Monday, January 01, 2007

More 2007 Housing Market Predictions

The Bee's Bob Shallit looks back on his 2006 predictions:

Prediction: Developers offer a new proposal for housing and retail at 10th and K streets. Reality: Retail, yes. Housing, no...Grade: B

Prediction: A proposed 21-story project combining lofts, office and retail gets under way at Eighth and I streets, site of a former Bank of America building. Reality: Nope. Homebuilder D.R. Horton pulled out of the project. Grade: F

Prediction: One of the lofty high-rise condos on Capitol Mall gets financing and moves forward. Reality: Developer John Saca still has some hurdles to overcome for his 53-story Towers project on Third Street. But he's secured CalPERS financing and is closing in on construction funds. Grade: B
Bob Shallit's 2007 predictions:
It will be a year of high-rise promises fulfilled, finally.
Condos, condos. We see progress in those bold plans to put high-rise condos in the downtown core. The most ambitious of the plans -- John Saca's, at Third and Capitol Mall -- will get additional funds from CalPERS and start to rise from the ground.

Speaking of high-rise condos, the county will find a new developer to step in with plans for a tower on land it owns at Eighth and I streets, following home builder D.R. Horton's decision to back off from its plans there.

High-rises in the burbs? Believe it. A local company will come forward with a bold plan for a condo tower along the Highway 50 corridor.
From the Auburn Journal:
In the Auburn area, it appears that 2006 was a buyers' market. But Realtors share an optimistic view that 2007 will bring increased sales.
"Some are thinking that the market may continue to drop and it's a mistake to make that assumption for much longer," she [Maureen O'Connell, co-owner of Meadow Gate Real Estate in Meadow Vista] said.

O'Connell said according to her research, the trend indicates that the market we'll come out of the slump. "We could see an increase (in prices) but we're not going to go down," she said.
Russ Broughan, owner of Prudential California Realty in Auburn, said that 2006 was a "correction market." "I'm sensing that there is kind of a bottoming out of the value-drop issue," Broughan said.
Earlier in the year, Auburn-area homes were staying on the market for longer periods of time. Some say that the reason is the homes were priced too high.
If the market continues to be flooded with houses for sale, there is a possibility that prices won't fluctuate in the coming year. "As long as inventory remains high we'll have an up-kick potential," O'Connell said. "If it's still flooded with listings, the prices won't go anywhere."


Anonymous said...


Saca will cancel the project completely. All his buyers will be walking away from deposit money which will lead him to stop the project.

drwende said...

Anonymous has called it.

Sacramentans don't want condos as anything other than a starter home -- except for the NPR-listening, earnestly recycling class (which I'm in, and which is adequately served by the condo developments near Sac State, their natural habitat). When prices for single-family homes plunge, demand for condos will go into free fall.

I suspect any condo boom was mostly driven by Bay Area investors anyway -- it sure was, here in Phoenix. Condos look like great investments if you live in a city where everyone lives in tiny urban boxes, but most of America is not like that.

patient renter said...

"O'Connell said according to her research, the trend indicates that the market we'll come out of the slump."

Wouldn't you love to see her "research"? According to the article, she's been in the business for 12 years, which means she started after the last crash had bottomed out. Perhaps then her research doesn't go back far enough to know that a real estate cycle (several years of depreciation before appreciation) typically takes 11 years to complete.

Lander said...

If the market continues to be flooded with houses for sale, there is a possibility that prices won't fluctuate in the coming year. "As long as inventory remains high we'll have an up-kick potential," O'Connell said. "If it's still flooded with listings, the prices won't go anywhere."

Could somebody please translate that paragraph for me? Although I've progressed to Realtorese 201, this one still escapes me.

Lander said...

