Sunday, August 06, 2006

Elk Grove: From Hot to Cold

More news on the so-called fastest growing city in America. From the Sacramento Bee:

On 1,900 wide-open acres, where valley oaks and grasslands make a spectacular setting during winter fog and summer sunsets, developers plan nearly 8,000 more homes, a civic center and five schools for one of California's fastest-growing cities. But this time builders are facing an entirely different experience. East Franklin was built on the boom; Laguna Ridge is beginning as that boom rapidly recedes into history. "We would have loved to be in the market two years ago," said Laguna Ridge project manager John Hodgson, president of the Hodgson Co. in Sacramento...

In their contrasts, East Franklin and Laguna Ridge represent a microcosm of the capital region. Builders who sold 17,155 single-family homes at the height of the 2004 boom in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties will consider themselves fortunate this year to sell 12,000. Statewide, developers expect to build as few as 170,000 residences this year, compared with 213,000 in 2005.

In Elk Grove, builders who took out almost 3,000 building permits in East Franklin in 2004 now expect to sell no more than 500 homes -- if that -- a year at Laguna Ridge. A dream hatched in Elk Grove during a building boom that created fortunes and made heads spin may actually take up to 10 years to build out, after all.

"You go back two, three years, the anticipation was Laguna Ridge would be as fast as East Franklin," said Constantine Baranoff, who as associate superintendent of facilities and planning at the Elk Grove Unified School District is charged with forecasting where the growing district will build its schools. "All the hype, all the discussion, all the confidence level was just as significant. People said, 'There's no letup. People are moving and moving and moving.' "

That's all changed. Now the district, which expects about 6,500 students at five Laguna Ridge schools, has delayed opening its first high school in the area until autumn 2008. The original date was 2007...

The city also has set a limit on home building -- 1,200 permits a year. The idea is to maintain an orderly development pace in contrast to the big bang that built East Franklin. If current market trends prevail, remaining within that limit clearly will not be an issue. As the Laguna Ridge infrastructure work continues, the school district's Baranoff watches and waits. He says he'll set his timetables for new elementary schools "once I see the houses." At the moment, he said, "The only significant marketing I've seen is by Del Webb. And I don't think we'll get too many kids out of that."

21 comments:

Agent Bubble said...

I'm an Elk Grove Realtor, and I've been tracking homes in Elk Grove since the beginning of May (same time I sold my house). Here's a link to a PDF file I created that contains some stats. If anyone wants the Excel file, just let me know.

www.sierraothg.com/temp/Real_Estate_Stats.pdf

The important findings from these stats are that for any given price range, two things are happening: 1) the average square feet for homes are increasing; and 2) the price per square foot is decreasing.

Anonymous said...

Watch housing prices in newer parts of Elk Grove drop like a rock.

Liar nodoc loans

greedy flippers from the bay area that are renting their houses to anyone that can sign their name on a lease (like indooor pot farmers)

Interest only neg am loans

Section 8 tenants trashing new neighborhoods.

Ghetto type people coming to the new neighborhoods and bringing their bad attitudes to a family setting.

Houses with three families sharing the mortgage

People cooking in garages

Cars all over the friking place.

No down payment loans

Interest rates start adjusting in 2007 - 2008.

Doubling of mortgage payments.

Overpriced houses sold to chumps (example; East Franklin AKA Florin Road South)

Lousy low paying jobs in Elk Grove

Higher crime rates

Higher gas prices for the commuters to Folsom and Sac.

Yes, values will crumble in the newer areas where people got ripped off big time by the developers.


All these people that bought way too much house for their income are going get hammered by interest rates gas prices for their high priced SUV's, etc.

norcal ray said...

It looks like it will get very bad in Elk Grove. Some of those BA flippers got ripped off by the developers. Those that got in late are going to lose big money.

Good thing you sold divotmaker. Anything moving lately.

Anonymous said...

divotmaker;

Are you from Elk Grove online?

Your observations have been very on the mark!

Anonymous said...

anonymous,

Regarding EG Online...Send me an e-mail to:

agentbubble |at| gmail |dot| com

Anonymous said...

Here's the link:

http://www.elk-grove.com/

Anonymous said...

The days on market in the PDF don't seem that bad.

Can a realtor take a house off the MLS and then relist to set the Days on Market back to Day One?

Agent Bubble said...

Yes, that's a very common tactic to avoid the stigma of an old listing. It happens VERY often.

divotmaker said...

anonymous,

Regarding EG Online...I meant I wanted you to send me an e-mail so we could talk further.

