This graph compares sales of single-family homes by year (2001 to 2006) as reported by the Sacramento Association of Realtors (SAR). Coverage includes MLS sales in Sacramento County and West Sacramento.
Some December statistics from SAR:
From the Stockton Record:
Dolly Cruz, a Bay Area investor who a year ago bought a single-family home in Lathrop's Mossdale Landing development for $625,000, figures if she had to sell now, she would lose $100,000.It must have been the toolbox and blanket!
The house is rented out at $1,500 per month - not even enough to cover the mortgage payment, she said, but she is still confident in the long-term real estate market and isn't upset about the slowdown.
"Even though the price is down, you're not losing anything if you're not selling it, is the way I look at it," Cruz said.
UPDATE: Sac Real Stat's Agent Bubble takes a closer look at the Journal article here [pdf].
The Sacramento Business Journal looks at sales and inventory by zip code.
Life isn't fair and, apparently, neither is a housing slump. Sacramento's trendy midtown has a scant three-month supply of homes on the market and seems to be weathering the downturn much better than nearby North Sacramento or Del Paso Heights. In those communities there's about a year's supply of homes based on prevailing sales trends.Unfortunately, the article does not have much to say about how home prices have fared. Just how many zip codes are price "winners," those lucky zips that have managed to evade price drops? As mentioned previously on this blog, 90% of Sacramento County zip codes posted year-over-year price declines in December, with almost half experiencing double-digit drops. Was this just a one-month fluke, or is it part of a larger trend? To find out, the last 12 months of DataQuick zip code data were examined to see how many areas suffered price declines (and double-digit price declines) in a given month. This graph is the result.
With help from Sacramento-based Trendgraphix Inc., the Business Journal analyzed sales of existing single-family homes by ZIP code for the entire Sacramento region over the 15 months ending Dec. 31.
In this analysis, an area's sales rate was determined by examining the number of homes on the market -- the inventory -- compared with the number of sales for a particular month. That comparison provides a new figure: the months of inventory within a given ZIP code.
The result is a map scattershot with winners and losers as sales slowdowns and price drops wallop some areas and skirt others.
Read more...
Sacramento was one of three metropolitan areas in the state that together accounted for almost half the decline in single-family housing permits in 2006, according to the California Building Industry Association. (The other two were San Diego and Riverside/San Bernardino.)Also from the Journal:
...
California Energy sells primarily windows but also some siding in an area that stretches from Vacaville to Grass Valley, and from Lodi to Yuba City. Most of its customers are homeowners who are remodeling though the company also does a few jobs for contractors and new construction.
"2006 was a rough year for most everyone I talk to. For every dollar you'd put in advertising in 2005, you'd have to put in three dollars in 2006 to get the same results," he [owner Phil Isaacs] said.
Another hurdle is the climate for mortgage rates. While rates came down through most of the last six months, it didn't translate into a new wave of remodeling projects for California Energy. "The easy money that was out there for remodeling has been tapped out," Isaacs said. "When the whole economy was good, they were tapping into the equity to remodel because interest rates were so low."
That would seem to contradict the industry group's rule of thumb that remodeling goes up when home sales go down, or it could simply mean that segment is played out for now. Dave Coffin, sales manager for window manufacturer Burnett & Sons Mill & Lumber Co., has become a doubter.
"Walk-in traffic seems to be more lookers than buyers, which we had a year ago," he said. "We sensed a change in the climate about six or eight months ago."
Pulte has sold its interest at Placer Vineyards, totaling about 450 acres of owned and optioned land, to Sacramento's Reynen & Bardis Communities. Financial details were not released.
...
The deal closed last month as part of Pulte's strategy of focusing on existing communities and withdrawing from future ones during the housing downturn, a company spokeswoman said. It's one of the largest land transactions in the region during the past year as the market cooled off significantly, several land experts said.
...
This month, Pulte said it would take a $330 million to $350 million charge, included abandoning land options, and possibly post a fourth-quarter loss. Pulte's Sacramento division recently laid off about 20 workers, from construction workers to administrative staff, or about 10 percent of its work force.
From the Sacramento Bee:
James and Beth Fullenwider are living inside a bad dream growing ever more familiar across the Sacramento region: Their 2,400-square-foot house in Elk Grove is slowly slipping away from them. They can't afford their $3,300 monthly payment.From the chart--Percentage of homebuyers in the eight-county capital region who used ARMS, by year:
"If the credit people had really looked at our situation, they would have laughed and said, 'You can't come close to qualifying for this,' " says James Fullenwider, who runs a video production business at home. "We're in a house we have no business being in."
He says the couple didn't read the home loan's fine print. Only after moving into the $500,000 home last August did they learn the loan agent inflated their income to qualify them for the financing. "But we were stupid to do it," Fullenwider says.
The couple's story illustrates one of the biggest questions hanging over the Sacramento region's real estate market this year. As housing prices search for bottom, some financial experts fear that a multitude of expensive and newly adjusting mortgages have the potential to spark a rising tide of foreclosures. That, in turn, could be a hidden time bomb, shoving more homes onto the for-sale market and further stressing a downturn already well into its second year.
...
Nearly $1.3 trillion in adjustable rate mortgages -- ARMs -- will reset to higher payments this year, according to mortgage giant Freddie Mac and other financial institutions. That will cause some payments to rise $200 a month. Others will double or triple.
In markets like Sacramento, already heavy with excess resale inventory, some speculate that stressed owners will hand more homes back to banks and aggravate the oversupply. Since the high inventory of houses for sale already is depressing prices, a run of foreclosures would likely further depress them.
...
In 2004, about 65 percent of homebuyers in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties used adjustables. The next year, the total jumped to 73 percent before falling back to 62.5 percent from January through November 2006, according to DataQuick. That's about 135,000 ARMS in the last three years, with thousands of them adjusting upward in 2007....
Loan Performance, which tracks U.S. mortgage industry loans, estimated that nearly half of 2004 and 2005 homebuyers in the eight-county region used interest-only loans...The firm estimates that in 2005 as home prices peaked, nearly one in five borrowers used even riskier Option ARMS...In the first nine months of 2006, one in four Sacramento-area borrowers were using them, Loan Performance estimated.
Read this first for some background. From the Sacramento Bee:
A second high-rise condominium developer has come hat in hand to the city of Sacramento...[Craig] Nassi's request follows a similar one last year from John Saca...
...
Despite strong sales of units in their planned buildings, both developers sought help after the residential real estate market slumped while prices for construction materials continued to climb.
...
