Sacramento Land(ing)

Friday, July 27, 2007

Sacramento Real Estate Market - July 2007 Water Cooler

Post off-topic links, observations, and stories about the Sacramento real estate market here. Please read the comment policy before posting.

104 comments:

... said...: ..... 20 or so high-rise housing projects are in various stages of execution in downtown (San Jose)

Regarding Saca's 1st hi rise atempt... IMHO Saca was run off purely due to political pressure exerted on the CAPERS board by their stakeholders ...oblivious to the fact that CAPERS regularly invests in more risky RE related ventures including subprime derivitives... they're just not as visible.

What does CAPERS get to do with it now? Write off the current loss in construction investment, write down the property to current market (less "repair costs") and start over with a clean slate, possible a lower cost basis, all acceptable (covered) in this market... if they fail in the future, they can still blame it on Saca. What do you think CPAs? Smell a rat?

Now on Johnny's behalf, if he gets attempt #2 off the ground and completed successfully, despite the market, thats all I'll need to figure out who was right all along.

Go, Johnny, Go.; Monday, July 02, 2007 7:04:00 AM
Diggin Deeper said...: Based on Saca's 1st attempt, what crazy investor would give him a dime to build #2? His only hope is that there are enough suckers waiting his every move, and if he could just get few hundred million, he could pocket his fees, and walk away leaving a second big hole in the ground behind him. Saca's a modern version PT Barnum, imho.

As for CALPERS, time will tell about those derivatives, CDO's, etc. When they blow, CALPERS will have a lot more explaining to do than their deal with Johnny. And that hole will remain a hole in Sacramento's landscape for a long time to come.; Monday, July 02, 2007 7:47:00 AM
Hamsilton said...: Yeah, what works in Silicon Valley can sooooo work in Sac... State workers are so ready to start movin on up, to a deeelux apartment in the sky. And those $600.00 HOAs will hardly even be noticed after the mortgage payment on an 800k apartment.

I think it is a great idea. Damn reality keeping a good vision down.; Monday, July 02, 2007 8:14:00 AM
Hamsilton said...: This comment has been removed by the author.; Monday, July 02, 2007 8:22:00 AM
Anonymous said...: Once again I thank my lucky stars, (and green clovers, pink hearts yada yada yada) that I'm vested with UCRP and not CalPers.

Saca's project was bound to fail. It's just not the right market or the right time.

In other news, the people down the street put their house on the market because the husband died and the wife is now living with the daughter out of state.

A young couple just bought it for 35K under list which was 85K less then the same house 2 doors down sold for in Summer of 2006.

The best part, she is a stay at home mom and he works in ... drum roll please... construction. My guess is they plan to flip it but frankly the place is in good shape. It just didn't have stainless and granite, and trendy colors.

And for those following my Davis housing death count, that is #5 since March.

In the meantime, my favorite KB model was just reducted again to 357K. So comparing 3br houses, I could get a old 1080 sqft house in Davis for 495k (or as little as 360k 2 blocks over for trashed out student rentals) or I could get a 2150 sqft all decked out house in Woodland for 350K. Hmmmm; Monday, July 02, 2007 8:29:00 AM
Hamsilton said...: Yeah, stupid Capers..with there salty sweet goodness...taking my pasta dish to the next level..why I ought ah.; Monday, July 02, 2007 8:30:00 AM
AgentBubble said...: Preliminary June sales stats are posted over on the Sac Real Estate Stats blog...; Monday, July 02, 2007 8:56:00 AM
Diggin Deeper said...: Just have to keep coming back to the fact that any hole can be filled in...but its a little tougher to bulldoze entire neighborhoods.

It's a shame so many have to pay the cost for irresponsible home ownership by a wide group of people who were doomed to fail from the very beginning. If the typical Sacramento neighborhood has 10-15% of its total volume at risk, then 85-90% of those living in that neighborhood will have to deal with financial affects of those that go down in price and stature, where foreclosure is the only option.

If I had to buy today, I'd only look at new developments, those that are less then a year old. The thought here would be that due to the new lending standards, those that bought recently, would be more likely to afford owning that home, thus less pressure later on by "poor neighbor" syndrome other "hoods' are faced with.

The downside would be I'd be buying in a neighborhood that might never get finished due to lack of buyers in the first place.; Monday, July 02, 2007 9:49:00 AM
Diggin Deeper said...: The numbers are right in line with the market. 11 months inventory(plus another 3000K bank owned)would take it closer to 13 month inventory.

3600 June 2005

2300 June 2006

1600 June 2007

Obviously its not bottoming out yet.; Monday, July 02, 2007 10:06:00 AM
patient renter said...: Good little blog post from Dean Baker, worth a read:

http://tpmcafe.com/blog/coffeehouse/2007/jun/28/deflating_the_housing_bubble; Monday, July 02, 2007 10:25:00 AM
Anonymous said...: Sippin,

I looked over your data and replied on AB's site >; ); Monday, July 02, 2007 2:35:00 PM
BMac said...: zillow thinks my (rental) house is worth $450k. ROFLMAO!! It sold to my russian, bay area speculator landlord in May 2005 for $437k. I rent for $1450/month. Its about 1700 sq.ft., 3/2 in Southport.
http://www.zillow.com/HomeDetails.htm?zprop=61225355

It 'might' be worth $345k to the right sucker today. Her SF agent called me 6 months or so ago and offerred the house to me for $400k.; Monday, July 02, 2007 3:59:00 PM
Anonymous said...: Want scary, for $1,450 you can get a newer, bigger 4/2.5 just off the lakes. I saw one listed on a property rental site last weekend.