Anonymous said...

Anonymous;

I'll be off the computer for a week or so. I'll send you a email next week so we can talk about the housing bubble.

Gwynster said...

of all the things to happen in Davis... everyone said it could never happen here:

3/1 SFR around the corner up for sale and the owners are taking a haircut. They bought for $427K in Oct of 05' and are now down to $415K asking.

What kills me is seeing 3 brm SFRs here coming down to under 400K. I still think we have another 25% to come down here in Davis, even more in places like Dixon and Woodland.

Anonymous said...

"divotmaker;

Are you from Elk Grove online?

Your observations have been very on the mark!"

Thought that was you.

Yes that was my link to this site on www.elk-grove.com.

Judging from above;

Sounds like there are a bunch of other EG residents that are equally concerned about the market.

"Housing Bubble" (not verified on EG Online so can't reply). See you guys next week.

Anonymous said...
This comment has been removed by a blog administrator.
drwende said...

Divotmaker, those tables are so cool that I wish I needed them for something, just so I'd have an excuse to spend more time with them.

Anonymous said...

To educate the market;

we all should weigh in on the SacBee website which attracts the largest amount of readers and link back to this post.

http://www.sacbee.com/dyn/comments/standard/comments_separate.html?uri=http://www.sacbee.com/content/homes/re_news/story/14288573p-15111983c.html&o=d&ud=u&avatar=n&tie_to=15111983

Anonymous said...

HOw do you like this guy's comment from SacBee? http://www.sacbee.com/dyn/comments/standard/comments_separate.html?uri=http://www.sacbee.com/content/homes/re_news/story/14288573p-15111983c.html&o=d&ud=u&avatar=n&tie_to=15111983



CB4867 at 4:52 PM PST Monday, August 7, 2006 wrote:

Laguna Ridge Recreation

I think that the 1900 acres at Laguna Ridge would be much better suited if it were re-zoned as a recreational area for the people of Elk Grove to enjoy their favorite activities. Street racing, cock fighting, that sort of stuff.

Gwynster said...

Did anyone see this?

http://tinyurl.com/j9zye
Thieves like shiny price of metals
Copper, aluminum the target of brazen burglars in region.

I work in the social sciences (research). I'm used to seeing these type of thefts in the steel belt towns and in places with a very distressed working class; Detroit and Flint, Mich. for example.

from the article:
"Anything that's left unsupervised -- it's a real problem in our county," said Lt. Jeff Monroe of the Yolo County Sheriff's Department. "Whatever they can get their hands on, they can recycle."

"AT&T officials estimate several hundred thousand calls could not be completed to Placerville-area residents May 16 after thieves felled more than 1,000 feet of AT&T cable, seeking copper wire."

"We have seen those instances on the rise," said Vanessa Smith, company spokeswoman."

Agent Bubble said...

Not surprising. My brother in law told me someone stole all the copper from the lines they had in a church they are building in Missouri last month. Our church in Sacramento was victim to someone stealing phone lines (for the copper) two weeks ago too.

Anonymous said...

Shows you how low class the criminals are or how bad the economy is in Sac.

Take a look at the classifieds in the Bee. Do you see the type of jobs that will support these home prices?

Anonymous said...

It is going to be really bad in Elk Grove's newer neighborhoods.

The yuppie wanna bes that purchased the McMansions with adjustable rate, no down, neg ams are probably in the order of 75%.

Well Sports Fans this means that the majority of the homeowners are going to get slammed big time in 2007

And it looks like it will be really ugly unless rates come back down.




Chuck Jaffe at Marketwatch.Com:

"The popularity of adjustable-rate mortgages means that nearly 25% of all outstanding U.S. mortgage debt (recent as well as older loans) is due for an interest-rate reset within the next two years, according to Economy.com, a Web site run by Moody's Corporation.

Some $400 billion in loans will get a new rate this year, and another $2 trillion are set to move in 2007.

"Those moves won't be pretty. Just two years ago, the prime rate stood
around 4%; today, it is more than twice that. As a result, payments on
some ARMs will double too. The current forecasts from a number of experts have defaults on those loans increasing by 10%."

Try 30% in Elk Grove if Helicopter Ben can't get the rates to turn back down.

Anonymous said...

http://www.sacbee.com/dyn/comments/standard/comments_separate.html?uri=http://www.sacbee.com/content/homes/re_news/story/14288573p-15111983c.html&o=d&ud=u&avatar=n&tie_to=15111983

These guys are on to it.