"The demand for the units is there, it's just that construction is really expensive right now," said City Councilman Rob Fong. "If we can be helpful, we need to help these guys make investments in our city."
...
He has since collected non-refundable deposits for 65 percent of the 268 units in Aura. The city of Sacramento has issued permits for excavation, grading, foundation work and utilities, but Nassi has yet to pick them up.
According to the city staff report, he needs to pour the building's foundation by April to meet the delivery schedule for condominiums promised to his customers.
From the Central Valley Business Times:
More than 1.2 million foreclosure filings were reported nationwide last year, up 42 percent from 2005, according to RealtyTrac, an Irvine-based online marketplace for foreclosure properties. It works out to one foreclosure filing for every 92 U.S. households.From the Stockton Record:
...
Stockton in the Central Valley was ranked as the city having the nation’s 11th largest ratio of the number of foreclosures to total housing stock in 2006, according to Realty Trac. Its figures show there were 5,153 homes that went into the foreclosure process in Stockton last year. That works out to one for every 37 homes.
Other Central Valley cities tracked were Sacramento, ranked 32nd in the nation with 10,637 homes in foreclosure last year, or one for every 61 homes. Fresno ranked 39th in the nation with 3,673 homes in foreclosure or one for every 74 homes. Bakersfield was ranked 42nd. It saw 2,964 homes going into foreclosure in 2006, or one for every 78 homes.
"It's true that foreclosures could have a negative impact on the housing market if they continue to increase at this rate. And in some of the more problematic local markets they already may be contributing to slowing home price appreciation and a glut of homes for sale," says Mr. [James] Saccacio, [chief executive officer of RealtyTrac].
Mortgage default notices in San Joaquin County soared to a record high in the last three months of 2006, as statewide filings hit the highest level in eight years, a real estate information service reported.
Lenders notified 1,293 county homeowners they were in default in the fourth quarter, nearly three times the 464 filings seen in the same period of 2005, DataQuick Information Systems said. Statewide default notices rose nearly 21/2 times year-over-year to 37,273 from 27,218.
That was the largest number of default filings for San Joaquin County since DataQuick began tracking the data in 1992, said company analyst Andrew LePage. The previous high of 1,089 defaults was in the fourth quarter of 1997, followed by the first quarter of 1998 with 1,059 filings.
...
"There are always homeowners in financial distress ... even in a good economy, even in a good housing market," he said. "Now it manifests in default and, in some cases, actually in foreclosure, because without appreciation more of these people can't bail themselves out."
...
Aggressive financing schemes, with some lenders offering low initial start-up rates may also be at fault, said Art Godi, principal of Art Godi Realtors in Stockton and former president of the National Association of Realtors.
"We said at the time that some of those wild loans were going to come back and haunt somebody," Godi said Thursday. However, he added, "As long as (home prices are) going up 20 percent a year or whatever they were, that made up for a lot of the problems."
Post off-topic links, observations, and stories here.
Please read the comment policy before posting.
DataQuick's dqnews.com has posted their December city/county numbers for combined sales (resale single family residences and condos as well as new homes). Yolo County continues to lead the state in year-over-year (YoY) price declines. What a difference a year makes. In December 2005, all four counties were clocking double-digit appreciation. Now all four counties are experiencing double-digit or close to double-digit depreciation.
El Dorado County
Sound familiar? From the Business Journal:
The developer of the Aura condominium project in downtown Sacramento is seeking a $9.6 million loan from the city of Sacramento as the last piece of financing needed to build the $175 million, 39-story building.
Craig Nassi, of BCN Development in Denver, originally sought a higher amount in the form of a grant and a loan, but city staff examined the financing and determined approximately $10 million would make the project viable, assistant city manager John Dangberg said.
...
If approved, Nassi would have 90 days to secure $150 million in loans and an additional $18 million in equity needed to build Aura. If the financing isn't in place within that three-month timeframe, the loan offer expires. The Council would need to revisit the issue once the loan terms are negotiated. The deal would also give Aura $360,000 in city sewer credits.
The Aura project was approved months ago by the city, but Nassi has not pulled construction permits as he's struggled to pull the project together. "We should be ready to go within a few weeks after the city council meeting on Tuesday," Nassi said of construction timetable.
...
Nassi said he was unable to secure financing elsewhere. "The construction market is tough right now," he said. "Sacramento is an unproven market because high-rise condominiums haven't been done."
...
According to a report from Hanley Wood Market Intelligence, buyers have put down 15-percent deposits on 196 of the project's 268 units, or about 73 percent of them, through November.
From the Sacramento Bee:
The shake-out is on.Meanwhile, San Joaquin County just broke a record:
Hundreds of Sacramento-area homeowners who missed their first mortgage payments early last year fueled the region's most dramatic rise in home foreclosures since the 1990s during the fourth quarter of 2006, a property research firm said Wednesday.
...
La Jolla-based DataQuick Information Systems said 865 capital-area homeowners surrendered their houses to the bank in October, November and December -- nearly double the region's 450 third-quarter foreclosures.
...
The 865 fourth-quarter foreclosures compare to 63 the same time last year in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Analysts said Wednesday the sharp rise reflects both last year's historic lows and the sheer number of owners who overextended themselves to buy houses during the recent housing boom.
"What's the old saying? 'The chickens are coming home to roost,' " said John Arvanitis, president of Citrus Heights-based Sunrise Vista Mortgage Corp. Arvanitis called the foreclosure numbers "inevitable with the type of financing that most consumers were forced to accept to get into a house before they could no longer afford it."
...
Sacramento County reported 657 foreclosures during the last three months of 2006, the most since 703 during the second quarter of 1997. Placer County's 82 fourth-quarter foreclosures compared to a historic high of 90 in the second quarter of 1996. Both peaks marked the end of a housing bust in the region triggered by recession, job losses and military base closings.
It was even worse in San Joaquin County, where default notices hit a record high. Some 1,293 homeowners received default notices, compared with 464 a year earlier. DataQuick statistics go back to January 1992.So in California, how many of these notices of default (NOD) actually resulted in foreclosure? Not many, until now:
San Joaquin County's increase in foreclosure notices is partly linked to speculators who are finding it difficult to sell homes in today's slowing market, said Renee Becker, a broker and vice president at Stockton-based Beck Realtors Inc.
"The market has turned, so maybe (speculators) have not been able to sell the homes," she said. "They are stuck with them."
...
Loans resetting to higher rates are likely playing a small role in the higher numbers of default notices, but "the main culprit here, by far, is the flattening out of home price appreciation across the state, and even some modest decline in home values in a few markets such as the Sacramento area," DataQuick analyst Andrew LePage said in an e-mail.