I'm not even sure that area is worth 345K, depending on HOAs and MR but you are definately getting the better end of the deal.; Monday, July 02, 2007 4:14:00 PM
Cmyst said...: I confess I drove out to that Blackstone (or Black"something") development off Latrobe Rd in EDH today. Work finished a bit early and I had to go to the EDH post office anyway.
Not much to see right now. I did go to the area indicating it was Lennar's, and look up into the hills. I wondered if the view would be blocked by houses in a year. I wondered if trees would ever become as lush as in the office park nearby.
These Lennar energy efficient homes are really appealing to me. I've considered contracting my own home, and I'd almost surely put solar electric panels and water heater in to any home I bought.
Ultimately, it depends on the price. I'm willing to pay more for solar, but not willing to pay today's prices for it. OTOH, I'm starting to see that the older resale homes I like are much stickier on price than new construction.
I hate new construction. I hate new subdivisions. That I am driving out and looking at one speaks volumes for builders getting smart and offering homes that people actually might find appealing. Will my aversion to hot, glaring, desolate subdivisions filled with neo-Mediterranean stucco housing overcome my yearning to be eco-friendly and energy wise? Probably. Plus, there is that asbestos thing out here.
Roseville has the solar homes, too, and I might be able to actually look at one that's finished there. Might be my Friday project.; Monday, July 02, 2007 6:38:00 PM
BFB said...: Cmyst: I've almost resigned to looking at some new developments also, but so far I have not been motivated enough. We've just started going to open houses around East Sac. and vicinity. They are coming down, but very slowly. Someone here (PR?) advised me some time back to be patient, and we are trying. Mrs. E and I pull in twice the median for this area, and still that would only qualify us for ~380K using traditional measures. It's depressing. Now that some of these places are actually dropping into that range, it gets tempting.
Still, I know deep down (and try to convice the Mrs.) that $380K will buy an even nicer place next year. It it weren't for all y'all and the rest of the bubble blogs, I'd go insane!

Totally different topic:
Has anyone noticed some of the newest marketing tactics for the resales? Appliances in-place, very wide angle pics, better lighting, etc. Add Cost Plus grade furniture to embellish all the empty houses, but now I've seen three "coming soon" signs around these parts. I've also noticed they seem to be the older more established agents. . . hmm.; Monday, July 02, 2007 9:26:00 PM
Anonymous said...: These are people hiring stagers to come in. I've seem some agents do their own, which tells you how much time they have on their hands now.

The minute I see a staged house, it's like a flashing red light. The seller is trying to hide something, whether it's a bad layout, a cheap flip job, or a super inflated price. So I ask the listing agent if she has room dimmensions and I start inspection little stuff.

Sheesh, I'm not old enough to be this cynical >; ); Monday, July 02, 2007 10:24:00 PM
Anonymous said...: E, I call what you described the HGTV effect. Hang out on the RE or Buying and Selling blog for HGTV and you'll see how nuts it is.

My favorite questions are:
What color to paint the house to make it sell?
How do I bury my St. Joseph?

It's hysterical.; Monday, July 02, 2007 10:28:00 PM
Cmyst said...: Lately I've branched out into watching HGTV. I almost lost it when a seller was criticized recently for their choice of countertop replacements -- they (gasp) did not choose granite! OMG!! Fatal error!

Watching these shows gives me confidence in my ability to perform most cosmetic renovations myself. I love to watch them rip out walls and cabinets.; Monday, July 02, 2007 11:02:00 PM
norcaljeff said...: Cmyst, you'll save at least 20%, maybe more, by buying new. Plus you'll get no closing costs if you negotiate it right. Also, as I can attest since I'm in a 25 year old customer home now, you'll save about 70% or more on your energy bills with new, and go solar and you'll save about 99%. Don't know the new homes unless you have cash to burn.

Btw EB, those "coming soon" tactics are such BS, esp in this market. The b_lls of these realtors kills me. We had one of those morons in my neighborhood, it was "coming soon" for about 3 weeks, and now it's "for sale" and has been for about 9 months. Those sellers are paying 1-2% of the sale price to stage a home. Someone's getting rich in housing, you can always find someone, it's amazing! Happy Marketing.; Monday, July 02, 2007 11:25:00 PM
smf said...: Hmm...

This is all called (by me) the 'Home Depot effect'.

That means that everybody picks the standard off the shelf (therefore cheaper) stuff from the store.

This creates what my architect sister-in-law calls 'custom track home'. Where the home is a custom home that looks just like other new custom homes around.

We have this problem, for you see that 4 years ago we bought a custom home, but don't worry, we still like it and it is affordable to us.

Anyways, we thought our little home was 'special'. Let me see if you all notice similarities.

1. Columns in the entry, with marble flooring.
2. Laminated flooring throught.
3. Crown moulding!!!
4. Granite!!!
5. 10' ceilings, with some areas having special ceiling treatments.

All in all, a very nice house. But since everybody did about the same thing, what looked 'special' to us now, will looked aged and out of fashion if we sell too late in the game.; Monday, July 02, 2007 11:26:00 PM
Anonymous said...: I have to admit I love the 10ft ceilings in the new builds. It's the only "factory" upgrade I'd buy for over 30 yrs. Everything else we can do ourselves or have a friend do.

