Friday, July 21, 2006

Another Home Builder Singles Out Sacramento

Boy, this sure is getting to be familiar. The latest confessional brought to you by D.R. Horton.

"I know every time we've gone into a downturn in the home building industry, they've always been longer and deeper than we've all imagined," D.R. Horton chief executive Donald Tomnitz said. "So we're preparing for the worst, and we think this one will be longer and deeper than just the last six months..."

Tomnitz pinpointed San Diego and Sacramento in particular as having poor sales activity. He said the company was still having success in some other parts of the state.

7 comments:

Happy Renter said...

Lander,
This is from the LAtimes. There has been a complete retraction of the "soft landing scenario" from the women that coined the term.

“Leslie Appleton-Young is at a loss for words. The chief economist of the California Assn. of Realtors has stopped using the term ’soft landing’ to describe the state’s real estate market, saying she no longer feels comfortable with that mild label.”

“‘Maybe we need something new. That’s all I’m prepared to say,’ Appleton-Young said Thursday.”

“The Realtors association last month lowered its 2006 sales prediction. That was when Appleton-Young first told the San Diego Union-Tribune that she didn’t feel comfortable any longer using ’soft landing.’ ‘I’m sorry I ever made that comment,’ she said Thursday.”

“For real estate optimists, the phrase ’soft landing’ conveyed the soothing notion that the run-up in values over the last few years would be permanent.”

Anonymous said...

"So we're preparing for the worst, and we think this one will be longer and deeper than just the last six months..."

Wow, what a visionary. What happened over the last 6 months is barely even the tip of the iceberg. Grab a life preserver, cause this ship is going down!

Agent Bubble said...

Here's the artcile...Very interesting:

http://www.latimes.com/business/la-fi-soft21jul21,1,3893046.story?ctrack=1&cset=true

Happy Renter said...

This crash is really starting to warm up.

Anonymous said...

Having moved from San Diego to Sacramento over the last month or so, its interesting to see the similarities in the two markets. We sold our home in San Diego during the summer of 2004, took the profits, and decided to rent for a few years. If you are married, the government is willing to let you have $500,000 tax free (if your meet certain criteria) and we figured there's no better deal on the planet. We didn't hit the top of the market but we weren't too far off. The price on our home had doubled over a three year period and people were literally knocking on the door making ridiculous offers. During that mania, we took one of those offers. We left our home believing we could buy it back for 35 to 40% less than we sold it for at some point in time. It looks like that time might not be too far off. No market whether its the stock market or real estate market or commodities market goes straight up for 4 or 5 years without correction. How deep the correction is or will be is directly dependent on how far out of whack pricing has become relative to value. If a $500,000 home looks like and feels like a $250,000 home, the market will find its true value. We intend to buy again, but not for another couple of years. It might be a risk and we might not be able to get back in, but we'll chance it and see what happens.

Anonymous said...

anon:

I think you pretty much explained yourself why it won't be a risk. Don't worry, you'll get back in, and at the discount price you mentioned.

Max said...

Flippers in Trouble Update

I went ahead and created a dedicated blog for the Sacramento flippers in trouble phenomena:

flippersintrouble.blogspot.com

There was so much demand, I figured it deserved its own special place on the web.