...
"When appreciation dries up, and certainly if depreciation sets in, it becomes very difficult if not impossible to refinance or take out a second loan, or convince family or friends to help you out," LePage said. "It takes longer to sell the house and it could be impossible to sell for enough to pay off the lender and cover any fees.
While most homeowners are able to avoid foreclosure by getting current with their payments, refinancing or selling their home to pay off their loan, that is becoming harder as the market has cooled, according to the DataQuick report. About 32 percent of homeowners who got default notices earlier in 2006 ended up losing their homes to foreclosure the fourth quarter compared with 8 percent a year ago.DataQuick's dqnews.com has more information on NODs for individual counties. The following shows the change in the number of notices from the prior year:
It’s official. My bubble market can beat up your bubble market. For the first time, Sacramento tops PMI’s list of riskiest housing markets, knocking San Diego off its bubblicious perch. The U.S. Market Risk Index ranks the likelihood of home price declines in two years for the nation’s 50 largest metropolitan statistical areas (MSAs).
From PMI’s report [pdf]:
Of the 19 highest risk MSAs, eight are located in California, eight are in the Northeast, and two are in Florida. Sacramento, CA has replaced San Diego, CA as the highest risk MSA among the top 50, with a score of 604.A few smaller markets, mostly in California, are considered more risky than Sacramento. See here for a complete list [pdf].
…
Six of the 10 areas with the highest rates of deceleration were in the West, with five in California. Sacramento led the trend with a 17.1 percentage point drop in year-over-year appreciation, followed by Phoenix at 15 percent and Oakland at 13.3 percent.
Sacramento housing at greatest risk for price dropFrom the Central Valley Business Times:
Sacramento-area homeowners beware, the local housing market has a 60.4 percent chance of lower prices during the next two years, the greatest risk nationwide, according to a report released Wednesday.
Sacramento and Placer counties edged out other high-priced markets -- including San Diego County, Oakland and Santa Ana-Irvine-Anaheim -- as the riskiest for a price reduction by winter 2009, according to PMI Mortgage Insurance Co.
…
"Years of rapid appreciation have made homes less affordable in many areas, and that's not sustainable over the long term, so what we are seeing is not unexpected," said Mark Milner, chief risk officer for PMI Mortgage Insurance in Walnut Creek. "Over time, moderating appreciation will bring prices back in line with economic fundamentals, particularly incomes, bringing the market back to a healthy balance."
Continued deceleration in home price appreciation and decreased affordability caused the risk of home price declines to rise in cities across the country, especially in the Central Valley, says a report Wednesday from PMI Mortgage Insurance Co. of Walnut Creek, the U.S. subsidiary of PMI Group Inc. (NYSE: PMI).From the Central Valley Business Times:
Many of the metro areas in the Central Valley are among the most likely in the country to see price declines over the next two years, according to PMI. The Stockton area has a 60.6 percent chance of price declines, one of the most likely in the entire nation.
Standard Pacific Corp. says it will sell six homes in an Elk Grove development by auction next month. It’s believed to be the first time during the current housing slump that a new home builder has resorted to auctioning off its homes. The practice was common during previous housing slides.From the Sacramento Bee:
The home auction spectacle that began last year with impatient sellers aiming to cut their losses has expanded to home builders: The region's first auction of new houses is scheduled for Feb. 3 in Elk Grove.From the Stockton Record:
Analysts say it marks the reappearance in California of a tactic employed by builders during the state's 1990s housing bust. It also signals the real estate market's continuing slowdown as it readjusts from a five-year housing boom that ended 1 1/2 years ago.
"This is a fast, efficient way for us to close out and complete the project," said Jackie Shipley, the firm's vice president of sales and marketing. "We feel like we've had a lot of success in that community. ... It's important for us to do this and move on."
…
Minimum bids will range from $430,000 to $530,000 for the four- and five-bedroom houses in a new neighborhood near Elk Grove's Franklin High School. That means bidders, expected to be a mix of would-be homeowners and investors, must meet at least the builder's minimum price to get the house.
The builder's minimums are well below market highs reached during construction of the subdivision. Early last year resale versions of the smallest $430,000 price tag sold for up to $546,000 on the next street, according to home information service Zillow.com.
Homes for sale now for rent
Owners forced to find cash flow by alternate means
The number of existing homes on the market has been plunging since summertime because of slow sales, and property managers now report a surge in the number of homes hitting the rental market. Jerry Abbott, president and co-owner of Coldwell Banker Grupe in Stockton, said many sales-market dropouts are investors who couldn't sell and now need some cash flow for mortgage payments.
Norbert Huston, a Stockton real estate broker who manages rentals, said business has skyrocketed since summer. He gets three calls per day from homeowners wanting him to rent out their properties, up from maybe three calls per week a year ago. Diane Starr, owner of Starr Property Management in Stockton, said the rental housing market is tough now, with more houses for rent than there are potential renters.
With the recent news that construction on John Saca's condo towers has been halted "indefinitely," it's time for a check up on that other white elephant of Sacramento's housing bubble: Craig Nassi's Aura condo tower. Here's the most recent pronouncement by Nassi, captured in the December 16, 2006 edition of the Sacramento Bee:
Denver developer Craig Nassi insists he is on track to start construction soon on Aura, a 38-story condominium at Sixth and Capitol..."We have a very loyal group of people who have bought in our building and they're ecstatic to move in," Nassi said of Aura, about 70 percent of whose units have been presold.Just how loyal? Let's take a time machine back to April 2006, a time of downtown condo euphoria. An April 5, 2006 Sacramento Business Journal article sets the stage:
He's spending $250,000 on a gala sales event this weekend. Guests will sip Dom Perignon, dine on pricey Russian caviar and oysters and listen to a San Francisco Symphony string quartet while touring a furnished model that includes such standard features as floor-to-ceiling windows, Bulthaup cabinets, oak laminate floors, Miele appliances and subzero freezers that, Nassi says, "cost more than most people's cars."On April 8th, the Bee reported this prediction:
By the end of the weekend, he says he expects to collect nonrefundable deposits - 15 percent of the sales price - for all 265 units in his Aura Condominiums project. Units will range from the mid-$400,000s to more than $1.5 million for penthouse and larger condos.
"It will be like a game of musical chairs," he says. In other words, some folks may be left standing without a condo when the symphony strikes its last chord.