Cmyst, tearing out cabinets and walls is a hoot. Did that in my loft when I lived in LA.; Tuesday, July 03, 2007 7:09:00 AM
Cmyst said...: Here are my gripes with new construction:
#1 -- shoddy workmanship. Often, the newer subdivisions have deteriorated rapidly past older ones.
#2 -- extra fees like Mello Roos and HOA fees. Having lived in a condo, I know that the HOA (albeit with the neglect of most owners to show up at meetings or run for the board)can raise the fees at any time, and as places age the cost of HOA fees goes UP, not down.
#3 -- No mature trees or landscaping.
#4 -- Uniformity of design.
#5 -- Incredibly small lots. I do not hear or see my neighbors from my backyard in the older home in EDH that I'm renting.
Yet, these homes are modest in size and afford plenty of "neighborliness" on the street side.

New construction had been totally off my list until this week for those reasons. But if I can find a nice, one story solar/energy efficient home on a corner lot on a cul-de-sac in a decent area without asbestos/wind/flooding problems -- especially for less per sq ft than resale -- it might be very tempting.; Tuesday, July 03, 2007 7:38:00 AM
Buying Time said...: Cymst -

We are tracking right there with you on the new home/resale struggle. Price and energy efficiency are much better new...but the extra fees, as well as knowing how a community will age makes me very partial to resales.

Separately, but related, I think people are generalizing way too much about the assumption that older houses are built better than the new ones. In our last house built in 1979, I don't think we had a single square wall. Older houses can have very shoddy workmanship as well. Its just, over time those problems are more apparent than they are when a house is new, so we know to avoid them. That poor workmanship would also be reflected in the price, which is not necessarily true for new homes....although I would imagine Centex can charge a premium over Beazer.; Tuesday, July 03, 2007 8:11:00 AM
Anonymous said...: I think we have a new low

MLS #: 70070495
3/3 2850 sqft 378K or $132 per.

Nice.; Tuesday, July 03, 2007 8:47:00 AM
patient renter said...: Cymst: You pretty much named all of the reasons why I WILL NOT buy new construction. Small lots, uniform design, no trees, and HOA/mella roos!? Almost any one of those things are deal breakers for me, nevermind them altogether. My only gripe with older homes is energy efficiency, but that can be factored in as a cost (and taken care of as such).; Tuesday, July 03, 2007 9:32:00 AM
Lander said...: It would be interesting to know if there is a correlation between quality and the point in time a home is built during a housing cycle.; Tuesday, July 03, 2007 9:57:00 AM
patient renter said...: Found this in the comments on Ben's blog:

Top 10 Places Where the Housing Bubble Will Bust

"Experts say that prices need to fall to 1997 levels to be sustainable."

http://efinancedirectory.com/articles/Top_10_Places_Where_the_Housing_Bubble_Will_Bust.html; Tuesday, July 03, 2007 12:29:00 PM
Cmyst said...: I suspect that quality right now in the Sacramento region is going up, even as prices are going down. I am guessing that most of the unskilled/incompetent were among the first to be laid off, and that builders are very aware of potential lawsuits as their profits nosedive.

I went up to Cameron Park/Shingle Springs today for my job, and if you head north on Cameron Park Dr and turn right on Mira Loma, and go past Rasmussen Park, a little ways up the road there is a small enclave of large homes on fairly large lots. These homes appear very luxurious. As I said, this is a small subdivision, and when I drove in I counted 12 houses for sale and 4 empty lots for sale.
It so happens that the home I was visiting was for sale, so I asked how things were going. I was told there had been lots of interest in the home (it was gorgeous inside) but that the offers they'd gotten were ridiculously low and "we aren't giving it away!". I also found out that they've already purchased another home in Nevada.
If the home in Nevada is as palatial as this one, they have to be losing thousands every month they don't sell the place in Shingle Springs. On the plus side, the house was furnished and accessorized completely. I've been in several places up in Serrano where the family was living in 2 rooms of a house with the furniture they moved in with.; Tuesday, July 03, 2007 2:49:00 PM
anoop said...: What will happen when the truth becomes public?
http://tinyurl.com/2xfa78
It'll be really sad to see this
whole thing unravel.

Maybe I should change my name to "worried about a depression". :-)

Prices are already down quite a bit. I'm surprised they are already at mid 2004 levels without any of the bad news hitting the public. When that happens and the layoffs begin across the board, it'll be a mess. With strong filters on the bad news we get a 15% drop. What happens when there's bad news all around?

The house prices I'm checking are in a particular area - 95678 and I'm basing that off Zillow and the price that I was going to be buying at. Are other ZIPs like Granite Bay also getting affected similarly?; Tuesday, July 03, 2007 3:19:00 PM
patient renter said...: I just noticed at the implode-meter site, that Wells Fargo shut down its "alternative" lending division a few days ago. This is a bigee.; Thursday, July 05, 2007 8:46:00 AM
patient renter said...: Calculated Risk just posted something about the Well Fargo division's shutdown. I still think this is big news.; Thursday, July 05, 2007 4:11:00 PM
Wadin' In said...: Sippn,

The pension fund is "CalPERS" (California Public Employees Retirement System). No one has ever accused them of being geniouses, but they have done a solid job of earning a good return on the invested capital which is contributed by the state employees. The problem with CalPERS is underfunding by the employees. The fund needs to support 260,000 retirees, but they only have about $140,000/retiree saved up. They will have to face the music in 15-20 years or so, just like social security.

