Wednesday, September 06, 2006

Sacramento Sales Decline Breaks Through 50% Barrier

The Sacramento Real Estate Blog reports that sales of existing homes in Sacramento County fell 52.5% in August. Find more MLS stats for August here.

So with record inventory, price depreciation and sales declines reportedly over 50%, some Sacramento real estate agents still want to describe this as a "normal" market. After perusing Realty Times "Market Conditions" for Sacramento, one agent had this to say in Rocklin & Roseville Today:

It is no wonder that so many of the bubble blogs point to Realtors as sugar coating what is going on in the market. This is not a normal market, is not moving slightly in favor of buyers and I don't know many who would describe our market as great. Maybe just saying how many homes sold last month is telling it like it is.

24 comments:

Anonymous said...

I want to know which jobs people had in the first place that allowed them to afford a $500,000 3 bedroom house in Placer County.

A 30 year loan would give them a $3000/month payment if they got in at the lowest interest rates. Throw in tax and insurance, and they are looking at $3800 a month just for housing.

It would take an income of at least $150k to reasonably cover that, maybe more.

Please tell me where these jobs are. I want to find one.

Anonymous said...

Well if you and your husband make 75k a year.

smoggiebakersfield said...

Source: MarketWatch

Realtors warn of falling house prices; Palm shares fall on Treo weakness.

"The market is concerned over when inflation is going to peak and how slow the economic slowdown is going to be," said Jim Awad, chairman of Awad Asset Management. "Yesterday you got bad news on inflation with the rise in unit labor costs and a Beige Book that offered a sluggish view of economic growth. Today, we have housing news that is creating fears the slowdown in that market may be worse than expected."

Is this the begining of the end for the housing market. Job loss is at a six month high! Stocks are dropping like rocks.

http://custom.marketwatch.com/custom/earthlink-net/mw-news-headlines.asp?GUID={2009DBC6-4B76-4441-B238-908B3ADADF10}&destination=&symb=djia

Bakersfield Bubble said...

Lets see - A loss of 50% of commissions and increased advertising expenses. Sounds like the realtor profession is going to be thining the herd. I for one hope transactional volume drops by 90%! Then all this "buy now...", "no more land...", etc.. crap will no longer be repeated!


crispy&cole

arizonadude said...

The sacramento area is way overpriced as most of the valley from bakersfield to redding. Speculators have pushed prices to absurd levels and priced most people out. As greed turns to fear you are going to see one hell of a mess. If you have 1 typical income to buy a house might as well leave the state and buy elsewhere.

norcal ray said...

Wow, 50% drop is a huge drop in sales. This downturn is moving faster than I expected even though I am bearish. Looks like the market is entering the crash stage with big price drops coming soon. A lot of speculators will be taking some hits soon if not already. I had advised a friend's friend to sell last year but they didn't listend. It is going to be hard to get out now with sales down big time.

Anonymous said...

Anyone have insight into how the Davis market is doing? I've been told that Davis has its own special market and what happens in Sacramento doesn't affect Davis. Thanks in advance.

Anonymous said...

Let's see, there were nearly 500,000 California real estate agents last year carving up growth market. Sacramento is now down 50% in August. Bread lines coming for those who depend on selling property for a living? Sellers not quite capitulating on their prices yet as buyers dry up and homes continue to sit on the market for months. Time bomb ticking on those "funny money" interest only, or 1 year ARMs. These people know they're in trouble and they will have to make tough decisions as monthly payments go through the roof. Is there a recession on the horizon or are we in for a "soft landing"? Too much pressure to the downside to allow us to find a bottom any time soon.

Anonymous said...

Yes Davis is different.

Oh btw - so is LV, Phx, NY, the entire state of Fl, So. Cal, No. Cal, Porland, DC, SLC, Bakersfield, Denver, all of North America, South America, Africa, Asia, Austraila, Europe, etc....

Anonymous said...

Davis is no different, although you'd never know that reading the Davis Enterprise, which is minimizing, even ignoring, the extent of the crash in Davis.

I live in Davis. Within three blocks of me five houses went on sale at the beginning of summer. Sales season is over now and not a single one of them sold.

Gwynster said...

copied from my blog:

They said it could never happen here
Another 3/1 SFR house right around the corner from me for sale. Looks like another flipper in trouble and loosing some money while doing it. It's located on a pretty busy street.

708 L street, Davis CA 95616
MLS 60058871
Price Reduced: 06/19/06 -- $468,000 to $450,000
Price Reduced: 07/20/06 -- $450,000 to $425,000
Price Reduced: 07/26/06 -- $425,000 to $415,000
Sale History
09/21/2005: $427,000
09/01/2000: $169,000

I'm seeing more and more of this in Davis. A little research done with the Yolo Co assessors office, zillow, and zip realty will show you more properties like this. I also expect the condo market around Bidwell/Donner to continue tanking as the Wild Horse development opens. Prices there have dropped from $290 asking to $240 with almost nothing selling.