Sure, developer Craig Nassi knows how to party, but the question remains: Can he sell out Aura, the high-end condominium tower he has planned for downtown Sacramento? Nassi's answer during Aura's grand-opening bash on Friday: "We'll be 100 percent sold by 6 p.m. on Sunday."On April 11th, the Bee reported the results of the extravaganza:
Buyers eager for downtown high-rise living snapped up "over 75 percent" of the units in the yet-to-be built Aura condominium tower, during a three-day sales event that ended Sunday, according to developer Craig Nassi. "Sacramento has spoken loud and clear," Nassi said by cell phone. " 'Build it.' "The next day, a Bee editorial trumpeted "Downtown passes a housing test."
His Denver-based company, BCN Development, had not yet made a final tally of signed contracts, but buyers had put down nonrefundable deposits on at least three-quarters of the 265 condos in the 38-story tower planned for Sixth Street and Capitol Mall, Nassi said.
...
Although Nassi has not yet identified who will finance Aura, construction is supposed to start in two months and finish in mid-2008.
A noteworthy test happened the other day with an upscale 265-unit downtown condominium project known as Aura...More than three-quarters of the units, Aura's backer told The Bee's Jon Ortiz, got gobbled up...It seems the aura of our sleepy downtown is quickly fading.But what about those remaining unsold condos? Why didn't 100% sell over the weekend?
"We still have about 20 percent of the units to sell," Nassi said. "We just didn't have enough time to write all the contracts..." He expects buyers to ink contracts for the remaining units at BCN's on-site office this week.Sound familiar? Perhaps Nassi learned this creative trick from the marketing gurus responsible for Centex's "12-hour" sale:
"Our 12-hour savings event was a huge success," D'Arcangelo said. "Because the response was so great, and we were unable to spend quality time with everyone in the 12-hour period, we are extending the special incentives through Sunday.The week passes without a media report of a sell out. But on May 24th, the Bee's Bob Shallit had this tidbit:
What's the latest on the Sacramento project? Nassi says he's collected non-refundable deposits on about 80 percent of his 265 units.However by June, Nassi provided a more ambiguous response in a June 2nd Bee story:
Nassi said Thursday that he has taken non-refundable deposits on "the majority" of Aura's 265 units, selling for between $386,000 to $1.24 million. In April he told The Bee that three-quarters of the units were sold during a three-day grand opening. "We still have units left and we're selling every day," Nassi said. "We're not holding back anything."Although construction was supposed to begin in June, the month ends with no reports of construction. Then in October, the Journal had this report:
Developer Craig Nassi says construction of his closely watched high-rise condominium project in downtown Sacramento will start by the end of the year, despite a fast-sliding housing market that has caused a national homebuilder to cancel two competing projects...The Denver-based company has collected deposits for 70 percent of the 268 condos.Wait a minute. Nassi said that he's "selling everyday" and yet deposits have declined from "about 80%" to 70 percent? Even more remarkable is this statement that appeared in the October 19th Bee:
Craig Nassi, the Denver-based developer building competing condominiums nearby, has presold 73 percent of his 268 units. Sherryl Fleeman, the sales representative for Nassi's Aura project at Capitol Mall and Sixth Street, said that "sales have been consistent with no noticeable slowing" since the project's splashy April kickoff...Officials with Nassi's company, BCN Development, would not confirm the monthly sales trend numbers.Sales have been consistent with no noticeable slowing since April? Isn't 73% less than "over 75%" or "about 80%"? If sales have been consistent, then it appears that cancellations have been even more consistent, with "no noticeable slowing." It seems that some of Nassi's buyers aren't "very loyal" or very "ecstatic to move in."
(a.) Nassi and company are engaging in puffery (to put it politely)Whatever the explanation is, we're still waiting for that 100%. Isn't nine months long enough "to write all the contracts?"
(b.) Sloppy media reporting:(c.) All of the above
- Inconsistent use of terminology (presold, nonrefundable deposit, etc.)
- Newspapers misquoted Nassi and company
- Reporters failed to read their own past articles and challenge inconsistent statements
(d.) Other
We already know that affordability in the Central Valley is extremely low as compared with other places in the country. But how do Central Valley cities fare internationally? The 2007 Demographia International Housing Affordability study [pdf] compared median house prices to median household incomes in the major housing markets of the United States, Britain, Canada, Australia, Ireland, and New Zealand. Once again, the Central Valley is well represented in the top 25 least affordable housing markets. According to the report, a median multiple of 5.1 or over is considered severely unaffordable.
(ranking, city, median multiple)
From the Redding Record Searchlight:
Palomar Builders' withdrawal plunges Redding to permit low
It's never happened before -- at least in this magnitude, says Redding permit supervisor Wayne Gungl.
Palomar Builders Inc. received a refund on about 30 single-family home permits it took out last January. The builder, a subsidiary of Premier Homes in Roseville, asked for the refund before the 12-month clock on the permits had timed out.
...
Palomar got its money back because it has decided not build the homes at this time, Gungl said. It's another sign of a slow housing market. The 30 homes made up nearly half of the 66 permits Palomar pulled in January 2006.
...
2006 was already a lean year for single-family home permits in Redding. The city issued 287 -- make that 257. That's the lowest total since the city started keeping electronic records in 1990.
Some more DataFun for December 2006:
New Homes
The Sacramento Bee did something new this month by publishing a chart which separates DataQuick figures into existing detached homes, existing condos, and news homes categories. Last month, the SF Chronicle reported that November new home prices in Sacramento County had plummeted 14.6% in one year. For December, the median price for new homes plunged 16.1% in a single year. The drops were even more jarring in Yolo and Placer Counties, where medians dropped 20.1% and 24.4%, respectively. El Dorado County declined 4.3%.
Meanwhile, in sharp contrast to the Gregory Group report, the DataQuick chart shows that new home sales posted double-digit declines in December from year-ago levels:
According to Michael Lyon the president of Trendgraphix, the statistics arm of Lyon Real Estate, "2006 was a great year for buyers and, at the same time, a reality-check for sellers. Overall, prices dropped a minimum of 10% last year and days on the market for homes that have sold now averages above 70 days," As part of the latest Trendgraphix press release he went on to say, "Sellers on average have to discount 4% below the last sold to make a sale."If the price per square foot figure is consistent with the TrendGraphix data found at golyon.com, then price, by this measurement, has declined 9.3% since December 2005 and 11.8% since the September 2005 price peak.
Trendgraphix reported sales volume was down 2 percent in December for Sacramento, Placer and El Dorado counties and 25 percent lower than December 2005. In addition the number of pending sales decreased 6 percent in December compared to November.