On another note, I see Sacramento now has set an all time "for-sale inventory" record. Go here to see it: http://bubbletracking.blogspot.com/2007/01/tracking-sacramento-metro.html
We now have a house listed for sale on MLS for every 118 people in the area. In August, you will see that ratio go below 1 house per 115 people.

The all time record will set a new marker for correction factors. With all the sellers, short sales and foreclosures, this market will be tanking for 2-3 more years. There is a lot more inventory coming down the pike.; Sunday, July 08, 2007 6:35:00 AM
Jacob said...: This comment has been removed by the author.; Sunday, July 08, 2007 10:20:00 AM
Jacob said...: Is that 1 house per 118 people counting all people in the area (kids etc.), families, ie people that wouldnt buy or would only buy 1 home anyway.

How many homes are for sale vs how many total households there are in the area?

Looks like it is closer to 1 home per 30 families in the area. Assuming 100% of those families wanted to buy and could buy.; Sunday, July 08, 2007 10:25:00 AM
Unknown said...: Gwyn,

imho, those Woodland KB Homes are pure poison. The wife and I call that spooky, half-built place "Arrested Development."
Talk about ripe for Section 8 Hell in the Very Near Future...
And don't expect the promised park, school, greenbelt, etc., situation to go well.

...and as for the $450k+ it still costs for any non-condo over 1200sf in Davis, well -- well -- well that's hella effed up, then, in't it?

Serenity Now!; Sunday, July 08, 2007 1:54:00 PM
Unknown said...: Gwynster -- my first post here. Since you are in Davis, check out this one:

MLS # 70069538 3,470 SF
Asking: $849k

Prior sales:
08/10/2005: $1,250,000
12/27/2001: $675,000

Listing History:
$1,320,000 On 2006-05-12
$1,318,000 On 2006-07-08
$1,250,000 On 2006-07-22
$1,199,000 On 2006-09-02
$1,189,000 On 2006-09-30
$1,125,000 On 2006-10-14
$1,060,000 On 2006-10-21
$999,000 On 2006-12-23
$1,070,000 On 2007-03-10
$1,025,000 On 2007-03-31
$999,000 On 2007-04-07
$1,070,000 On 2007-05-12; Sunday, July 08, 2007 4:11:00 PM
anoop said...: yay!!!

As always I'm looking at the houses that I was thinking of buying early 2004. My price was 333K with no options. Add options that were in the model (quite modest) and a backyard and it would put it around 370K at least. Guess what - 7585 Millport Dr is now selling for 350K according to Zillow (it's listed on FIT for a higher price, but googling for that address shows the lower price).

Phew, what a relief! I can finally rest knowing that I absolutely did the right thing by not buying. Feb 2004 was when I was going into contract and then I backed out.

I hope it doesn't get too much worse, though. With all the lies about the current state of the economy who knows whether I'll be employed a year from now!! However, regardless of where that ends up, it is now clear that not buying was the right thing.

Now just paranoid about the economy and where it might end up.; Sunday, July 08, 2007 7:09:00 PM
patient renter said...: Congrats paranoid :) Now that you're at the break even point, the rest of your wait will be 100% reward.; Sunday, July 08, 2007 8:56:00 PM
Anonymous said...: Wont,

There are some interesting price adjustments in Davis. You can easily get a 3br for the same price as what a 2br cost in 2004.

Just think of all those Dady houses purchased in 04; most are now underwater >; )

Now Mace Ranch area always seemed overvalued but that's just me. A dear friend bought a home on Arena in June of 01 for 200k. That should give you an idea of how far things can fall.; Monday, July 09, 2007 8:58:00 AM
Fanchew said...: New construction vs resale is a question I keep see-sawing between too. Currently, I'm leaning toward new construction not only because new builds are more energy efficient but may be easier to maintain. Even if you remodel an old home, it's still an old structure that needs upkeep. And, those shows on HGTV abour remodeling illustrate that some flippers/remodelers are rather callous which makes me want to ask the question of whether the owner was remodling to live in or to flip a profit. Mello Roos and HOA fees are hard to digest but they come with the territory. I guess an HOA might be a good thing if the Lodi article Lander posted is an indication.; Monday, July 09, 2007 12:31:00 PM
anoop said...: >>>>>>>
New construction vs resale is a question I keep see-sawing between too.
>>>>>>>

The only reason to forego new construction is location. Around Roseville, most of the good locations are all built up. Everything that's being built now is a 20 min drive from the nearest freeway. If I were willing to deal with that, Granite Bay would be a much better locale since it has the best schools in the area.; Monday, July 09, 2007 1:11:00 PM
anoop said...: Does anyone know where to get ratings of schools on the web?; Monday, July 09, 2007 1:12:00 PM
Lander said...: Look under the "Sacramento Real Estate Tools" section in the right sidebar.; Monday, July 09, 2007 1:15:00 PM
norcaljeff said...: PR, just cut to the chase and go private :); Monday, July 09, 2007 3:01:00 PM
... said...: G - the homes were never less than about 1/2 mil in Lake Alhambra unless it was one of the subsidized lottery "affordable" homes on Arena (2 total); Monday, July 09, 2007 3:37:00 PM
Cmyst said...: I've begun to consider new construction, but of all the things I hate about it, I hate the HOAs and Mello Roos most of all.
When I was a kid, there was a vivid purple house that we used to pass on the way to my grandparent's, and there was a lot of speculation on why anyone would paint their house purple and how garish it looked. But I always liked it. On a scale, I'd be more comfortable living next to a purple house than being told my exterior stucco could only be shades of tan or brown, and my mailbox must be black.
What's the deal with Mello Roos? There's a new energy efficient, very small subdivision going up off Pecan St. between Greenback and Madison. Would it have Mello Roos? It's in an established older residential area, very near a park.; Monday, July 09, 2007 4:32:00 PM
anoop said...: "...mailbox must be black."

