Tuesday, August 22, 2006

Placer Not So Lonely Anymore

Back in January of this year, Placer County was the only California county listed by DQNews to suffer a year-over-year price decline. Six months later, Placer has plenty of company in the depreciation club, according to the latest DataQuick numbers for July:

  • Placer: -7.07%
  • Marin: -6.61%
  • San Benito: -6.45%
  • Yolo: -6.16%
  • El Dorado: -3.93%
  • Santa Cruz: -3.43%
  • Sacramento: -3.42%
  • Sonoma: -1.82%
  • Monterey: -1.77%
  • San Diego: -1.74%
  • Napa: -1.32%
Data is for resale single family residences and condos as well as new homes.


norcal ray said...

Wow Sac is getting hit hard and the builders keep building. This be a rough market ahead for sure.
Hold on to some cash.

Rob Dawg said...

October, it will be easier to list the counties with y-o-y increases.

Happy Renter said...

The numbers for August are going to be sweet enough.7% declines are already in the numbers and fear is beginning to take hold. Man I'm enjoying this.

JR said...

Norcal Ray, It is interesting how the homebuilders keep building. There is a need for more housing on some level. It is just that buyers are now recognizing the reality (or unreality) of the current price levels.
What is more intersting is that the homebuilders are leading the charge for the price reductions. They have clearly been pulling out obscene profits in the last few years (and frankly, who can blame them, as no one was "forced" to buy a home). The irony is that it will be those very customers from 04-05 that provided the builders with extraordinary profits in the last two years, who will now get burned the worst.
I believe home builders can probably turn out homes for $150/sf and still earn marginal profits. That means your typical 1500 sf home will drop to $225,000 by 2008. That is going to hurt a lot of people, since so many sold for $450,000.

Agent Bubble said...

$150/sf? Even including land, I can see that price. We've built two custom homes for under $125/sf including land (1998 and 2001). We just went through a bid process at $125/sf (not including land) to build another house but we backed off on it. Mind you, these are homes with all the goodies, so given that today's builders use the most basic materials, I think they're making a killing.

Think about it this way. When things started really rolling in 2001/02, the builders already owned their land more than likely. They've benefited by houses doubling/tripling in value because the materials and labor to build a house has not double/tripled in kind. There's a lot more profit in these cookied cutter homes than most people imagine.

crispy&cole said...

Bakersfield - still up. Maybe I am wrong, maybe we are different. BAHAHAHAHAH

Anonymous said...

Should we expect a 5% depriciation every year for the next 2years???? If someone wanted to sell there house where would they start????

JR said...

We walk around the block 4-5 nights a week and keep a running tab of the homes for sale. In the last six months: There are 11 listings on our "route". 10 have had 15% + price reductions (one lady is just stupid and raised her price). Four have expired unsold. Two have pending sales. One is just sitting, two have had further price reductions. Today, one had this: "Bring all offers. The bank would like to see something before they go to auction." This is a great home in beautiful condition with a pool. 2000 sf, $419,000 asking price. A year ago, the average selling price was $265/sf. Today, anything over $200/sf is a non-starter.

Agent Bubble said...

anonymous--I think the amount of decline really depends on quite a few factors. Location and size are two that stand out the most to me as a realtor. Many on here feel (justifiably so IMHO) that homes are extremely overvalued at present. I'm speaking from experience working in Sacramento and I know that there's just not a strong enough job market out there for people to keep buying $500,000 homes and living within their means. I keep seeing client after client that can't afford their house but refinances in the hopes of making a few more payments.

Bottom line: nobody knows where the market will be in a year. But, I have a strong feeling that once December rolls around, there won't be much guessing as to the direction it's headed.

Anonymous said...

Through past historical data we can ascertain that the increase in Trustee sales will be greater than the last two "busts" @ an increase of 981%...most likely we'll be at an increase of 1500% Banks will be giving away nice homes in a few years.

JF said...

Anon, Aug 23, 7:35 AM

You are either overly pessimistic or overly optomistic. Either way, I don't think the banks will give anything away. You may be able to negotiate a good deal, at prices possibly lower than the year 2000 averages, but that will be the lower limit. And with no prospect of price appreciation for 10 years, why would ANYONE want to buy a home and pay TWICE the monthly the cost of renting the same home? It WILL get very interesting.

Gwynster said...
This comment has been removed by a blog administrator.
Gwynster said...

On my blog I listed some census data but here is a highlight that I talk about a lot: California outmigration total was 664,460 between 2000 and 2005. I expect that number to increase from 2006 to 2010.

So what happens if the increase in unoccupied homes continues? The only thing keeping CAs population numbers positive is international immigration and birth rate but young CA families are leaving the state.
We could potentially have a surplus of housing.

What types of deals will the banks make? Will they begin writing them off and giving them to the state? Doubtful but I bet we see a lot of "affordable" deals to cover the mess with a coat of whitewash.

I'm all for affordable housing, I just wonder how all this will get spun.

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

Another sign of the times

Pool customers left hanging by builder
Aquarius' closure sets off state probe


Turmoil in pool firm's wake
Homeowners weigh options amid probe of Aquarius shutdown

The articles talk about some homeowners having liens placed on their property.