...
In Sacramento County December sales decreased 4 percent from November and inventory decreased by 13 percent. Pending sales decreased by 4 percent from 942 pending sales in November to 907 pending sales in December. The average price paid per square foot in Sacramento decreased by 1 percent during the month of December to $224.
Post off-topic links, observations, and stories here.
Please read the comment policy before posting.
From the Sacramento Bee:
Sacramento-area renters ruled the region's apartment complexes during 2006, seeing rents rise by only 2.3 percent compared with much larger hikes across the rest of California, a new [Novato-based RealFacts] survey shows.
...
The survey showed an average rent in the four counties of $948 in larger apartment communities during the fourth quarter of 2006. That was unchanged from summer. Capital-area rents have increased just 9 percent over the past four years.
The flat trend in Sacramento contradicts 2006 predictions by many in the apartment industry that supply and demand would cause rents to jump as the year proceeded.
Instead, analysts say rents have been held down by continuing oversupply of rental units after years of new apartment construction. Add to it the growing number of single-family homes now available to rent.
"A lot of people can't sell their homes, and they put them on the (rental) market," said Bruce Mills, owner of Sacramento-based M&M Properties, a rental manager. Some area condominium conversion projects also reverted to rentals in 2006 as condo sales slowed.
The bottom line for big apartment communities and smaller mom and pop-owned rentals: fierce competition and high vacancy rates. "There is a lot of inventory out there and a lot of choices for renters," said Cory Koehler, deputy director of the Rental Housing Association of the Sacramento Valley, a landlord group.
From The Union:
Other Voices: Real estate market downturn the media's fault
Many people in Nevada County have something in common with millions of other Americans across the land. Their financial well-being has been shattered by a careless media. And the results are a housing market in a tailspin, bankruptcies, foreclosures and ruined credit, just to name a few of the consequences.
It's time we understand how this happened: It's not because interest rates climbed a little, nor does it have a lot to do with bad lending policies, which allowed many new buyers to start their mortgage out at just 1 percent, only to have the rate increase a year later. Yes, those things contributed to the downfall, as well as the fact that the real estate market has had a nice run for about ten years.
In those 10 years, home equities increased by obscene amounts. It was certainly time for the market to slow down a bit and let prospective buyers catch up. As we approached 2006, a lot of pundits expected a slight slow down, giving us a "normal market," where neither the buyer nor seller has the advantage.
But that's not what happened. Perhaps the most powerful force in America - the media - became involved in the housing market, and the results weren't pretty. They wanted to talk "crash" and that's what they got.
The media crossed over the line. Their job is to report the news, not make news. They simply scared prospective buyers out of the market, ensuring good stories for the evening news and morning newspapers.
...
When buyers are scared and confused, they don't buy. It's as simple as that.
...
I have a degree in journalism and have been selling real estate for 28 years. I truly believe in a free press and their right to cover stories, including happenings in the real estate market. But they shouldn't be crying "fire in a crowded theater." If you or I did that we would go to jail.
The truth has been missing. The truth has little to do with "a crash" and a lot to do with low interest rates, a robust economy and a growing population. If left alone, the real estate market will do just fine.
Dave Glubetich is a Realtor with Network Real Estate.
'06 housing stats tell a scary taleIn other words, 2007 began with 28% more homes on the market than 2006.
Dwindling sales and ever-plunging prices mark boom's end.
The couple fell in love with the 2,400-square-foot Arden Hills home and watched the price tumble from $745,000 to $699,000 -- then to $624,000. The Aizenbergs offered $575,000. Then came a $600,000 counteroffer. "We said $585,000 and they said 'Yes,'" says Aizenberg, a Wachovia Securities vice president who moved into the house in mid-December.
Perhaps no story better captures Sacramento-area real estate during 2006, a year when a small number of buyers wielded immense power amid greater supply than demand.
...
A turbulent 12 months that brought a definitive end to the housing boom also closed with lower prices. Median sales prices -- the point where half cost more and half cost less -- were down 16.9 percent in Placer County from December 2005. Yolo County reported prices down 14.1 percent. Sacramento County prices were down 7 percent.
DataQuick attributed much of the year-over-year declines -- the steepest among California's urban counties -- to huge discounts offered by new home builders eager to clear inventory before year's end. Price cuts from $30,000 to $100,000 were not uncommon as 2006 ended.
...
The number of homes for sale in El Dorado, Placer, Sacramento and Yolo counties also continued a five-month fall to 10,931 by month's end, according to Sacramento researcher TrendGraphix. That's 4,500 fewer houses for sale than last July. In 2005, the year ended with 8,538 homes on the market.
From the Sacramento Bee:
December sales of new and existing homes and condominiums fell to a nine-year low last month in Sacramento and Placer counties, while overall 2006 sales proved the lowest since 1998, according to La Jolla-based DataQuick Information Systems.
DataQuick reported 2006 sales of 42,300 new and existing homes and condominiums in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties - 23,300 fewer sales than 2005.
It was the lowest number of closed escrows for a year since 47,338 in 1998. The high was 70,179 at the peak of the region's housing boom in 2004.
The Stockton Record reports on TrendGraphix data for December:
The sales price was down nearly 6 percent from $425,000 in December 2005 in a year long slow market...Sales continued to slow, from 416 in November to 406 last month. That compares with 636 in December 2005, when the housing market began slowing after several years of soaring prices.Median Price Change year-to-year (per chart):
...
Sales activity has been picking up a little recently, but the market still feels pretty dead, said Bob Riggs, president of Riggs & Associates, GMAC Real Estate, Stockton.
"We've seen the phone ringing a little bit more, had a few more showings in the last few weeks, but it's still slow," he said. "I don't really see much pickup until, one, it quits freezing outside, and two, the flowers start to bloom. That's pretty typical."
And the best regional real estate blog award goes to...the Vancouver Housing Market blog. Congratulations! Richly deserved.
Oh, and this upstart, amateur blog about a little "cow town" was the runner-up. Thank you readers!
According to data from the Bubble Markets Inventory Tracking blog, Sacramento's housing inventory is once more on the rise.
01/01: 11,622Housing Tracker (here and here) also is showing increases over the past week. Keep in mind that 2007 commenced with significantly more homes on the market than 2006. Will the trend continue and follow in 2006's record-breaking path? Or will DataQuick's John Karevoll's prediction that inventory "will go down by spring, significantly" come true? Stay tuned...
