Friday, July 28, 2006

The Sacramento Housing Market & Skydiving



What's that falling? Is it a skydiver or the Sacramento housing market? From Marketplace:

TAMARA KEITH: It's a baking hot Sacramento Saturday and a couple of dozen parents and kids have gathered in a vacant lot to watch sky divers, with their colorful parachutes, float to earth. It's all part of a plan to lure buyers into a set of model homes in the Woodbury Glen development just steps away.

ANNOUNCER: And here he comes, your last diver carrying the Standard Pacific Homes flag.

This event was heavily advertised in the local paper and on the radio. Jackie Shipley is VP of sales and marketing with Standard Pacific Homes, the builder behind this community. There was a time when stunts like this weren't necessary, but with all the doom and gloom talk about a bursting bubble, Shipley says in recent months buyers have been more apprehensive...

A year ago, there were waiting lists and lotteries just to get a chance to buy a new home in the Sacramento region. Now the tables have turned. Most home builders have standing inventory, completed homes sitting empty.

Valerie Condie is director of sales for the California division of Lakemont Homes. She recently launched a promotion offering up to $100,000 off the high-end properties in the Waterstone at Morgan Creek community. She says incentives help some buyers get past their jitters about a volatile market and rising interest rates. And, she reminds folks, those rates could be worse...

That may be so, but home shopper Tony Prekash says he sees no reason to rush.

TONY PREKASH: Right now buyers have the upper hand. You can say OK, well, you're giving me 70-grand for upgrades or closing costs or a combination of both, but the other one is giving me 100-grand. I'm going there.

5 comments:

rocklin renter said...

I R O N Y

Anonymous said...
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smoggiebakersfield said...

These dumb homebuilders are going to get stuck with their inventory. Oh’ they are stuck, seeing that the homes are sitting there and they are holding stupid events. They very well could have had a large turnout, to see the free entertainment. And how much are your homes going for? Oh’ $500K…well sign me up for two! My word too them is lower the Price and forget about the crap!

Anonymous said...

Even the best P T Barnum act can't save the builder in this market. Upgrades? Who needs $70,000 in upgrades if the prices are $200-300,000 out of whack? Don't underestimate the herd in this market. They rushed in to push it up and they're staying out to push it down. When it finds a bottom inventory levels will be at normal levels...some level far below the current inventory that's in stock now. This was a straight up market for nearly 5 years. In some areas there's 100% plus appreciation. To give half would not be unreasonable. Frankly, IMHO, there's a good chance price reductions could reach year 2000 levels before they begin to stabilize.

drwende said...

Take a look at the stock of major builders such as Centex, and you'll see just how appropriate dropping FAST from a height is.