Tuesday, April 17, 2007

Sacramento Area Foreclosures At Record Highs, 922% Jump in Sacramento County

From the Sacramento Bee:

Foreclosures in full boom
In ominous sign of more to come, capital region default notices also hit record highs during first quarter of 2007.

There's a new kind of "For Sale" sign appearing in the region's neighborhoods -- offering property repossessed by the banks -- and there will be more, according to the newest round of statistics.

Both notices of default, the first sign that homeowners are having trouble making payments, and foreclosures reached historic highs across much of the Sacramento area during January, February and March, a property research firm reported Monday.
"You can't party that hard and not have a hangover. You just can't do it," said Keith McLane, who watches the market as principal of Carmichael-based West Coast Home Auctions, which offers sellers a quick sale for a lower price.

Notices of default -- issued after a homeowner misses at least two monthly mortgage payments -- reached their highest levels ever during this year's first quarter in Amador, El Dorado, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported.
First-quarter foreclosure numbers also reached highs across much of the region -- in Sacramento, Placer, El Dorado, Yolo and Sutter counties -- according to DataQuick, which tracks county property records.

DataQuick said 1,505 homeowners in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties lost their houses to foreclosure during January, February and March. That's up from 865 the previous three months.
"A lot of these lenders are going to end up with an awful lot of properties," said Pam Canada, executive director of Sacramento-based NeighborWorks HomeOwnership Center, which counsels people with mortgage trouble. "It's been difficult these past weeks particularly. There's more of a tone of desperation from people we're finding now. They have very few alternatives."
"It makes all the sense in the world," said Andrew LePage, DataQuick analyst. "This is probably the weakest (housing) market in the state, and showing some of the biggest year-over-year declines in home prices and some of the slowest sales."
Nationally, Yuba County ranked ninth and Sacramento 16th among more than 1,000 counties for the percentage increase of defaults from the first quarter of 2006, according to ForeclosureS.com, a Fair Oaks-based Web site that tracks them for investors. Placer and El Dorado counties ranked 19th and 20th.
Q1 2007 foreclosures per SacBee chart:
  • Sacramento County: 1,104, +922% YoY (previous high Q2 1997: 703)
  • Placer County: 154, +927% YoY (previous high Q2 1996: 90)
From the Stockton Record:
Foreclosure activity continues to soar, with the number of default notices sent to homeowners in San Joaquin County last quarter hitting the highest level in the past 15 years.
"We're seeing the tip of the foreclosures," said Jerry Abbott, president and co-owner of Coldwell Banker Grupe. It will take up to two years for foreclosure properties to work through the market, where at the current sales pace, it would take 11 months for all homes currently on the market to sell if no other properties went up for sale, he said.

That will further push down prices, which in San Joaquin County have sagged by more than 5 percent over 12 months, Abbott said. Expect that trend to continue into 2009, he said.
From CBS 13:
From Natomas, to Elk Grove, to Roseville, the signs are everywhere - for sale, bank owned, and foreclosure. Sacramento's chilly real estate market is creating problems in neighborhoods across Northern California.

Homes at Roseville's Morgan Creek Country Club often sell for more than a million dollars. When Matt and Elena Arney bought a new home here, they figured they were buying the luxury lifestyle the builder advertised. "We wanted a country club setting with other families. We have 2 young children," says Elena. The Arney’s were glad to see the community had what seemed to be a strong homeowners association to help protect their investment.
The Arney’s and their neighbors say they've watched as their community's lawns have begun to turn brown, weeds have taken hold and uncared-for swimming pools have begun to slime over.

The Arney's say the house right next door shows clearly what's happening. "When we had 500 frogs in our backyard, we wanted to find out where they were coming from,” says Matt.

The $850,000 home went into foreclosure. The weeds began to grow, and water and electricity were cut off. Then the pool was drained, it has since refilled with rain water.

A block away, the dying lawn and spreading weeds mark another empty house. Directly down the hill from the Arney’s, is an enormous house neighbors say was stripped of fixtures and flooring by renters, before falling into foreclosure. The Arney’s and some of their neighbors say they understand what's happening. What they say they don't understand is why their homeowners association isn't doing more to clean up the blight.
[H]omeowners fees usually go to maintain and improve common areas and facilities, not neglected private property.
Matt says sometimes he breaks down and mows the lawn next door. Merit Company says there's really nobody to assess for maintenance after a foreclosure, banks have no budget for that and apparently no interest - and the home's original owner is no longer a member of the association.

That attorney for Merit Company says he's working on new ground rules for a number of homeowners associations now facing these problems.


Perfect Storm said...

The sad part is that this tidal wave of foreclosures is still out at sea and is miles from hitting the shore.

Housing/Mortgage Doom 2007

Were on track for a 50% decline by 2009.

Foolish people and Mortgage Broker greed. Just freakin great.

Max said...

Looks like CalPERS is officially bailing out of the Saca project:

Saca plans a project buyout

Thank god that's over.

Gwynster said...

Now what do we do with the stupid flipping hole in the ground? That project is pretty much over.

I hadn't paid much attention to the high rise projects in Sac but did I see this right? The Aura building is right across from the greyhound terminal and the downtown mall?

Fader said...