Another thing I am seeing is people taking rentals off the market and trying to sell once they find out no one will pay their inflated prices. We have a high vancancy rate here and I've seen some interesting downward adjustments in prices.

The only people paying top dollar for rentals are undergrads with no credit because it's all they can get. I work for UCD and our HR dept is going nuts trying to stop bleeding employees. The good renters either left the state, bought a long time ago, or have landlords like mine who are offering improvements and lower rents to get us to stay.

Lander said...

Does the Davis Enterprise actually report on the housing market? Not that I've seen. Looks like the newspapers in Chico and Davis are so fixated on the anti-growth debate, that they are oblivious to the housing market saga unfolding.

Davis housing bubble blog, anyone?

Anonymous said...

Yes, Davis is different. Better schools, less congestion, better air quality and certainly nicer weather than Sacramento. :-)

DavisGuy said...

lander,

The Enterprise did run one article about a slowing Davis housing market at the beginning of the summer. Since then not a word, and the situation has deteriorated considerably since that article, at least two months ago.

Did you see the Enterprise featured editorial about a week ago where the writer said that Davis would be spared the declines of other cities because it's so desireable and special? Hello???

I agree Davis deserves a blog. It's a small city but an information hungry city, and the information people want isn't available in the local press.

The troubles in the Davis rental market---higher vacancies and declining rents---are also taboo subjects in the Enterprise.

I'm not the one to set up a Davis blog but I hope that someone does.

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

I'm reminded of an old joke:
Q. Whats's the difference between butt sniffing and ass-kissing?
A. Depth perception

I agree that the Davis Enterprise is not going to do any reporting on the housing or rental market. They firmly have their head up the city council's behind.

We had Measure X last fall which was voted down. I really believe the only reason it didn't pass was because too many property owners were worried about additional inventory reducing up their perceived equity. Woodland's new developments are approaching the Davis city limits fast which makes failure of measure X moot. The homes there are more affordable there as well so Davis's "exclusive" market pretty much only exists area seller's minds.

The big employer here is UCD which is awful about it's employee compensation with the exception of top administrators and faculty. There are not enough of those choice positions to save the Davis Market. Most employees either bought here years and years ago or they commute in from other areas. UCD can't seem to attract new talent to the campus which could become buyers either. In fact, the whole UC system is loosing employees - either for positions at other universities or retiring. So UCD is contributing to the problem, not solving it.

That means the only market for homes here are for people commuting into Sac and they can commute as easily from Woodland as from Davis. The few owners who were commuting to the BA are trying to sell or have already left. Recent graduates aren't remaining either. The employment opportunities in areas with healthier housing markets are too numerous to entice them into staying.

So to summarize, Davis' wonder housing value is pretty much a figment of marketing imagination. Not that I have an opinion on any of this... **winks**

Lander said...

Davisguy-
If you see an article in the DE and you don't see a link to it here, email me the link or place the link in the comments.

Davisguy said...

lander,

The opinion column I mentioned was by Dan Dorf and appeared in the August 30, 2006 Davis Enterprise, at the top of the editorial page. It's title was "Davis may escape housing slide". I wonder if Dan wrote the article a year ago?

Unfotunately you have to pay for the full text of archived articles from Enterprise website. The link I can provide only has the article's first sentence or two for free.

http://davisenterprise.com/articles/2006/09/07/columnists/dick_dorf/123dorf.txt

I'll feed you other interesting bits from Davis as I find them.

Garth Farkley said...

I don't know if Lander gets tired of hearing this. But this is an outstanding blog.

Lander said...

Thank you Davisguy & Garth.

Gwynster said...

I grabbed the Davis Enterprise article off the UCD wire service and posted the whole article for you here:
http://gwynsters.blogspot.com/

Anonymous said...

nobody, but nobody uses the conventional mortgage anymore,

where you been?

Old fashioned....Now Everything if FREE! No money down, Interest Only, and hey maybe you don't pay anything for the first few months...but don't worry, that new squat dumpy stucco box you bought in a squalid slum in El Dorado Hills for $750k is sure to appreciate and cover the funny money loan...

Hardeeharhar..

Anonymous said...

I have seem many home's ask for price in Davis has been cut from $20k to $40k in the past three months.

Mikey said...

This is a good Blog.

I live in Florida and yes I am getting tired of hearing "Everyone else has a Bubble, but not us".

Of course we here in Central Florida Certainly don't because we have a magic troll who leaves a Kugerand under everyone's doormat each morning. That might as well be the stroy here because it is just as believable as the storys that appear in print.

The Real Estate Market, in general, (and there are some regional differances) is a train wreck, happening as we speak. My biggest fear was that it's effect would spill over into the general economy and cause serious recession. If the market tanks, it will nick the economy somewhat as related industries, financing, banking, construction business take hit. It's possible for this to happen with minimal effect on the general economy. Each day, with each new bits of data, the ominous feeling grows. Lets hope for the best.