01/10: 12,040
01/14: 12,150
From the Manteca Bulletin:
Typical resale home fetches $412K in ‘06. The median selling price of a previously owned home in Manteca was $412,000 in 2006 — some $28,000 less than in 2005.Let's review:
And almost three weeks into 2007 there are mixed signals in the Manteca housing market with new home demand starting to pick up and sales of previously owned homes still struggling.
...
The price adjustment is less severe than in the early 1990’s when the recession triggered by the Loma Prieta Earthquake in 1989 coupled with the subsequent slashing of military and aerospace jobs due to federal spending decisions resulted in a 10 percent drop in values.
The drop this time around is just over 6 percent.
Post off-topic links, observations, and stories here. Please read the comment policy before posting.
From the Sacramento Bee:
Towers project on holdUpdate: "A gaping hole instead of two towering towers." --CBS 13 video clip here.
Construction stops as developer Saca seeks more cash to pay bills.
Construction has stopped on downtown Sacramento's most ambitious development project ever -- two 53-story condominium and hotel towers planned for the foot of Capitol Mall.
In a sign of developer John Saca's ongoing financial struggle to build his skyscrapers, several contractors filed liens against him in the past week for unpaid bills totaling $7.3 million for such items as architectural work and pile driving.
Hit with millions of dollars in cost overruns, Saca is seeking additional financing. Without it, he likely won't be able to close on his $375 million construction loan from Deutsche Bank.
Eric Rasmusson, a spokesman for Saca, called the work stoppage "a short temporary regroup" while the developer tries to reconstruct a workable budget and secure his construction financing.
...
City officials, concerned that a marquee project may falter, are "doing everything we can to support John in his discussions with CalPERS," said John Dangberg, the city's assistant city manager for economic development.
"We believe they've made a commitment to the project, and we want them to follow through with their commitment and their investment on that site," Dangberg said. "This is a very important project to the city of Sacramento, particularly since a building has been torn down and there are piles in the ground. We want it to proceed, and we think it will proceed. We're not interested in having a hole at the gateway to the Capitol Mall."
...
While his sales have slowed in recent months with the slump in the residential market, Saca is very close to meeting the Deutsche Bank requirement that he presell 400 units. According to Hanley Wood Market Intelligence, a Costa Mesa-based housing analyst, he had collected non-refundable deposits on 383 units as of November.
From the Sacramento Bee:
After weathering one of their toughest periods in a decade, Sacramento-area home builders closed 2006 with a bang, boosting year-over-year quarterly sales of new homes for the first time since 2004 with steep price cuts and giveaways that often totaled as much as $150,000 per house.(In April 2006, Mr. Paquin predicted that sales in 2006 would be "even with or slightly less than the 14,094 homes sold last year.")
The aggressive sales tactics, designed to clear excess stock off builders' books by Dec. 31, drove fourth-quarter sales 58 percent higher than the same time in 2005 and 25 percent above the third quarter of 2006, according to a report released today by the Gregory Group, a Folsom-based real estate consulting firm.
Lower median prices -- ranging from $353,689 in Natomas to $498,365 in Elk Grove to $524,001 in Roseville -- helped drive the 2,445 reported sales across the region, with prices dipping 4.7 percent below the same time last year. Only El Dorado Hills -- $863,684 -- and Rocklin -- $609,820 -- reported higher median sales prices than last year.
...
Placer County showed the quarter's biggest year-over-year sales gains as builders cut prices and offered huge incentives at large master-planned communities in Lincoln, Roseville and Rocklin. In Roseville, for example, fourth-quarter sales prices fell 11.3 percent from the same time in 2005 -- but the number of sales jumped 654.1 percent, from 37 to 279, according to the Gregory Group. Similarly, 11.3 percent sales price declines in Yolo County sparked a 245 percent gain in year-over-year sales.
...
It also marked an end to the rising inventory of unsold new homes that have swamped the market since 2005. According to the Gregory Group, 3,925 homes were for sale at the end of 2006, compared with 4,598 the previous quarter.
...
But even as builders celebrate a strong finish, 2006 still saw the fewest new home sales since 1998 in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. Builders sold 9,588 single-family homes and condominiums during the year -- 4,500 fewer than in 2005.
...
"Maybe this is the bottom," Paquin said.
Whether he's right is still the key issue looming over a market that saw home prices double in five years. Paquin cautioned that one good quarter does not make a trend, and analysts nationally have differed over whether the downturn is ending. Recent reports of sales declines by several national builders prompted analysts to say the new home market may remain challenging "for the foreseeable future."UPDATE: Chart Here
Suzie Rivera's dream of home ownership may soon be within reach. The 53-year-old housekeeper for a local hospital lives in a rental home -- a neat, two-bedroom dwelling on 39th Street in Oak Park. Her daughter, Margarita, age 9, lives with her.Update: The Sacramento Business Journal also reports on new home sales:
"I'd like to buy a house, not so much for myself as for my daughter," Rivera said last week. "Home prices are climbing so fast that by the time she's an adult, she won't be able to buy one."
But as sales perked up for new homes, prices generally fell. Paquin said that suggests builders are cutting deals...Incentives such as upgrades to appliances or floor coverings, which don't show up in a home's price, are making the true cost of a home even lower.
It's a rare situation when homebuilders can take heart in climbing sales and buyers in falling prices, Paquin said. "Look at Yolo County," Paquin said, where the average price plummeted by about $65,000. "The interesting thing is how rapidly it's going down. Buyers may be saying that, whether it's hit bottom or not, the prices are good enough for them."
Realtor data as published in the Tracy Press:
The Central Valley Association of Realtors reported 1,788 existing houses sold in Banta, Tracy and Mountain House by late December. It’s about half as many as in 2005, and the median price of a home dropped from $580,000 in the second half of 2005 to $530,000 in the second half of 2006 [-8.6%].Realtor response:
In Ripon, prices have dropped about $100,000 from the same time last year, from $546,000 to $450,000 [-17.6%], though that city also sees only 10 to 20 home sales a month, compared to more than 100 per month in Tracy.
Marge Imfeld of Re/Max Executive in Ripon and a board member with the Central Valley Association of Realtors said she sees this as a much-needed correction in the market and expressed relief that prices have leveled off.Non-Realtor definitions:
“If you look at the previous three years, 30 to 40 percent increases in property values in a year is excessive,” she said. “I truly believe I’m starting to see a stability in property values.”
From the Stockton Record:
Paul Blumberg, a redevelopment manager for the city of Stockton, said developing residential downtown is now a top item in the city's agenda.The Record also has an update on the Manteca sewer story:
...
