Friday, April 13, 2007

'Nobody Expected it to Turn Down this Far'

The Stockton Record reports on existing home sales in San Jouquin County.

Year-to-year, sales countywide dipped to 354 last month from 589 the previous March, according to figures from the latest Coldwell Banker Grupe-TrendGraphix monthly sales report, based on Multiple Listing Service data. Prices were down more than 5 percent over the year to a median sales price of $383,000 in March.

The number of houses for sale jumped, likely because of foreclosure listings, from 4,119 in February to 4,580 last month.

"It's been disappointing when comparing to the year before - and last year was a bad year," [Jerry] Abbott [president and co-owner of Coldwell Banker Grupe] said. "Nobody expected it to turn down this far."
...
"I see the market continuing to worsen, and most of are looking at 2009 before we see any improvement at all," he said.

15 comments:

Sippn said...

Can anybody remind me why people move to Stockton?

Rob Dawg said...

Stockton ain't Sacramento, Fresno nor Bakersfield.

Perfect Storm said...

Sippin the FOX theater is why. No Stockton sucks and will go down in flames.

Perfect Storm said...

Mortgage imploder is up to 56 and rising, more liar loan outfits taking a dirt nap. Oh music to my ears, I hope they all crash and burn.

Just doing my part to keep the housing market down turn fluid.

Housing/Mortgage Doom 2007.

Were on track for a 50% decline by 2009.

Sittin' Out This One said...

Sippn,

Stockton has a port, affordable industrial land, and will attract more of the distribution warehouse industry....provided consumer demand holds up, now the at MEW (mortgaged equity withdrawal) is no longer available to support retail sales.

Others commute to the bay area. Really. They can by an "affordable" house in Stockton, so they work in the East Bay and drive to Stockton each night to sleep.

Both reasons are tenuous at best, in this market.

Bakersfield Bubble said...

Charges filed against local realtors.

These are the same clowns featured in the Sac Bee

Sittin' Out This One said...
This comment has been removed by the author.
Sittin' Out This One said...

Perfect,

Is your prediction of a 50% decline by 2009 measured from the peak? I see the peak as June 2005. I have a friend who purchased a 1500 SF 3/2/2 in Rocklin for $148,000 in 1999. A similar model sold for $410,000 in early 2005. Are you saying by 2009 that house will be $205,000?

Let's look at that for a moment. $148,000 to $210,000 in 10 years = $62,000 in appreciation. That equals just a bit over 3.3% annual appreciation. Hmmm. Maybe you are right.

O.K., let's look at rent as a valuation measure. The property rents for $1500/mon (though rent is dropping and market may be closer to $1450). So annual gross rent is calculated to be $17,400/year. The normal measure of a GRM (gross rent multiplier) is 10 to 12 times (10 to 12 X's rent = value). So using 12 X's $17,400 = $208,000. Wow. Right on the money!!

Perfect, once again, you amaze me with your predictions. If the market truly reverts to the historical mean, you are absolutely correct. There will be a 50% decline in values by 2009.

Perfect Storm said...

Sittin,

I live in historical world, everything comes back to historical averages. Don't understand FASB 157 though, thats a bunch of bullshxx.

Housing Doom.

Sittin' Out This One said...

Perfect,

What is FASB 157? I do not understand your comment.

Sippn said...

Sittn, thanks, I was 1/2 kidding but you have a good point... and their long term property values are tied to those economic engines.

FASB - CPA humor (oximoron)

Perfect Storm said...

FASB 157 lets companies record their fixed assets i.e. property at fair market, instead of historical. That is how I read it, I think it is lame, just another scheme to make companies look better by minipulating the numbers. I can't believe FASB did it, oh well maybe I need to take another look at it.

mbc said...

A 50% reduction from 2005 to 2009 would get us back on a resonable appreciation path. However, that would also mean that the majority of buyers from 2003 to 2006, even those that put a lot down, would be way under water - a lot of them perhaps permanently. What kind of impact would that have on the larger economy?

Sittin' Out This One said...

mbc,

If there were 24,000 resales and 10,000 new home sale or 2002-2006, you would have 136,000 FB's in the market. Assume 20% were sub prime and really should not have purchased a home anyway, so deduct 27,200 sales. Assume another 20% were SF Bay Area FITs, so back out those GF by 27,200.

Your answer? You have about 80,000 home owners who are stuck for 10-15 years, or will send the lender a little jingle mail.

What percentage is this? Take 2 million people, 3/home is 667,000 homes. Using 70% ownership ratio, there are 460,000 home owners. So if 80,000 are truly stuck, that is about 15-20%. That seems like a really big and impactful number to me.

Does any one else want to take a run at the numbers? Max and Lander, you guys have better stats than I, with this back of the napkin approach.

Patient Renter said...

"that would also mean that the majority of buyers from 2003 to 2006, even those that put a lot down, would be way under water - a lot of them perhaps permanently. What kind of impact would that have on the larger economy?"

About the same as whatever effect it's having on the economy right now since a ton of people are already under water.