of money left over for a shotgun and alarm system. Last time I was in Rio linda there were dirt roads and tons of stray dogs, also, I seem to recall Rio linda floods every year. Is it mass mental retardation? I mean, what's the mortgage on 350k, like 2,100 a month before insurance/cars/kids? The few friends I have who have moved to Sac from the bay area have had a difficult time finding a job and then were offered very very little $$. One example, a paralegal who was making 60k in Oakland was offered 28k at 3 places before taking a job for 37k. After buying a car (out of need in Sac) her cost of living was the same as in Berkeley! needless to say, she can't even afford a shack in North Highlands. What's going on in Sacramento?
Anyone?
I live in El Dorado Hills (suburb of Sacramento) and have been watching in amazement as the prices have risen into the stratosphere. I am finding some evidence of a rush to the exits. There are still a lot of sellers in la la land and think that there is no slowdown. But a glance through Ziprealty shows that pressure is building up.
In the town that I live in, I do not see an economic support for housing. There are 4 reasons that home prices were primed upwards during the last few years 1) trade-ups 2) bay area transplants 3)first time buyers with exotic loans and 4) speculators. My guess is that #3 and #4 accounted for about 35% of purchases and this is the category that has vanished in the last few months.
i'm seeing price reductions of the tune of 10% so far. But given the paucity of buyers and the buildup in inventory, I predict that prices will adjust by at least 20% this year.
No softlanding scenario here ...
qualifying ratios for loans are above 50%.first franklin will do a 100%,stated income,no asset verification loan to $1 million,owner occupied,680 fico,55.9% debt to income ratio....this is stated,unverified,gross income.interest only is an option.there will never be a shortage of fools,but are you a bigger fool if you buy a pool of these diseaed turkeys,or if you buy that investment grade condo in south sac?
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