Most new developments seem to have common mail areas. No black mailboxes. :-); Monday, July 09, 2007 4:55:00 PM
Cmyst said...: My story of the day:

I was in a very nice, older-but-not-real-old neighborhood off Auburn-Folsom Rd./Oak Ave. with a Folsom address. Lots of houses for sale with pretty decent-sized lots, I'd say about twice as big as the typical lot in newer subdivisions. Three car garage homes that were obviously top of the line when they were built, and each home was different. No stucco.
One yard caught my eye due to the brown grass, and when I drove past, it also had two large potted palms that were dead in the entryway. And a notice tacked to the door.
I don't know why, but it took me aback. In my mind, maybe, I think of neighborhoods like this one as being more "legitimate" as upper-middle-class, whereas with new stucco McMansion ones you expect to find people who are easily swayed by hype and flash -- if that makes any sense. I kind of expect and relish in homes being foreclosed in the "trendyburgs".
But there it was, a foreclosed home and brown/dead landscaping. It sent a chill down my spine.; Monday, July 09, 2007 8:12:00 PM
Wadin' In said...: CMYST,

Yes those 8.5 x 11 inch NOTs always take me back. I have been driving around a bit lately and have seen a dozen now. One on Arnold drive in Rocklin. Good old Arnold drive, where I saw the first flipper eat it big time. She was from Fairfield and let someone talk her into using her credit to buy a 2800 SF house for $490k. They put $15k into it and put it up for "auction" the next weekend in early 2006. A fake auction where you list the price your willing to pay and they call you back if you want to match the high bidder! I went back late Sunday night just to see the action: NOTHING. No offers, no maybes, no NOTHING. Foreclosure about 9 months later. Some Asian guy bought it for $450k. He has been eating $1600/mon negative for 8 months. Now the houses are listing for $400k on Arnold. He caught the falling knife and lost $65k in 9 months.

This market is a shipwreck in slow motion. It just keeps getting worse. The MBS servicers can not reduce prices fast enough to sell into a declining market. They need "approval" from Wall Street. Except for Countrywide. They are going to lead the pack down as they reduce prices 5% every two weeks or so. CFC is a viscious company and knows their best strategy. Every other lender will get on board or be taking much larger losses later. Laughable idiots now, all of them! The decline is picking up speed rapidly and will get unbearable by late 2008. The pain has yet to begin. In 2009, realtors will be selling their cars for pennies on the dollar. They will be begging for jobs the pay $10/hour. I only know because I have been there!; Monday, July 09, 2007 9:03:00 PM
anoop said...: How does one decide what is a fair price for a house? Without mello roos, hoa, and property taxes, if one had to match rent we wouldn't ever be able to buy.

Currently, there's a 2bd/2ba condo on sale for $265K. At rough guess, this translates to about $1800/mo for a 30 year fixed mortgage. Throw in mello roos ($60/mo), hoa ($165/mo) and property tax ($250/mo) and you have cost of owning at ~$2200/mo. There are also estimated maintenance costs. This would rent for about $1400/mo, if you're lucky. To make this worth it, you'd have to knock at least $800 off the mortgage which means we're looking at a price of $147K.

Is my math correct? Will the bubble correct to such a great extent? I was thinking of bidding $200K for that condo. What do you guys think?; Tuesday, July 10, 2007 10:34:00 AM
Anonymous said...: I'm always cautious about condo because I've seen those fees increase over time. All it takes is a few neighbors not paying their fees then the building needs a new roof and blamo, they raise the fees by 100 or get some crazy special assessment for 6k. I've seen it happen even in quiet little towns like Springfield, Ill.; Tuesday, July 10, 2007 11:19:00 AM
Anonymous said...: This is a big news day
All from CNN

*Mortgage resets: Record bill coming due

*Dollar tumbles to record low against euro

* S&P to slash subprime bond ratings

*Housing woes hammer Home Depot

*D.R. Horton home sales plunge; expects loss

Wow - just wow; Tuesday, July 10, 2007 12:05:00 PM
patient renter said...: Paranoid: I agree with what Gwynster said. Overall, I'd say that seeing that sucker drop to below 200k over the next few years would not be a surprise, considering that the non-bubble price of a house that size is EASILY under 200k in most areas.; Tuesday, July 10, 2007 1:44:00 PM
patient renter said...: Gwyn: That CNN story on the mortgage resets should be an eye opener to the mainstream masses (assuming they can bring themselves to read it). It is front page in that section of CNN... I think that one of the components of widespread price cuts is the general acceptance/acknowledgement of the fact that prices are currently inflated, still.; Tuesday, July 10, 2007 1:46:00 PM
anoop said...: I'll put in the bid and see what happens. It's about 25% below the asking so it'll be interesting if they agree to drop that much.; Tuesday, July 10, 2007 1:54:00 PM
Hamsilton said...: PR,
The condo market is going to get hit the worst, Who would want a condo for 200k when you could buy a SFR for that much or a little more? I would offer 150k max, since a condo could become unsaleable now or in the near future. My mom bought a 3 bedroom townhouse in Fair Oaks for 100k in 2002, people have been trying to sell in her complex for 200-300k in the last couple years, none have sold. They're nice too, totally worth 100k. In a normal world Condos quite often are like time shares, almost impossible to get rid of but at least they are cheap.; Tuesday, July 10, 2007 3:20:00 PM
Cmyst said...: When I moved into my condo I was hit about 3 months later with a 3K assessment, which we were allowed to make in 3 installments within the year. It was quite a shocker. Thank goodness I bought way under my means.; Tuesday, July 10, 2007 9:04:00 PM
anoop said...: Thanks for all the insights about the condo. I guess paying rent isn't all that bad when you put together property tax + mello roos + HOA dues + cost of maintenance.