From the SacBiz Journal:

"It's too much too soon," said John Frisch, senior vice president with real estate firm Cornish & Carey Commercial/ ONCOR International. "The fact is, most people in Sacramento don't want to live in a loft or a condo. People who moved to the Sacramento Valley, they live here because they want a home and a yard and garage. They don't want urban living. City planners and SACOG have overestimated what people can pay or will pay to live downtown."
"I'm not pro-sprawl," he said, adding he thinks the condo projects in downtown Sacramento are fantastic, but not what the average person wants. "These planners are trying to tell people where they want to live. Historically, that just doesn't work."

drwende said...

Translation is impossible -- that's the nervous babbling of a realtor who did some buying of her own at the top of the market. She's been futzing around with refinancing since then, too, suggesting her buy or buys were originally financed with a more exotic product. (Check the Placer County Official Records if you don't believe me.)

At least she and her sister still have listings. Many realtors don't.

Perfect Storm said...

drwende - have you seen my posts about Fannie Mae tightening? What is your opinion?

drwende said...

Perfect Storm -- Yes, and I've been trying to decide what I think, other than that it's closing the barn door after the horses are all halfway to Reno.

Anonymous said...

Shallit is a shill for the local development/business community...

Ozzie Tim said...

G'day Mate & happy new year.

Ozzie Tim here.

Translation for you.

I was just cheering it up with some makes and we came along to the topic of you. Seems that Mick found your blog and been keeping us all posted about you and your circumstances. Mick says your’e a whacker who’s as good as cactus, seeing the spot you’re in. Mick thinks you’re a brown-eyed mullet and you are two steps back from being a dero.

Mick and I were enjoying some amber fluid the other day (no, I don’t drink with the flies) and I said to Mick: “Bloody oath, mate! Casey’s back of bourke from solvency, but he’s no bludger!” Now my friends will attest that i’m figjam (but really conch). This bloke needs to straighten out right now or he’s going to be in a jail cell before July. That’s good oil says Mick (but he thinks you’ve got kangaroos loose in the top paddock).

Now I told Mick that I just thought you were not the full guild. I told him that you ought to see if the oldies could lend a hand or maybe buy some scratchies (yeah, right what am I, some dipstick? Not). So how are you going to get square with the world? Well, you could start making a quid. No not that bird-dogging stuff, go back to what you’re good at, the web design stuff. It stands out like shag on a rock that that’s the place to start. Get some moolah flowing in and then enjoy coldie (not too much or you’ll have a liquid laugh going on).

Now I’m no knocker here, and I’m not gonna skite, but I think you’ve been sprung and now its time to get dinky-di or you’ll cark it. Some of the posters here seem to think youre dag or a drongo. You call them “haters”.

Looks like you made a big blue and wound up upside down by taking all the money out of the deals up front instead of at the end. You’ve got a lot of yabber, but not much yakka, time to change your ways and you’ve really got to put your focus on making a quid, you know?

Go back to your lenders and see if you can nut out a way to restructure your loans. Tell them: “no drama, we can nut this one through. I’ve learned some lessons but I’m ridgy-didgy, no dero”. It’s no piece of piss to be true, but London to a brick you’ll be able to make it right. That’s what you’ve been saying all along, right?

You sometimes come off a bit bludger but you’ve come back of bourke to this point (learning your lessons on the way) and now it stands out like dog’s balls that you have very, very few choices. You can either BK which you’re not keen on, work the deals out (Buckley’s chance), walk away and become a dole bludger (the hater’s will hate you for that), or put all of that knowledge from last week at the uni to work (hope you were dux there mate!)

In my opinion, you are rooted just about every way possible.


Hooroo. Ozzie Tim

sam said...

hey, ozzie tim, that's just what John Saca did tell me when I went up to him and ask him bout one of them condo apartments on the fourtyeth floor,

I hear they got kitchens, iceboxes (good for my fortified wine) and a real bathroom...

why John Saca told me I could get a real fine loan from one of them rich city slicker bankers for no money down, interest only for two years, and no payments until next July...

That's for me, so I sign up...

I get tired of sleepin under my shopping cart, even tho it got a real fine tar paper and cellophane roof!

I can still go see my friend at Loaves and Fishes for dinner and then have them all back to my Saca Condo for dessert!