There already are plans for the Grupe Co. to build 156 condominiums and town houses on the south bank of the Stockton Deep Water Channel. "I think that's such a coup to have Grupe downtown, and I think it will draw other developers," [Peggy] Massey [director of economic development for the Downtown Stockton Alliance] said.
She points to a good start for the Sheraton Hotel project, with its condos on the top floors. Jeroen Gerrese, vice president of the Sheraton Stockton at Regent Pointe, said that since marketing began in October, there have been purchase deposits put down on 28 out of the 42 condos that will occupy the top three floors of the seven-story hotel.
Prices range from about $250,000 for a 663-square-foot, one-bedroom condo to $1.2 million for a 2,275-square-foot, three-bedroom condo.
...
He [developer Dan Cort] believes many people would like to live in downtown Stockton as an affordable alternative to pricey housing elsewhere in town if the city can create a truly comprehensive safe environment in which to live, work and play.
"The people who will live down there will create safety," he said. That safe environment would have to start with getting rid of the "criminal element" - mostly parolees - attracted to the area from throughout the region because of cheap "single room occupancy" hotels available to them, he said.
City leaders are reacting to the slumping housing market by making significant changes to Manteca's growth policies in hopes of maintaining home building and retaining thousands of construction jobs.
Manteca's move might be a signal that the continuing downturn in the housing market could have a substantial impact on communities that depend on that growth. It remains to be seen whether other cities will follow suit with their own policy changes or incentives for builders.
On the surface, the changes appear mundane: Developers will have an extra year to choose when to build homes after reserving units of city sewer capacity. And the city next year might allocate more sewer units than its current growth ordinance allows, aiming to stimulate building during an expected slow period for construction.
...
The idea, city officials said, is to give builders some breathing room, perhaps letting them hold off on construction until the market improves. Supporters of the change said that, had the city chosen to let sewer reservations expire, construction workers and other employees in the development community would be out of jobs.
...
City Councilman John Harris said the city's decision is a chance to give both Manteca and its developers more options in an uncertain market. "It's just a one-year Band-Aid, as I see it," he said.
Housing Bust Consequence #2,549:
Jeff Hadden hates to say he told you so, but he's going to do it anyway. The owner of NPC Firewood, a Sacramento firewood seller since 1971, Hadden recalls customers trading their traditional wood burning stoves for pellet stoves a little more than a decade ago. Lured by the ease of fitting pellets -- compacted balls of sawdust -- into a stove rather than more cumbersome firewood, Hadden said consumers started moving to the new technology in droves. "I've been telling them for 14 years that they would be sorry," Hadden said.More at sacbee.com...
And sorry many people are, since a recent shortage in pellets, caused by a slowdown in home construction, has left many in the region shivering as temperatures dip below normal.
...
Craig Franklin, the general manager of Emigh Ace Hardware on El Camino Avenue, said he feels sorry for anyone relying solely on pellets to stay warm this winter. "We sold everything we can get our hands on," Franklin said. "I don't see an end (to the shortage) as long as the weather stays cold."
Franklin said he's heard that a slump in new home construction has kept his suppliers from keeping pace with demand. "Since the residential housing market has gone in the tank and they're not building enough stuff, there's not enough raw material," Franklin said.
The Sacramento Bee's Bob Shallit takes a look at the Sacramento Area Flippers in Trouble blog:
Web site needles our realty bubbleCongrats on the coverage Max!
If you doubt there's a frosty trend in the local real estate market, look no further than a five-month-old local Web site. At Sacramento Area Flippers in Trouble (flippersintrouble. blogspot.com), more than 470 Sacramento area homes are listed for sale at prices below -- sometimes way below -- what their owners originally paid.
...
One example: A Folsom home purchased a year ago for $518,500 that's now on the market for $360,000. Another: A Sacramento home purchased for $371,500 in fall 2005 now offered for sale at $249,000
...
Similar sites have popped up in other cities. The local site was launched last July "to counter the positive spin (from Realtors and others) about how great real estate is in tems of appreciation," says its founder, a state worker who identifies himself only as "Max." He claims "Flippers in Trouble" has had 71,000 hits in its first five months in operation.
Why won't he reveal his last name? "A lot of people (in the industry) aren't very happy about what I'm doing," he says.
Several local real estate experts say the site's information is an accurate reflection of how far the market has declined in certain areas. "It's a very real situation," says Mike Toste, a Coldwell Banker real estate agent in Antelope. "I'm seeing sellers take those kinds of losses."
From the Appeal-Democrat:
Home construction in Yuba-Sutter was down but not out last year. The building fever of a few years ago has turned into a chill as the number of building permits pulled in 2006 dropped sharply. But the rest of the Sacramento market is suffering a slowdown too. "It's definitely dropped," said Aaron Busch, Community Development director for Yuba City. "But you see reports that everyone else is experiencing the same slump." Yuba-Sutter's lower home prices were not enough to keep the market booming - especially as deals sprang up closer to Sacramento.
...
Building departments in both areas issued fewer building permits in 2006 from the previous year. Yuba City was down 71 percent. Yuba County, not including Wheatland, dropped 42 percent.
...
The area's homes have to be priced right in order to make it worth the commute to jobs in Sacramento. "As Sacramento drops, Yuba City has to drop too," said [Darin] Gale, [legislative advocate for the North State Building Industry Association].
Post off-topic links, observations, and stories here. Please read the comment policy before posting.
From the Sacramento Business Journal:
Sacramento has one of the nation's top 10 multi-family rental housing markets, according to a Grubb & Ellis Co. report released Tuesday. The company's Investment Opportunity Monitor listed population growth, a high percentage of likely renters according to age, strong job creation and expensive housing as factors that will benefit the residential rental market in the coming year. Landlords can expect a slight increase in rental rates, the report said, and the vacancy rate should remain steady due to new construction.From Bloomberg:
Rents in the fourth quarter fell from third-quarter levels in six metropolitan areas: Sacramento, California; Charleston, South Carolina; Indianapolis; Birmingham, Alabama; Dayton, Ohio; and Omaha, Nebraska [according to a report by Reis Inc., a New York-based research firm.]Also, the local NPR station interviews Bee housing reporter Jim Wasserman, among others.
From the Sacramento Bee:
[A] chorus of industry officials believes the bottom is near. That's what to watch for in this new year. Will Sacramento lead the nation out of its residential real estate doldrums? What will prod buyers off the fence? And what will it take to sell your house?From the North County Times:
...