The agent that I put the bid through came back and said seller won't go below $250K. I guess I'll just wait another year or so and see what happens.; Wednesday, July 11, 2007 10:49:00 AM
anoop said...: By the way, I know someone who bought in the same complex in 2002 when it was new for $165K. So may be the $150K price is not so unrealistic, if the market continues to fall the way it already has.; Wednesday, July 11, 2007 10:53:00 AM
patient renter said...: "The agent that I put the bid through came back and said seller won't go below $250K."

Good riddance. It'll be worth the wait, no worries :); Wednesday, July 11, 2007 2:11:00 PM
Anonymous said...: Well PR, I think you were saved frankly.

Now I'm known to be a sometimes betting woman - how long do you think before the sellers contact PR about that 200k offer again?; Wednesday, July 11, 2007 4:05:00 PM
anoop said...: It's already been dropped from 265K to 255K. May be in another 6 months it'll be at 200K (assuming the market stays as dead as it is), which is probably will unless the economy manages to magically avoid falling into a recession.; Wednesday, July 11, 2007 8:14:00 PM
anoop said...: Anyone going for this auction on July 22 at 1 pm?
http://tinyurl.com/3be4ec

I'm thinking of going for entertainment just to see how it works.; Wednesday, July 11, 2007 8:40:00 PM
Anonymous said...: Maybe

There are a few houses in Dixon I'd watching and one in Woodland that are going up for auction. The Dixons homes are a train wreck waiting to happen so this could be pretty amusing.; Thursday, July 12, 2007 6:52:00 AM
Anonymous said...: OMG it's a beautiful day!

Yolo's plans stir up Davis
http://www.sacbee.com/101/story/268702.html

Davis needs develop outward because it needs access to a fresh water supply. Our ground water is pretty awful and the salt levels are elavated. I was just talking to one of my researchers doing E Tox work in the area about this. Glad to see it pop up in the Bee.

Davis needs the growth badly. All I have to say is Go Yolo!; Thursday, July 12, 2007 7:03:00 AM
Anonymous said...: Damn no one is as excited as I am about the Yolo Co. expansion plan.; Thursday, July 12, 2007 2:37:00 PM
patient renter said...: "Damn no one is as excited as I am about the Yolo Co. expansion plan."

I'm not sure what to think yet. Davis is a potential future residential target for myself and my sig. other, so we're interested... I think I'd be happy is the new development was purely residential (driving down prices), but I am thinking that a commercial/industrial/residential development is a mixed bag. More jobs is good, but that means more people too, which might not necessarily have a positive net effect on Davis home prices.; Thursday, July 12, 2007 3:05:00 PM
Anonymous said...: The thing is Davis isn't going to stay Davis no matter what happens.

Frankly, I'm surprised Yolo Co. hasn't let Woodland grow south farth and faster then it already has. If I were on the Yolo co BoS, I'd have told Davis to shove their attitude a long time ago.; Thursday, July 12, 2007 3:36:00 PM
Anonymous said...: Geez the Bee is covering Casey S as he begins to beg for a real job.; Monday, July 16, 2007 10:31:00 AM
patient renter said...: "Geez the Bee is covering Casey S as he begins to beg for a real job."

Just yesterday I checked out his blog for the first time in a while. It's degenerated (more) into a blog that exists purely for the purpose of making money off itself, while discussing that purpose. Pretty wierd.; Tuesday, July 17, 2007 9:13:00 AM
Cmyst said...: Gwyn, PR, anyone else going to the /finger brackets "auction" /finger brackets off please post your observations tomorrow?

I drove by one of the houses I track again yesterday, just to see if the neighborhood was much better than I recalled. It wasn't. This house will not sell unless they drop it at least another 50K, which will mean they bring about 100K to the closing -- so I wonder when this one will end up REO.; Saturday, July 21, 2007 8:33:00 AM
Anonymous said...: I may not go. A close friend is going through a nasty breakup and she wants to hit napa today. She's offering to pay and drive - damn.

It's either that or I bring her with me and we flirt with RE investors all day and dump them violently after the auction - she's got that kind of mean on >; )

So if keep an ear out for the sole Woodland house. It's going to sell too high but I'm curious what it goes for.; Saturday, July 21, 2007 10:47:00 AM
Anonymous said...: Doh! the sale is Sunday 1:00 at the Radisson. I suppose I'll be there. My property is 339- pretty far down the list. The rest is pretty much crap.; Saturday, July 21, 2007 11:09:00 AM
Perfect Storm said...: Housing tracker had a good size increase this week and flippers in trouble increased by 5%.

Housing/Mortgage Doom 2007.

