Thursday, August 23, 2007

"Dismal State of the Housing Market"

From the Central Valley Business Times:

Despite foreclosure rates that are among the highest in the nation, parts of the Central Valley have some of the least affordable housing in all 50 states, according to a report Thursday from the California Building Industry Association...Virtually every metropolitan area in the Central Valley is among the nation’s 30 least affordable areas, says the report.

Merced, which was ranked third in the nation this week by RealtyTrac for its rate of foreclosures, has just 3.8 percent of its housing priced so a family with the median income in Merced could afford to buy it, says the CBIA. That puts Merced as the third least affordable place in the country, exceeded only by Salinas, in second, and the Los Angeles-Long Beach metro area in first place, according to the quarterly report compiled for CBIA by the National Association of Home Builders and Wells Fargo.

Modesto, with only 7 percent of its housing “affordable” for the median income, is ranked tenth on the CBIA list. On RealtyTrac’s foreclosure list, it’s ranked fourth.

Other Central Valley metro areas and where they rank on the affordability index, with the foreclosure ranking in parentheses, are:

Stockton, which is 15 from the bottom in terms of affordability, is second in the nation in terms of its foreclosure rate in July.

Sacramento, the only other Central Valley metro area to be in the nation’s top ten foreclosure cities (it was 9th), is ranked 25th least affordable market in the country.
From the Nevada Appeal:
Median real estate prices in Nevada County dropped more than 9 percent to $425,000 in July compared to a year earlier, a real-estate tracking company has confirmed...“Things just aren’t worth as much as they used to be,” said Teresa Dietrich-Treco, a Realtor from ERA Cornerstone Realty Group, with offices throughout the county.
From the Merced Sun-Star:
A local real estate agent drove a stake into the heart of a controversial housing project Wednesday morning, ending its long fight for survival. For sale signs advertising the infamous 379 acres where Atwater Ranch was once set to prosper were pounded into the ground Wednesday morning....Atwater Ranch would have added an estimated 4,500 residents to the south end of Atwater....

Florsheim Land Co. spokesman Brian Lange confirmed that the project has been abandoned, based on the real estate market's flatlining. "There really is no indication of short-term improvement," he said. "It's very hard to gauge where we'll be a year from now."
News of the project's demise was mixed in Atwater. Some weren't surprised, given the dismal state of the housing market, while others were saddened that the development has disappeared...Mayor Pro Tem Lesa Rasmussen said she thought the real estate market had been the cause of the project's demise.


TwoWheelsBetter said...

“Things just aren’t worth as much as they used to be,”

Now THAT's a money quote.

Jacob said...

No, things are still worth what the used to be, adjusted for inflation. They just never were worth what people speculated they would be.

Gwynster said...

I have to share this!

From the Sac Bee comments section on the mortgage bailouts

You've got it wrong!
"Yes... we purchased our home with 100% financing because they wouldn't take a contingency contract. When our first home sold, we put in a pool. Our loan broker sold us into a 2 yr/ARM assuring us that we could refinance in 2 yrs. Little could we have known that the market would drop SO dramatically and that we would lose $150K in negative equity! Our credit is CLEAN but because the house is worth less than what we owe, there aren't any options. The first increase is in January and it is speculated to be $1,600/month!!!! In 6 months, it will $1,300 more!!!! I CAN give up my cell phone, satellite TV, newspaper.... and many, many, many other things... but let me tell you something, it doesn't add up to $2,900... (not even CLOSE!) Even at my $180K/year salary, I can't afford this price hike & pay my childcare. I'm surprised that more people aren't sensitive to those details. My home, unfortunately, has turned out to be a horrible investment, that at this juncture, must be dropped."

Did I see that right? 180k salary and his reset to 2900 mo is going to bankrupt him?

Jacob said...

Well at 180k he makes $15000 per month, I wonder how many kids he has to pay for.

Anyone who gets a loan and 1) doesnt know what the real payment is, or 2) knows but thinks they can refinance later when the home appreciates 50% per year is insane.


dvobell said...

"Even at my $180K/year salary, I can't afford this price hike & pay my childcare. I'm surprised that more people aren't sensitive to those details. My home, unfortunately, has turned out to be a horrible investment, that at this juncture, must be dropped."

OMG that is so frustrating.
$180k/yr? He is a RICH PERSON. Hello? Rich? Even by Cali Standards...
$2900 rise from the reset? That means even though he's rich, he STILL bought way more house than he could afford.

And now his 'investment' 'must be dropped'...

That means another Jingle Mail that breaks another camel's back. And another CDO tranche swindle crumbles to the sea. We all suffer -- my KIDS suffer -- because he just had to have his fricking pool.

I (yes, cruelly) hope the forgiven debt tax bill for the short sale on his place is stupendously huge. If he can't get his Sh*t together making $180k -- I have to assume he never will.

Gwynster said...

It's a wonder how these masters of the universe walk upright and cut their own meat isn't it?

nicole said...

reread that and took it to mean
an increase of 2900 on top of whatever he was paying originally.
If he had a 150k equity drop he must of bought a very expensive home... 1 mil plus? and had a hefty
payment to begin with and now can't
afford the additional 2900? That's
how I took it anyway... of course
that means he overbought which brings me to the point that all area's will be effected... even the
pr iciest neighborhoods.

norcaljeff said...

Drop the kids, lol j/k
I wanna work where this guy does, guess they even pay stupid people $180K/yr. I'm hoping it's not a financial job.

Cmyst said...

That's what I figured, too, Nicole: if this person lost 150K equity, I'm guessing they bought a house close to a million. Even at 180K a year (which in Cali isn't rich, but it is certainly pretty damn well off) they should have limited themselves to a home less than 600K. Of course, when their first home sold they probably had a lot of equity. It couldn't have ALL gone to a pool. But evidently they blew through that, too.
People are stupid.

RMB said...

I'm betting this guy is an aide to some political hack downtown. You can rest assured he will be pushing for a bailout.

Just keep paying taxes everyone....there is nothing to see here.

Gwynster said...

Or someone in the local RE industry. 75'is too young.

He went on to bad mouth everyone that commented on his comment and bragged about his worth and financial savvy. Really shows how young he is. People like that getting foreclosed on just feels good.