In the Sacramento region, where the market saw housing starts "nosedive" from annual highs of 18,000 from 2002-2004 to just 10,000 new houses during 2006, [California Building Industry Association chief economist Alan] Nevin predicts a modest 2007 recovery. He sees 10,000 to 12,000 starts.
...
Thursday, Nevin acknowledged he didn't see the depth of 2006's downturn when offering predictions a year ago that in hindsight proved overly sunny. New CBIA Chair Wes Kuesder, a Los Angeles-area builder, said the entire industry guessed wrong about 2006. "What's unusual about this slowdown is the rapid downswing," he said. "It was different than the others, different than the last 30 years. That was a surprise." "It was like a memo went out" to buyers to just quit, said CBIA President Robert Rivinius.
...
Watch for a new round of construction management layoffs as 2007 begins, said Angel Ahumada, CEO of a Roseville-based executive search firm, Integrity Recruiting. Hiring will remain slow for building superintendents and customer service jobs as builders trim excess inventory and start fewer houses, he said..."If you look at the markets, San Diego and Sacramento were probably the worst hit. That's what we've seen from a hiring perspective," Ahumada said.
Independent economists suggest that Nevin's forecast is on the rosy side, and that fewer homes will be built. If the forecast is wrong, it won't be the first time. Nevin said last year's prediction was off by about 15,000 single-family homes statewide.
"I think it's just going to be a weak year all around for single-family construction in 2007," said Christopher Thornberg, formerly an economist with the prestigious UCLA Anderson Forecast and now a partner in a Los Angeles economic consulting firm. "It's not going to be until 2008 that we work through this inventory of single-family homes. I think we have massively overbuilt single-family homes, particularly in places like Riverside, San Bernardino, San Diego and Sacramento."
...
"In 2007, we foresee a situation where construction jobs will decline by 10 to 15 percent as the residential market trends downwards," Nevin wrote in the association's 2007 Housing Forecast, which was released Thursday.
...
Around late summer, construction ground to a halt all over California, said Wes Keusder, a Costa Mesa-based home builder and chairman of the state building industry association. "It was more like a stock market slump than a housing slump," Keusder said. "That's what gave us the inventory that we are burning off now. Normally, you don't just all of the sudden have people stop buying houses on a weekend, but that's pretty much what happened."
On Seeking Alpha, Tim Iacono looks back on his 2006 predictions:
In what was the first of what will surely be an annual tradition, 364 days ago predictions were offered up here at this blog. Appropriately titled, Predictions for 2006, it contained a host of prognostications for the year just ended. Let's see if they were any good.Tim's 2007 housing predictions:1. The Housing Bubble Will Not PopHit the nail on the head about the willing lenders and dumb buyers. As for price declines - see Sacramento and Sarasota for double-digit declines while nationally, prices are about flat (though it depends on which measure you look at). The housing bubble certainly did not pop in 2006, however it is that you define the word "pop" (unless of course you live in Sacramento or Sarasota).
Despite everything that bubble blog readers, writers, and commenters may feel in their loins, there are just too many willing lenders and too many dumb buyers out there. While 2006 homebuyers may hear something about a "housing bubble", it won't register until 2007, at which time, it might register in a very big way.
...
Sure, the speculators are going to squeal a little, and in some of the hottest areas, don't be surprised if by the end of 2006 you see year-over-year declines of maybe 10 percent or more, but nationally, prices should be about flat to up a little for the year.
1. The Housing Bubble Will PopSpeaking of "headwinds," Bakersfield Bubble has been doing a great job covering the subprime lender implosion. (See also: The Mortgage Lender Implode-O-Meter)
When the word "pop" is used here it refers to a 10 percent decline in the year-over-year national OFHEO resale price data - not refinancings, just resales. Others may define the word "pop" differently, but that's how it will be defined here. All the other measures are so squishy that you really don't know what your getting - misleading medians, incentives for new and existing home purchases, and many other factors make it difficult to really assess what has happened using NAR or Commerce Department data.
The popping will not result from the lack of dumb buyers, but rather a dearth of willing lenders. At some point in time, making sub-prime, option-ARM, interest only, 50-year loans no longer makes business sense, and that time will be 2007. There are far too many headwinds going into the mother of all ARM-resets in the months ahead. Ditech.com will not be able to save everyone.
In some areas there will be hell to pay in 2007 - after rising 200 percent or more since the late 1990s you wouldn't think that a price decline of 20 or 30 percent would hurt, but it will.
The Sac Rag's RunnerGirl ventures into the Death Star and lives to tell about it:
...[W]hen at the Sacramento Association of Realtors’ building this morning, I came across a large store on the building’s first floor that sells a multitude of signs, flags, banners, clothing, accessories, maps, and everything one could possibly need to sell a home (other than a firm grip on the reality of our cooling housing market.) While waiting to drop off my stuff with the lady at the desk, I experienced full sensory overload with signs screaming out to me from every wall declaring, "Ready for Quick Sale!," "POOL," "SALE PENDING," "OPEN HOUSE 1-4," and other concise taglines intended to lure prospective buyers.Continue reading...
The one sign that was missing, however, was one that read, "I will not be completely honest with you, so much that it ticks you off enough to file an ethics complaint, which is why you’re in this building in the first place."
From the Lodi News-Sentinel:
Realtors in Lodi are maintaining a positive outlook, with the expectation that a large menu of loan choices, decreased home prices and a low mortgage rate will encourage buyers to invest in a home. But the real key to doing well in the slowing market is for sellers to adjust home prices accordingly, said Larry Underhill, the incoming president of the Lodi Association of Realtors. Underhill compared the housing market to a balloon that has slowly been losing air, rather than the proverbial bubble bursting.
...
He said buyers are still showing a lot of interest in the Lodi area, so he expects 2007 to be a good year for Realtors if sellers maintain reasonable pricing.
...
However, affordability could still be an issue for those looking to move to California from out of state, said Robert Kleinhenz, deputy chief economist for the California Association of Realtors...Kleinhenz said the cost can be prohibitively expensive for first-time homebuyers.
...
For renters and landlords, a similar slowdown is expected, according to Eileen St. Yves, who sits on the board of the San Joaquin County Rental Property Association. She said it can be difficult to find qualified tenants because lower income families are buying homes. In addition, there are more rental properties available because those who can't sell their homes often turn their home into a rental property as a way out. St. Yves said that just as with selling a home, landlords should price their rentals for a slowing market..."In 2007, the most important thing anyone can do is price right," she said.
Category: Best Regional Blog
Recognizes the best real estate blog focused on a local or regional real estate market.
Nominees:
