Thursday, August 16, 2007

'If it's a buyer's market, who's buying?'

From the Sacramento Bee:

It was two years ago this month that some housing experts began seeing the first signs that the Sacramento region's housing boom had begun to peak. "The bell has tolled," said Lyon Real Estate owner Mike Lyon in August 2005, declaring that the era of skyrocketing home values and sales may have hit its high-water mark. Ever since, the ride for Sacramento's housing market has been bumpy and it got no better last month....Lyon today believes "this real estate market is going to be lackluster until around the end of 2009."
...
Sacramento, Placer and Solano counties in July showed some of the state's biggest year-over-year median sales price declines. Prices fell a record 10 percent from last year in Sacramento County, 8.5 percent in Placer County and 9.8 percent in Solano County.
...
July 2007 ended with a record inventory of 15,927 houses for sale in El Dorado, Placer, Sacramento and Yolo counties, reported the Sacramento property research firm TrendGraphix.
...
Rocklin real estate agent Maxine Sunada toured a client through existing homes on Alder Creek Court in Lincoln. There, six of the street's 18 houses -- built in 2004 and originally priced in the $500,000s -- were for sale. Many had dead lawns and two bore signs saying "bank repo."
DataQuick stats by county
DataQuick stats by zip code

From the News10 (also video):
The last thing the sagging real estate industry needs is would-be homebuyers who can't get a loan. The subprime mortgage meltdown is now spreading to other sectors of the market, including buyers with solid credit.
...
Try telling prospective homebuyer Brandon Robinson it's a buyer's market. "Who's buying? If it's a buyer's market, who's buying?" he wants to know. Robinson was in contract to buy a bank-owned triplex in downtown Sacramento and planned to live in one of the units. But even with a 10 percent cash down payment and a solid credit score he could not find a lender.
...
"No, this is not an isolated story," said real estate agent Michael Long who lost three solid deals in a single week because the buyers couldn't get financing. "Of all the things to happen, that would be the worst thing to happen for our market in Sacramento...."
Meanwhile, the Sacramento housing market makes another Forbes list, this time as the 3rd "worst" housing market in the country. Recently Forbes rated Sacramento as the 3rd riskiest and 6th least affordable housing market in the nation.

From the Stockton Record:
Washington Mutual has put its downtown Stockton building up for sale...The Seattle-based company said the move to try to sell the property isn't a reflection of the decline in the residential real-estate market. A sale would generate capital for the company, said Washington Mutual spokesman Tim McGarry.
From the Union Tribune:
Selling a home in Nevada County takes more than twice as long as it did two years ago, forcing many real estate agents to look for second jobs as the statewide market slows to the lowest level in 12 years..."What used to take 90 days is now taking 210 days to sell," said Teresa Dietrich-Treco, a Realtor from ERA Cornerstone Realty Group in Nevada County.
...
Since January, 538 homes have sold through the MLS in Nevada County. That's about half the sales of a few years ago, Dietrich-Treco said. "It's really having a huge impact on Realtors. A lot of people are getting second jobs," Dietrich-Treco said.
From the Modesto Bee (via the Merced Sun-Star):
[Stanislaus County Assessor Doug] Harms said home value declines are widespread. "If you bought your house within the last three years, it's probably worth less today," said Harms, whose office is busy reassessing home values to potentially lower property taxes for thousands of homeowners.
...
"We'll probably review every property that (sold) after July 2003," Harms said. "Some people are thrilled when we tell them they're getting a lower property tax bill, but I'm thinking, 'Hey, they just lost $50,000 in the value of their home.'"
...
"Inventory is continuing to go up, but buyers are kind of waiting for prices to hit a bottom," Christiansen said. More than location or condition or anything else, Christiansen said what motivates buyers are low prices.

But home prices still aren't low enough to be affordable for most northern San Joaquin Valley families, according to Darryl Rutherford, a researcher for the California Coalition for Rural Housing. Considering Stanislaus County's median-income family earns about $54,000 a year, Rutherford said median home prices would have to drop to about $185,000 to be affordable.
...
"For society as a whole, we would be better off if home prices went down further," said Rutherford, though he acknowledged such declines could be financially disastrous for individual homeowners.

19 comments:

Diggin Deeper said...

"For society as a whole, we would be better off if home prices went down further," said Rutherford, though he acknowledged such declines could be financially disastrous for individual homeowners."

Kind of the same bind the Fed's in right now. Damned if you do, damned if you don't. Do nothing and suffer the consequences.

