'I Certainly Feel We're at the Bottom of the Market'
From sacbee.com:
Capital-area home sales showed a slight rebound in May from the previous month, but sales remained well below last year and prices continued a long weakening trend everywhere but Yolo County.From sacrealtor.org [pdf]:
La Jolla-based DataQuick Information Systems reported Thursday that 3,211 new and existing homes changed hands in May in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That was 336 more escrow closings than reported in April in the eight counties. But it was about 1,000 fewer than in May 2006, DataQuick reported.
...
[A]cross much of the region median prices continue their 12-month trend of year-over-year declines. Placer County's 7.7 percent median price drop from the same time last year -- and a 5.5 percent decline in Sacramento County -- still rank among the highest price dips in the state's major urban counties. The median price of a home in Placer County in May was $429,000, down from $465,000 a year ago. It was $345,000 in Sacramento County, down from $365,000 in May 2006.
"Economists at the California Association of Realtors see another year or two of a soft resale market in Sacramento," said 2007 Association President and Realtor Tracey Saizan. "We’re particularly impacted because of the high number of new tract homes on the market that are being deeply discounted. It’s emotionally tough for the average home seller to compete with the aggressive price cutting that’s going on in the new developments."From nationalcity.com:
…
"It appears that sellers who are unable or are disinclined to lower their asking prices had better be prepared to wait another year or eighteen months at least to ride this cycle out," Saizan said.
…
At $350,000, Sacramento's median home sale price stands 7.7% below the $379,000 median price of a year ago.
The most highly concentrated declines, while widely dispersed, occurred in areas that had experienced the most dramatic run-up in overvaluation, including California, Florida, New York, and New England. The industrial Midwest was hit hard by the cutbacks in automobile manufacturing. The most dramatic declines among the nation's large metro areas were seen in California's Central Valley. Sacramento CA, where prices fell by 8.2% in the past year and 10.0% since 2005, experienced the greatest decline among the nation's large metro areas.From the Modesto Bee:
Property values seem to be on everyone's mind. That was especially true Wednesday for the more than 500 people who attended the Valley Real Estate and Economics Conference in Modesto. The hot topic was the depressed real estate market, and speakers offered conflicting views about how long it will last.
Some predictions were dire. Stephen Endsley, the longtime real estate investor who organized the conference, gave the most gloomy forecast: Housing prices will continue to fall 5 percent to 10 percent per year for the next five years. "It took us five years to get into this housing bubble, and it probably will take us five years to get out," said Endsley, a retired cardiologist.
That prediction was too harsh, according to Mike Zagaris, president of PMZ Real Estate in Modesto. Zagaris said the market may spend "another couple years drifting along" at current values, which makes this a good time to buy.
...
Few people are buying anything these days.
In Stanislaus County, only 3,700 homes are expected to sell in 2007, which is about half as many as sold in 2004 or 2005, according to Craig Lewis, president of Prudential California Realty. Lewis said median home prices have fallen from $414,000 in 2005 to $359,000 now, and it takes nearly three months to sell the typical home.
"First-time home buyers have the ability to buy now, but … they're sitting back and waiting because they think the price will go down more," Lewis said. He doesn't agree. "I certainly feel we're at the bottom of the market."
So does James Brenda, president of JKB Homes, which has developments in Turlock, Denair, Hughson, Oakdale and Riverbank. "A lot of price corrections already have taken place," Brenda said. He predicted home prices will be flat until next spring. "After that, it's going to be a long steady climb."
30 comments:
Hey what do you know, another bottom caller. Maybe he can say hi to all of the other past bottom callers... haven't heard from them lately.
There are a handful of bottom callers in that article. I count 4.
Seems that Endsley is the only one in touch with reality in those articles.
All those bottom callers are forgetting one majorly important thing: INVENTORY.
Is not just price that matters.
It is like cooking dinner for 200, when only 100 will show up. It won't matter what you do, you will waste food.
Here it is the same thing. You have 200 houses but only 100 people that want a home. NOTHING can be done for these 'lost' homes.
I'll repeat my prediction again. By the time this is thru, you will have houses that will find no sellers. Not because of price, but because the people who could buy them have not been born yet.
"All those bottom callers are forgetting one majorly important thing: INVENTORY."
Personally, I think they're missing something even more important: History.
Were the bottom to be now, this would be the fastest housing recovery in history for the size of the runup... and lest I remind everyone that this was the biggest housing price runup in our nation's recorded history.
"and lest I remind everyone that this was the biggest housing price runup in our nation's recorded history."
But price was not the only thing that ran up, inventory did as well. And inventory went up by high percentanges. And it was national, heck internationally from what I read.
There is no history to compare what happened to see where it will end up.
New inventory numbers for existing homes for sales reveal a marked slowdown in growth of For Sale signs, a positive signal for a market with more houses than buyers. Sacramento-based TrendGraphix reported 14,704 existing homes for sale at May's end. That's 678 more houses for sale than in April. By comparison, for-sale inventory grew by 1,807 homes the same time last year.
Inventory is growing steadily and I bet that 80% of the 6000 plus banked own properties in the Sacramento area are not even listed. That puts total inventory at 23,000.
Housing/Mortgage Doom 2007
Were right on track for a 50% decline by 2009.
New inventory numbers for existing homes for sales reveal a marked slowdown in growth of For Sale signs, a positive signal for a market with more houses than buyers. Sacramento-based TrendGraphix reported 14,704 existing homes for sale at May's end. That's 678 more houses for sale than in April. By comparison, for-sale inventory grew by 1,807 homes the same time last year.
Inventory is growing steadily and I bet that 80% of the 6000 plus banked own properties in the Sacramento area are not even listed. That puts total inventory at 23,000.
Housing/Mortgage Doom 2007
Were right on track for a 50% decline by 2009.
I agree with Mike Zagaris. Right now is a good time to buy. So was 2006. So was 2005, so was 2004, so was 2003.
Better buy now or be priced out forever
I'm confused about median price in Yolo County. The Bee article says May 2007 median price in Yolo is up 4.4% over May 2006.
But when I look at the May Data Quick graphs for Yolo median price is DOWN in 6 of 8 Yolo zip codes. (95627, 95616, 95618, 95694, 95605, 95691) In the two Yolo zips where May price is up (95695 and 95776) it's only up by 3.6% and 1.9%.
With 6 of 8 zips down and 2 of 8 up by less than 4% how can the whole county be up 4.4%?
Another anecdotal collection day for me. First, I noted that on the drive from Rescue to EDH on a backroad (Malcolm something...GPS told me to take it from Green Valley Road to whatever it is that EDH Blvd. becomes north of Green Valley Road) that for such a rural area, there seemed to be a lot of homes for sale. There was literally a sign always in sight all along that route.
Then, a client disclosed that her daughter was unable to retire as scheduled "because she needed the money to make two mortgage payments", and also added, "and they weren't going to get any more money from ME!" This same daughter is having severe anxiety attacks, bad enough that she has gone to ER a time or two. From what I gather, the daughter and son-in-law are building a new home and had not been able to sell their old home.
Where's little Jimmy Castro hiding? We won't hit bottom until Sippin gets bearish on the market.
With mortgage rates on the upswing this is going to be a cold summer for the housing market.
I think the Real Estate heads take
turns calling the bottom hoping to
sucker in buyers along the way,
so they can keep paying "THEIR"
mortgages. It might be the bottom
today, but there will be a new
bottom tomorrow and it won't stop
untill rents are more in-line
with mortgages payments and the inventory shrinks to normal levels.
Sometime between 09 to 11 is my guess.
That the news media treat the "economists" of the real estate industry with the respect due to academics is revealing. I do not think it is a result of intellectual laxity on the part of journalists, but rather a media editorial policy aligned with the "business class." "Sacramento Magazine" is the ultimate in such drivel, essentially serving as a large serial advertisement. The Bee and local TV news are hardly better.
