Saturday, August 26, 2006

Sacramento Housing Flu Spreads, Hits Bay Area

Even the almighty Bay Area can't escape the contagion. From the San Jose Mercury News:

During this particular cycle, he [Richard Calhoun, owner of Creekside Realty] said, the real estate market has "slowed down from the outside in," starting last summer in Sacramento, moving to the Central Valley, Monterey and Santa Cruz, and hitting the Bay Area's employment centers recently.


Lander said...

Sacramento started the down-market last summer and the Central Valley followed suit. Since then, other areas, including Monterey, Santa Cruz and Santa Clara counties have all swung the same way. All these cities are finding themselves with an over-abundance of houses without buyers...

Typically the market shifts start in Silicon Valley and slowly move outward, but with the latest shift, it started in Sacramento, said Richard Calhoun, a real estate broker with Creekside Realty in San Jose.

"I believe the collapse outward has been due to things like people's perceptions of the gas shortage. It's psychological. People are less likely to purchase homes when they face uncertainty," Calhoun said.

Anonymous said...

"The house in North Sacramento, I'm $305,000 into the bank, and it's worth $280,000. I'm trying to get the bank to agree to $280,000," he said. Webber says he has a buyer at that price. If the bank agrees, it would avoid not only the lost time and legal expense of foreclosure but also the financial risk of resale in a depreciating market.

Known in the real estate trade as a "short sale," this desperate, but practical tactic -- negotiating less than a complete payoff to lenders -- reappears like clockwork when real estate markets sour. Widespread in Texas during the 1980s oil and real estate crash and again in the 1990s as California lost thousands of jobs to military base closings, short sales are back and proliferating, say local specialists who handled them in the 1990s.

Anonymous said...

Why is it spreading west? I thought it would have started in the Bay Area.

The Bay Area investors are one of the reasons that home prices went so high.