Tuesday, August 14, 2007

20% Price Declines and Other Data Goodies

  • As of June, the average asking price in Sacramento County dropped 20% since its peak in May 2005, according to TrendGraphix data available at golyon.com.
  • The Housing Tracker website now has two years of asking price and inventory data. As of today, the median asking price for homes in the Sacramento region has declined 17.1% since August 14, 2005. Inventory has increased 109% over the last two years.
  • Zillow recently released their second quarter Zindex statistics. According to Zillow, Sacramento area home values have decreased 8.2% over the past year. This time around, Zillow has included a breakdown of values by home size, but has purged the historical data.
  • The Sacramento area is one of 25 metro areas being tracked by Radar Logic's price per square foot index. The daily index is available here [pdf] (hat tip Jon Lansner). Historical charts back to 2000 can be viewed here. The transaction count chart at the bottom of the page is also worth a look.

18 comments:

Gwynster said...

This will give you shivers, from Bloomberg

Countrywide Cut by Merrill; Bankruptcy Seen Possible (Update2)
http://tinyurl.com/2fl9v8


Aug. 15 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, was downgraded to ``sell'' by Merrill Lynch & Co., which raised the possibility of bankruptcy if the company loses access to short-term financing.

``We cannot understate the importance of liquidity,'' Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today. ``Effective insolvency'' would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, he wrote."

So CFC can't mark to market because it would cause them to go BK. How much is CFC holding back in the 4 county area? It's huge.

Diggin Deeper said...

Can't rule out Beazer going under either. Rumors are swirling the street that they're next. CFC going down...hard to imagine when the CEO was so upbeat last quarter. Nothing is as it appears in the money centers right now. All the talk about "containment" was just wishful thinking. The world is being flooded with dollars in order to calm the big financials. This ought do a number on the dollar and fuel inflation in the near term.

It's all setting up to be a bad dream...

Mike said...

"The world is being flooded with dollars in order to calm the big financials. This ought do a number on the dollar and fuel inflation in the near term."

So I foresaw this housing/credit turmoil coming and sold my house couple years ago. Now I am holding good amount of cash in bank from the profit I made.

However, with dollars being flooded in the market to contain the credit crisis, my cash money in the bank is being devalued everyday. Eitherway, it looks like I am getting screwed by the housng bubble crises even though I was smart enough to predict the current situation.

Gwynster said...

Mike,

Welcome to our world though I didn't sell, I was just smart enough not to buy during the madness.

I've pulled everything I have into staggered CDs and US Treasuries for anything I can't liquidate like the 401K. Remember to check on the bank rating before socking the money way and FDIC ins only goes to 100k so spread them around.

The flooding of currency markets just tells me how nervous the powers that be are. It sucks that we get stuck with the bagage from other people's irresponsibility. In fact, it makes me more then a little pissed sometimes >; )

Diggin Deeper said...

Mike,

I did the same thing in selling out in the summer of '04. Cash is king right now, even if it has to be the dollar. Even you're bank is only safe up to the maximum $100K (?) FDIC insurance.

The Yen is performing against the dollar and Swiss franc should follow as the carry trade continues to unwind. Investors that participated in currency leverage are in a short squeeze right now and are unloading their positions.

There's no place to hide when the financial system grinds to a halt.

Jo Jo said...

wow you guy are really out on a limb... this guy at merrill is out of his noodle. CFC has ample reserves and their 6-month paper is yielding 6.25% if they have to pony up 8% they might, but thats good $$. Non-US investors will swoop in for that kind of return.

There is a lot of pull back for no reason, earnings and balance sheets have never looked better, no reason to get scared about lending, job market is tight and wages are still growing. The whole business is just silly

Gwynster said...

Jo jo,

you know this board has a surcharge for people who huff glue and post right?

norcaljeff said...

JoJo, that's all fine and good but if people and businesses can't get loans, how can they buy? We all know Americans are addicted and reliant on borrowing to live. And this just come out today from Reuters:

"Traders who have not seen any Countrywide paper change hands this week said under current conditions, the lender would have to offer up to 12.5 percent to obtain commercial paper funding -- nearly twice as expensive as a month ago."

Cmyst said...

You know where I'd be right now if I'd listened to Jo-Jo types 2 years ago? In foreclosure.
Instead, while I don't have to worry about that 100k limit on FDIC deposits, I have paid off all my credit cards and have a small profit off my condo set aside. I'll need more if I have to come up with 20% down, but what I have is infinitely better than being in debt AND in foreclosure.
My philosophy is prepare for the worst and hope for the best. I'm not crazy enough to believe that any bubblers are causing the credit crunch, and all the happy talk in the world doesn't change the price of milk, energy, and rocketing health care costs that aren't reflected in the government-sanctioned booming economy reports.
You guys have saved me a bundle!

norcaljeff said...

JoJo = Mortgage/stock broker
Sippin = Realtor and probably in mortgages too

Mike said...

Gwyn and DD,

Yes, I made sure the money I got from selling my house was put in each banks FDIC limit. I had some fun shorting home builder stocks (BZH,TOL,KBH,etc.) last year but did not have the courage to hold until this year where I really could have made some real money.

These days, majority of the money is in Short Term treasury bills.

However, I do hold some foreign currency holdings in case dollar tanks and some gold and silver mining stocks (althogh those seem to be getting hit these days).

This year, with stock market hitting all time high I figured it was time to pull all my retirement money (401K) out of the stock market as well. Now thats sitting in cash fund as well.

To some, I may be sound too bearish but I've been through the first housing bear market in early 90's and I've suffered through the stock crash of 2000 and I am not taking any chances this time. One thing I know for sure, more pain in housing market ahead.

Diggin Deeper said...
This comment has been removed by the author.
Diggin Deeper said...

Somebody's been watching to much CNBC. The economy is not as tuned up as everybody thinks.

Employment is a sham of low paying grunt jobs that would hardly allow a person with 3 of these jobs to buy real estate or any other durable purchase. The "birth/death" model keeps adding phantom jobs that won't derive one paycheck or income tax payment. It's another "quant" game that's marked to model rather than to the actual market.

Balance sheets and cash might look good but why isn't there more investment in new plant and equipment if corporate sentiment is so high? Why is corporate America holding back?

Sure, LBO's and private equity have fueled the market up to this point, but when a credit crunch hits, nobody can find any money to do these deals, and a lot of the financing of deals in progress are highly "leveraged". It isn't a question of "if" but rather "when" this leverage unwinds. Let's all hope private equity financiers used real money and assets instead of some of the crap that's floating around today.

Those that just believe what they're told get their due in the end.

Gwynster said...

For Jo jo,

CNNMoney
Countrywide turns to banks for help
http://tinyurl.com/2afxcf

"Leading mortgage lender tightens lending standards, turns to more expensive $11.5 billion line of credit to maintain liquidity; chairman cashing out of stock."

Yep, they sure are too big to fail, yep, yep yep....

Diggin Deeper said...

Worldcom and Enron were too big to fail.

Now KKR is the focus of liquidity problems. They're saying the same thing that CFC said a couple of months ago.

Cash is king.

norcaljeff said...

DD, you just contradicted your pro-stock/economy argument with last post.

Diggin Deeper said...

norcaljeff...I don't think so...I'm not in either of those camps and haven't been since posting on this blog. Please refer me to the post...

Diggin Deeper said...

Correction...I will buy stocks if they're in the right sectors but will stay clear in the present volatility situation.