From the Modesto Bee: Property values seem to be on everyone's mind.
jnsbranti@modbee.com what an idiot, "property values seem to be on everyone's mind...." at a realtor convention? shocking.... they did mention that people weren't educated enough to attract a Target Distribution center... and the Modbee Realstate(sic) dept. gets their hypothetical rejects...
Sign 'o the Bottom?
http://tinyurl.com/3x9ecc
Man, that's Spooky...
*tumbleweed blows by
Ha ha haaaaaaaaaaaa.....choke sputter...
Wait -- how about a local one?
http://tinyurl.com/2uxrov
Ha ha ha haaaaaaa....ha ha ha haaaa...
Okay fun's over. Brace for the recession.
Re: the Modesto Bee article, the most optimistic forecast seems to be the prices will be flat for the next year, which means that home values will fall by the rate of inflation. So if inflation is 4% and you buy a $500K house today, by next year you've lost $20,000 (plus taxes, insurance and maintenance). Borrowers need to remember that leverage works both ways.
Is $20,000 a lot of money to lose? If I save $500/month, that's almost 3-1/2 years worth of savings.
And then there's always the minute possibility that the realtors/builders will be wrong and the downturn will be longer and deeper than they predicted - no, that's not possible.
Colfax: I see what you mean about the Yolo number. There must be quite a few Yolo sales that are not listed in the Sacbee chart. For example, Dixon sales are not listed. Prices are certainly down in Davis and WSac.
wtf, cubes are big business....
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Here's yet another URL you might enjoy!
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"Inventory is growing steadily and I bet that 80% of the 6000 plus banked own properties in the Sacramento area are not even listed. "
Ahh yes, I momentarily forgot about this. Where does the 6000 figure come from?
Sad tale of frustrated home seller on SFGate:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/15/BUGL6QFGPM1.DTL
She wonders why potential buyers don't look at a longer time horizon. "If people let common sense prevail, they'll understand that a house is a long-term investment," diGiorgio said. "Realistically, most home purchases in the Bay Area, if well-researched, don't carry much risk when you are in it for the long haul. Home buyers are waiting for the bottom of the market without realizing that the bottom is only temporary."
Zillow says her house, 1030 Brown St., Martinez, is worth $583K. She bought it in 3/2003 for $446K. She listed it for $675K ($229k profit, $57K/year), and recently dropped it to $649K.
WILL SOMEONE PLEASE GET SOME COMMON SENSE AND BUY THIS POOR WOMAN'S HOUSE!!! By the way, she wants to move to Sac . . . . and she's probably a RE agent.
SF home seller needs to have some
common sense and realize buyers do
not wish to pay 2012 to 2019 prices
in 07. Maybe she needs to worry
less about other's common sense
and take a look at her greed. And
I'll bet when she does sell and gets ready to buy she'll be a ruthless buyer or will she have
"common sense" and pay 150k over
because housing is long term
"Home buyers are waiting for the bottom of the market without realizing that the bottom is only temporary"
No s**t!
What is wrong with trying to time the market?
If by waiting a year, I save myself $30K (low estimate), I would take it!
We all love to get deals and low prices on anything we buy. After all, the message from agents was to buy before it would get more expensive.
Some people make comments to try to make themselves seem smart, but a close inspection just shows how stupid they really are.
"Home buyers are waiting for the bottom of the market without realizing that the bottom is only temporary"
Exhibit A:
http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Note the sharp, pointy peaks and the nice wide bottoms. Bottoms are certainly not temporary, at least not so temporary that one should feel compelled to buy quickly.
"For example, Dixon sales are not listed. Prices are certainly down in Davis and WSac."
FYI, Dixon is in Solano County, not Yolo.
I use realtytrac.com to obtain the number of bank owned properties in Sacramento.
Vlach: You're right about Dixon, so there must be another explanation.
I thought it was in Yolo because I did a search of zips and it showed Dixon/95620 as being in Yolo, but the map shows Dixon as being in Solano.
Dixon wishes it was in Yolo. Solano county's population growth has gone negative while Yolo is merely flat.
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