Were right on track for a 50% decline by 2009.; Saturday, July 21, 2007 3:05:00 PM
G Spot1 said...: My family would like to rent a house in the Roseville/Granite Bay are - decided to sit out the market for awhile. Any suggestions on where to find listings? Many thanks!!; Saturday, July 21, 2007 4:35:00 PM
anoop said...: For rentals try
sacramento.craigslist.org.
There's plenty.; Saturday, July 21, 2007 5:10:00 PM
Cmyst said...: Hey, g

Go to Buying Time's blog, Average Buyer, at http://averagebuyer.blogspot.com/

She has the web pages for most of the property management sites posted on the right hand, down a ways.
Homepointe has pictures of most of theirs, and you can sort them by type (house, apt.) or by city. And they do have Roseville.; Saturday, July 21, 2007 7:34:00 PM
Anonymous said...: Back from the auction. Prices weren't bad at first then towards the end of the day, it was all kinds of stupid. I don't know what was funnier, the people around me laughing at some of the bids or the organ monkey up front.

Anyone else go besides Average Buyer and I?; Sunday, July 22, 2007 6:05:00 PM
Cmyst said...: People were laughing? Wow.; Sunday, July 22, 2007 7:28:00 PM
Anonymous said...: Well I almost bid on a house (339) but decided against and sure enough it went for 250K.

MLS70056020
Sale History
03/26/2007: $369,879
07/21/2004: $349,100
11/19/2002: $259,500

Hello 2002 price >; )

Now the question is, did it really sell for 250K?; Sunday, July 22, 2007 7:56:00 PM
Buying Time said...: Gwynster -

I actually bailed on the auction. After reading the fine print on some of the materials and taking a closer look at some of the houses, hubby and I figured it was a waste of time (it was also in the middle of nap time =); Sunday, July 22, 2007 8:27:00 PM
norcaljeff said...: Lander -
did a loop around Hilltop Loop again today, seems like even more empty homes. Saw lots of that phoney winder covering to prevent the appearance of empty homes but the newspapers and thick build up of pizza ads kinda throws their game off. I did see a brand new one that's already a repo, looks like the buyer didn't even make the first payment. I'll send pics later.; Sunday, July 22, 2007 11:05:00 PM
anoop said...: One would never think we were at 2002 prices looking at Westpark Roseville!; Sunday, July 22, 2007 11:07:00 PM
anoop said...: By the way, the condo I was looking at looks like it sold. Don't know what price they got - owners were asking 255K, I had bit 200K. The listing's gone inactive and according to the agent I'm working with, that's probably because it was sold.; Sunday, July 22, 2007 11:21:00 PM
Anonymous said...: Here is what I saw at the auction

Property 322
Seller Code WAMU-FNAMS
Seller Number 696643915
Street 8531 Hermitage Way
Location Sacramento, California, 95823
Beds 4 Baths 3 Sq. Ft. 1692

Guy standing next to me was bidding. We're against the wall with doors and his competition was way across the room. Closed at 232k to mystery bidder. Within seconds the auction staff come to him to tell him that the winner backed out and he could have it for his last bid. He eventually gets the house for $202.5K.

Frankly, none of those homes are sold until the title is recorded. Then we'll see the real price.

I did talk to several people there including CNBC staffers. Most people were looking to buy homes to live in. What impressed me about what I found was that if a house went high, they stayed out of the bidding.

The couple of RE investors I talked to mentioned that rent multipliers were off. They only bid on the bargin basement homes in Rio Linda, South Sac, etc.

I did find one flipper. The guy was looking to buy a house down the street from him in Colfax that had a bunch of unpermitted work done so he could flip it. Why flip in this market? He needs something to do for the next 2 yrs. I did mention he could work but he just laughed. So yes folks we do still have some idiots out there.; Monday, July 23, 2007 7:20:00 AM
Cmyst said...: I wonder how soon we can find out if the place Gwynster was looking at did actually sell for 250K.

And PR, I've been tracking several homes that go on and off of MLS. Agentbubble looked a couple that went inactive up recently, and said that they had listed as sold, but since one in particular had been for sale for six months or so at the same price, I wonder sometimes.
They don't list as being sold if the bank buys them, do they?; Monday, July 23, 2007 7:22:00 AM
Cmyst said...: Another work week begins.
My job is such that there are huge opportunities for small talk. Since it has to be very non-confrontational small talk, one must be discreet. However, in the last year, I have gone from a conversation about the Sacramento housing market about once a month to at least once a day and some days every single person I see talks about it.
Most of the people who voice an opinion believe that Sacramento prices got crazy high and they're relieved that things might return to normal. Some of them, usually people trying to sell a home, think otherwise. I often tell people that I sold my condo and am renting, because I can't afford to buy even though I would like to and I have good credit. Sometimes, I see the lightbulb go on, because most people believe that my profession makes a very decent wage (and they'd be correct).
So, as the work week begins, I just wanted to start on a positive. That this time around, we have an entire network of information that has not been available to the average person in other bubbles. And that each of us is out there doing this same thing, engaging other people in these conversations, doing our part to bring sanity back to the housing market.
Have a great week!; Monday, July 23, 2007 8:12:00 AM
Anonymous said...: ok this made my day

$230000 Condominium in Davis (forclosure soon)
This is a steal, must sell by 8/7/07 CALL 707-567-2983
http://sacramento.craigslist.org/rfs/379289820.html; Monday, July 23, 2007 1:41:00 PM
newtocal said...: Hello! I moved to the Sacramento area this summer and have been reading this blog for about the last six months. I want to thank you for all the great information as it swayed me to not buy a house and I am now a patient renter. Keep up the great work!; Monday, July 23, 2007 6:11:00 PM
landwhore said...: One item about the auction that I have not seen mentioned is that they are already scheduled to come back at "least one more time in November". I wonder how far prices will drop by then?; Tuesday, July 24, 2007 4:43:00 PM
Anonymous said...: Realllllly? I missed that.

