Monday, August 27, 2007

CAR Report July 2007

From the Sacramento Business Journal (hat tip Jeff):

Home sales in the Sacramento area dropped 10.2 percent in July from June and are down 23.7 percent from a year ago, according to an industry group's report on Monday....The median price of a detached, single-family home sold in Greater Sacramento last month was $346,220 -- 1.5 percent less than in June and 8.4 percent less than a year ago.
Change from peak: -12.2%

18 comments:

Diggin Deeper said...

It looks like about a 1% drop in prices per month since the beginning of the year. Been pretty orderly up to this point. Got to believe the hammer's coming down on the seller as we move into '08 and I wouldn't be surprized to see this percentage double on a monthly basis as we head into the 1st Qtr of '08. Could be way off, but we haven't really seen the full impact of this market's problems, and we're heading into the soft selling months ahead.

Gwynster said...

Bahahahaha
Check the Davis #. If the CAR says so, it must be true. Right Sippin?

Gwynster said...

Opps forgot to add
http://www.car.org/index.php?id=Mzc2MzQ=

Cmyst said...

But Gwyn, that doesn't count because the data set is not the same now. They include the rural areas, or something, and that throws it off. I'm sure that's what Sippn' said the last time you gloated about this.

Gwynster said...

**bangs her head on the desk**

In 7-1-06, 95616 was split so that part of it became 95618. For the months between July 06 to June 07, the inventory data was messed up YoY because you had homes for sale that moved to a new zip during that period.

July is the first time since that split that we actually have YoY figures accounting for the same area.

Sippin heard us bashing the inventory decline that made the Sac Bee so now he wants to apply that 1 yr divergance to everything.

fishtaco said...

Gwynster,

Davis hit the highest during the boom and thus has the farthest to drop. Once folks couldn't sell their overpriced bay area homes the Davis market for overpriced homes died.

Perhaps we should get a collection together and buy some ad space in the Davis Enterprise Friday real estate section. Put that number in it with a message to the Davis RE agent cartel that they need to stop listing remodeled 3/2 for 774,000.

mopar777 said...

A family my wife knows here in Folsom took advantage of all the cheap money back in '05 to upgrade from a 3&1 tract home to a 5&3 custom in the Los Cerros part of town. The husband drives a garbage truck and the wife is perpetually unhappy. Eighteen months later they walked away from the house because the loan blew up in their faces.
But wait! The bank contacted them in the apartment and said they wanted to rewrite the loan so they could stay in the house. Now they are back in the place with a fixed rate loan and $126k subtracted from the balance. Sure they will have to pay income tax on the forgiven debt, but the lender figured it was better to gift them all that money!

I remember predicting this to a mortgage loan shark in the steamroom at the health club last October - that the lenders will be rewriting some of the loans to avoid dealing with foreclosure. He assured me I was dead wrong.

Sippn said...

sory G got the year wrong.


mopar- garbage mans got the steady highest paying job.

Gwynster said...

Milk and cookies keeping you up? Normally you're a pretty bright boy and don't try to yank my chain.

Nope my year is not off. This split happened while I was still running the off campus research center and we were affected by the change. This was a year ago.

http://daviswiki.org/ZIP_Codes

http://www.city.davis.ca.us/topic/zipcode.cfm

norcaljeff said...

Public employees seem to get all the breaks. So not only are we paying for his pension, we can now pay for his stupid decision to buy an overpriced home while spending equity for several years that now doesn't exist. Nice country.

Sippn said...

my bad (kids back in school - notice my language advance - momma doing the Snoopy dance)

RMB said...

mopar777

So next April when they have to cough up 50K to the govt, where are they going to come up with the money?

I kind of think the people you mentioned are going to be perpetually in trouble and every year something is going to put them over the edge. Eventually the bank will own the property.

As far as this being standard practice. For now banks will deal, but when they jingle loans start to pile up, how will they be able to bargain. These write off effect their bottom line and only forestall the inevitable, they don't alleviate it.

anon1137 said...

But the statewide median price was up 3.2% yoy and the Bay Area median price was up 6.9% yoy according to CAR, which is amazing to me.

I think that must have something to do with that jobs/income report last week that someone was mentioning where there are many jobs being created at the very top and bottom of the wage scale but few in the middle. Homes sales at the high end keep pushing the median up.

Diggin Deeper said...

Home Prices Skid 3.2% And May Decline Further

http://www.cnbc.com/id/20475524

We seem to be right in line with the price declines noted in this article. If there's a bottom to this market it still appears months off. Consumer confidence now reported to be the lowest in a year.

The National Association of Business Economics (NABE) reported yesterday that "credit risks have now supplanted terrorism as the primary risk to the economy."

No way CAR, NAR, or SAR has any spin impact left. As sentiment continues to deteriorate prices can't be far behind. We have yet to see the panic phase, as is so common in markets like this one. Maybe it won't occur as people quietly give up and hand the keys to the bank. I kind of doubt it because severe pain overcomes pragmatic decisions most of the time. The coming months will tell.

Cmyst said...

I bet the garbage collector and his wife know nothing about their tax liability. My ex owed 50K to the IRS when I married him (I was unawares) and we spent a very memorable few years paying it off, including several months living in a warehouse without hot running water and using an outhouse as a bathroom. And this with 4 kids. I actually called the state to be sure we wouldn't be charged with child abuse or neglect. I was told that so long as the kids were clean, fed and went to school there was nothing at all wrong with the scenario.
It was the main reason we decided to stay in Illinois when an emergency called me back there. At least in Illinois, our house payment was only $145 month and we had hot water. In Cali, our "rent" on that warehouse was twice that.
The IRS don't play.

Patient Renter said...

"The IRS don't play."

You mean you didn't call one of those tax lawyers that advertise midday between episodes of Judge Judy? hehe. Glad you're out from under all of that nowadays.

tough guy said...

Is the reduction in value realized at reduction or when the loan matures?

Smart strategy by the bank- pass the buck on lost $$$ to the Gov, they probably know the FBs will be pinched by the tax burden and won't be able to pay their mortgage, but in the meantime, they've collected some monthly payments, and when the FBs finally get evicted, the bank can readjust the price of the REO which will be sometime in the future (when things MAY get better, but probably won't).

Cmyst said...

My ex's sister was married to a guy that owned a contracting business about 15 years ago. They had a McMansion before McMansions were cool. I remember his 3 car garage that he kept his Porshe in, that he had insisted on paying full price for - he wanted to be able to brag on how much he paid for it, not how much he'd saved on it. Turns out, he had not been paying his income tax. Lost everything, including his business, which he'd inherited from his father. The sis-in-law left him for other reasons just prior to this, and ended up supporting herself and their child on her hairstylist earnings. I remember helping her move into a small 2 bedroom rental(with a MUCH bigger yard and the house came with a chicken coop and some chickens, LOL) that you could have fit the whole house into her living room from the McMansion.