Thursday, May 11, 2006

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.'"

11 comments:

Anonymous said...

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.

Happy Renter said...

Citrus Heights just took a hit.

http://ziprealty.typepad.com/marketconditions/sacramento_real_estate/index.html

Anonymous said...

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).

Happy Renter said...

$600,000 for a house in Rancho Cordova. Ha!
http://sacramento.craigslist.org/rfs/159970442.html

$450,000 for a duplex deep in South Sac.
http://www.craigslist.org/eby/rfs/160143876.html

People seem to believe if its in Sacramento its worth 1/2 a million dollars, even if it's in the Getto's. I wouldn't live in either place even if the homes were $150,000. I learned years ago that if you live in a nice pocket, in a bad area, your everyones victim.

Happy in SF said...

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?

Happy in SF said...

Anyone?

Happy Renter said...

Happy in SF,
Absurd isn't it?
In the past few years,everyone has been convinced Sacramento housing was going to end up like the bay area, which it has. Speculation, along with fear of being priced out forever has put prices in this grossly unsupported realm.This attitude sucked the market dry of homes for the past few years. Now their is plenty of homes both new and resale available. This market more than any other in the nation is headed south. To bad the real estate dependant local economy is headed with it.

Anonymous said...

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 ...

fishtaco said...

let's see, overpay for a extra large home that requires a commute. throw in a terrible neighborhood and sky high heating and cooling costs and what do you get? Complete fools buying in what were once considered flood plains. What is most telling is that all of the new buyers have left. Also check out craigslist houses and notice that each ad title ends with "!". Okay I think I will look at your ad and perhaps buy your home now that you included the "!". There is one listing in an around davis that was dropped from 1.9 mil to 1 mil.

tom stone said...

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?

Happy Renter said...

Free Mercedes if you take on a lifetime of debt.

http://www.sacbee.com/content/business/story/14255023p-15070442c.html