Most of the properties I saw going were WAMU. I didn't see any other big holding firms listed on the sheets. Now that Sacramento is going to start aggressively fining vacant houses, the REOs may get reasonable. The holding costs are going to be too large.

Anyways, Novemeber is good timing for me >; ); Tuesday, July 24, 2007 5:54:00 PM
David said...: I'm really noticing some breakthrough downward movement in prices these last several weeks. Things had been stagnating in the lower-end market in the northeast country, which is where I am keeping an eye on things. It's good to see prices starting to move more toward a stable equilibrium. I, of course, will be waiting longer for better opportunities that are sure to emerge.; Saturday, July 28, 2007 7:50:00 PM
David said...: This comment has been removed by the author.; Saturday, July 28, 2007 7:52:00 PM
lexi said...: newtocall:Hello! I moved to the Sacramento area this summer and have been reading this blog for about the last six months. I want to thank you for all the great information as it swayed me to not buy a house and I am now a patient renter. Keep up the great work!"

I also want to say thanks... if it
wasn't for this blog and others I would of fallen for the "buy now or
be priced out forever". Thankfully, common sense and this
blog stopped me from making a big
mistake. Either I would of been
a mortgage slave or my home would
of ended up a foreclosure. Either
way I would of been in bad shape.
So thanks!; Sunday, July 29, 2007 7:33:00 AM
HOUSE2008 said...: Thank you all for the insights & comments. An intelligent blog.

Question...?
Just fustrated that here between my fiance & I, we're earning close to 110k & can't even qualify for a 380k home? Am I to assume that alll those people living in those homes (KB-Natomas) are bringing in 10-15k a month? How are these homes being sold? Financed? Well, as my sig say's I'm hopefully will be able to move into a home by 08.; Monday, July 30, 2007 4:00:00 PM
Anonymous said...: nope

Those are mstly people who got in with low teaser rates. Some people are now are trying to rent these monsters out for 1/2 to 2/3 the carrying costs. Anything to keep from foreclosing.

Others are moving their entire extended families in. An aquaintence has a large - and I mean L A R G E east indian family next door to him now. He says the food smells drift over to his home constantly and now he's always hungry but the worst part is that there are always 3 or more cabs parked in the street.; Monday, July 30, 2007 5:23:00 PM
David said...: Anyone have any insights into the condo market. I median condo price has gone down considerably more than 15%. What do you think is going to happen in the short term. There are an awful lot of condos for sale right now, and many are foreclosures/short sales. One on Peppermill in 95841 is listed at 130 - it sold for 195 in 5/2006 and sold for 85 in 5/2001. Such a crazy, almost unheard of fluctuation in price. Speculation is terrible! I want a condo! But should I still be waiting?; Tuesday, July 31, 2007 9:21:00 AM
HOUSE2008 said...: Gwynster..
"but the worst part is that there are always 3 or more cabs parked in the street"
HAHAHAHHA!! That's funny..

Again your correct about the teaser rates. I called a KB lender & asked how people wer're getting into the Hamptons homes @ 350k-400k plus at a pop. He told me that the people are almost "demanding" that they somehow get into them. Here's the kicker. He's using an 80/20 loan (7yr no %) for many of them (around 80%) thus exposing the h/o to 50-60% of their income towards the cost of their house on a monthly basis. 50-60%! The mortgage companies look at your gross. Well I don't live off my gross. But the sad part is I can't even get into those homes w/o sacraficing 50-60% of our combined income towards a house. That's on a 7yr no % loan! What kinda "life" is that? This is making 5k free & clear. I "get it" but can't believe people are doing this to themselves....; Tuesday, July 31, 2007 1:37:00 PM
Anonymous said...: Did I see that right? 0% as in pure principle for 7 yrs then the interest due 2x6 hits them over the head in year 8?; Tuesday, July 31, 2007 3:00:00 PM
Anonymous said...: I'll post this here since it's not directly housing related but may be a sad fatality of the slowing economy

No More Krispy Kreme In The Sacramento Area
http://tinyurl.com/yphv5n; Tuesday, July 31, 2007 3:06:00 PM
norcaljeff said...: A Classic story for 2007, a realtor owned home is now a short sale. http://tinyurl.com/26zw84; Tuesday, July 31, 2007 5:47:00 PM
norcaljeff said...: Housein2008-Just hang in there. So what if everyone else is buying a home, they will still inflate this market when it should be falling. I too see this behavior with the new home builders because they self finance and they have a vested interest in moving homes. This just shows the bubble will last longer than previously thought. I mean why would you want to buy in this kind of market, with all this BAD news and people are still killing themselves to get into an overpriced home. Don't let them take you down with them.; Tuesday, July 31, 2007 5:52:00 PM
norcaljeff said...: Check out this clip from Jim Cramer about real estate, including the Sacto area.
http://tinyurl.com/ypksza; Wednesday, August 01, 2007 10:08:00 AM
Anonymous said...: That clip gots lots of exposure in the HBB site and knew he had bad things to say about the IE but I didn't know he mentioned Sacramento specially.

Nice find. So much for goldilocks; Wednesday, August 01, 2007 10:31:00 AM

Friday, July 27, 2007

Sacramento Real Estate Market - July 2007 Water Cooler

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