This blog is great. I have been lurking a long time. The towers will not be built in the next 10 years. The 80% who change their contract dates are crazy. I don't believe that that many people would not take this chance to get out of their contract. The number of committed buyers seems high, probably like the inflated sales predictions we have been hearing all along. I wonder how Aura is doing - still no sign of activity and it is almost summer.

On another note - the wife and I toured the sunrise douglas developments last wekeend- the huge master planned community with some pretentious name I can't remember. Anyhow, there were already for rent and for sale signs on townhomes that had only been completed 18 months ago. The sales rep offered 40,000 off if we bought a home that day, like a used car lot. They have a map of all the planned community stuff, but I think that is over 10 years away also. Unfortunately, the insane financing is still out there because the builders are willing to subsidize buyers for up to 5 years until the real payments balloon in! Average people don't understand money and mortgages and they will just keep signing on the dotted line. When will the madness stop?

Don't buy a home right now, let the price sink to truly affordable levels!

anon1137 said...

Fannie, Freddie to offer subprime aid: prepared text

So the taxpayers are going to be bailing out subprime borrowers even before new regulations take effect to stop new subprime mortgages from being issued? How about stopping the bleeding before applying the bandage. Either that or the federal government should just start writing big checks directly to subprime lenders and mortgage brokers and cut out the middleman.

Max said...

That project is pretty much over.

Have a look at the comments on the Bee site. I think city hall staff are the only readers. :)

The smart money is leaving the building at last.

Diggin Deeper said...

Whats a few hundred billion dollars to the our federal government? Hell, Fannie can't even tell whether she's got enough money in the bank to cover her payroll, let alone bail stupidity out of ignorance. Looks like we're heading for a trillion dollar budget defict before too long. That ought to knock the dollar down for the count and let inflation run amok.

Sippn said...

What I read about Saca today is they are buying out CALPERS with another lender.

Gwynster - the bus terminal is moving, finally.

Diggin Deeper said...

Banks' results show rate, loan loss struggles


Doesn't look too bad for the banks lending prime. Loan losses rising but well within the margin of safety. Wells writes off $124 million in bad notes, Suntrust sees a 90% drop in loan profits due to lower margins on new loans and "higher writeoffs for near prime loans."

Got to remember that we're in the 1st or second inning of this mortgage mess and would expect to see the brunt of the problem surfacing sometime within the next two to three quarters. These are prime lenders with small exposure to subprime loans.
It may not matter because Fannie/Freddie look like they're coming to the rescue.

Max said...

What I read about Saca today is they are buying out CALPERS with another lender.

As long as the public is off the hook, I'm fine with it.

Ben said...

So, I think the development you guys are talking about in Rancho is Anatolia, right? I just saw this listed on craigslist: http://sacramento.craigslist.org/rfs/313658932.html
Can we please talk about this listing...it's hilarious and so sad. My favorite part is where they talk about the wetlands across the street: "Sit on the front balcony and watch the sun over the water."

I'm new to the blog here. I moved from Sacto last year and now live on the east coast. We sold our house for 400k (the summer before that a similar model sold for 450k) and I would guess it would sell now for 340K.

Gwynster said...

Well it soure looks like a crap tract home from the outside. I'm so going to pay 900k for that >; )

Max said...

I did a writeup on this development in February:

Delavan Circle

The guys who tried to flip the JTS houses are screwed.

AgentBubble said...

That $895K house in Rancho is pretty funny...Especially considering there's a short sale for $695K that's pending sale (exact same house). There's also a sold (exact same house) on 3/1/07 for $765K. Keep dreaming.

Sittin' Out This One said...

It appears that JTS has created more FB's than any other builder in Sacramento. They do have a particular skill. Some law firm should take note and explore that opportunity. It would be interesting to see how many NODs and NOTS' have been posted in the JTS subdivisions.

Max has done a good job of illustrating some of the dire situations in West Sac, Anatolia and Lincoln Crossing, which are all JTS subdivisions.

Here is the weird part. Over the last three months, some Japanese family members purchased 8 homes from JTS. All of them were bought with 100% financing and apparently they received $50-100,000 cash back from JTS.

Then last week, four neighboring houses were foreclosed by lenders for $100-$150,000 less than the FB family paid. They now have instant losses of $50-100,000 in one week. The family members are trying to rent all the properties now and will have $3500/mon negative cash flow. It is going to be a long 5 years to the bottom for these new Super FB's.

It just keeps getting weirder all the time. Eventually, people will get it, won’t they?

Perfect Storm said...

"Super FB's."

Sittin, I think you just coined a new phrase for the housing bubble.

Perfect Storm said...

If I put a $80K down payment on a house, do you think that I will lose it in the next year to depreciating homes values?

This is a fair question for anybody to ask their realtor if it is a good time to buy.

norcaljeff said...

So the Japanese beat us at auto making and now they're going to take from the tax payers through a mortgage bailout. How great a country it is to screw its tax payers for foreigners who came here to capitalize on our stupidity. God Bless America!

Sittin' Out This One said...


These buyers won't get a bail out. They bought as specuvestors and already have primary homes. And most of them are second generation Amercian citizens. They were simply of Japanese descent and all part of the same family.

You don't need to worry about them taking your tax dollars. They will be paying 2xs the property tax dollars of most people until they give up these cash eating monsters. Then they will pay more ordinary income tax on the foregiven debt in the foreclosure.