As of today the Fed has injected over $85 Billion into the credit markets over the last week. This is more money than was pumped into the finacials after the 9/11 national crisis. And still the markets are roiling worldwide.

RE Buyer sentiment is low and with all the turmoil, who would think it would get better anytime soon?

SacramentoCrash said...

The Fed is pumping Billions into the credit markets.

The war in Iraq has cost how much?

The trade deficit with China is how much?

The state and federal governments are running on fumes?

And the market will stabilize in 2009?

Janell said...

I have to take issue with the headline of this post.....

'If it's a buyer's market, who's buying?'

How clueless a comment can you make? It's a buyers market precisely because there are no buyers.

If there were lots of buyers it would be a sellers market.

Two coworkers bought in the last couple months, and another just sent out an offer and I'm in escrow.

There are a couple of buyers for you.

Sippn said...

Brutal sales stats - I could tell it was gonna be bad. Friend escrow officer had 20-30 deals dissapear at July end with the AHM closure.

Nothing wrong with the deals, buyers, etc, - just the lender closing.

Diggin Deeper said...

Janell...then hopefully you and your friends stole these homes from the buyers, put a big chunk down, and financed with 30yr or better fixed rate financing.

With the horror stories floating around, there's not a person out there that shouldn't know the drill by now.

norcaljeff said...

Man, this is getting good. I didn't think it could get this bad, but it's going faster and farther than I thought. Where are those BULLS from yesterday? Everyone was talking "well I'm buying now if Cramer says to sell." Bulls, where are you???

Sippin, you just kept spinning the bad news to good, now you're saying "I could tell it was going to be this bad." I call BS, you've done nothing but hedge your comments and point to the "good" news.

Janell, even heard of sarcasm? :)

Gwynster said...

Jeff,

Dude, we're allies here. I'd hardly call me or Crispy bulls. Our sense of humor regarding Cramer is a little maudlin. Today he was telling everyone not to sell CFC.

He just signed CFC's death warrant >; )

Poof said...

Is this the same Michael Lyon who said last year that house prices would go up 10% in 2007, and then reversed his course earlier this year saying they would only go down 10%? Prices are doing down another 30% IMHO. Someone should check his prior 12 month comments.I think he's trying to do a CHA and rewrite history by stating he called this meltdown 2 years ago. That's total BS. He didn't have a clue then and doesn't now and no one should listen to him. This housing/credit meltdown isn't going to recover for at least 5 years. Why should it?

norcaljeff said...

Gwynster, I hear ya. Just thought it was crazy how you all turned on Cramer and were sounding bullish on RE. And yea, he might say buy or stop seling CFC b/c he doesn't want his viewers to get caught upside down in a market bounce. Look at Thornburg and Beazer, they book took it on the chin and then corrected back to the upside. But if you watch CNBC, I think Fast Money is intersting, that options guy has been right on, and is still saying that CFC is going to trade to the downside with all the put action.

paranoid renter said...

Bummer...have to wait another 2 years before I can buy. By then all the desireable areas will be built up. I'll get a good deal but it'll be in a used home.

paranoid renter said...

Janell,

Were you able to get a below-market price?

norcaljeff said...

PR, I feel your pain.

SacramentoCrash said...

Lyon is a broker not an economist.

Bakersfield Bubble said...

Easy Jeff.

I have been blogging on this for over 2 years. GROWLLLLLL. I am one of the biggest BEARS out there. I was just making a point about Cramer and Cocaine-Kudlow.

LOL

(Crispy)

Bakersfield Bubble said...

Gywnster-

I can't believe we were called bulls. I am actually offended. LOL

Bakersfield Bubble said...

Sippin-

GMAFB.

You have aruged the opposite point for so long. I think the Bush Admin needs a new Chief of Staff, the last spin dr left

norcaljeff said...

Homes in Lincoln starting at $1.3M; these guys gotta be smoking the same stuff Sippin's smoking.
http://tinyurl.com/36m74c

Janell said...

Diggin Deeper,

yeah wearn't silly to think that buying this house is for a short term investment.

although we are buying the house at a very low price we fully expect the value to decrease below what we are paying for it. but we don't plan on selling sooner then ten years even if then.

I've just really enjoyed shopping in this market as a buyer because every seller is desperate. It's great to have a upper hand and not feel rushed.

this whole mortgage fiasco is a bit crazy though!

Jennifer said...

Hi fellow renters! We are looking for a nicer place to rent. Besides Craigslist, any other local websites or companies you all recommend?