"A New Hit" on the Sacramento Housing Market

From the Sacramento Bee:

...[H]omebuyers are also finding fewer loan products available to finance their buys, say Sacramento-area lenders. They claim widespread investor concern over the rising risks of loan defaults and foreclosures is shrinking the pool of money for home loans. "There's a lot of product this week that's been taken off the shelf," said Brent Wilson, mortgage strategist with Sacramento-based Comstock Mortgage.

No one is sure how long this surge of credit tightening will continue. But it signals a new hit on a Sacramento-area housing market already coping with rising defaults, slow sales, excess supply and downward price pressure in many neighborhoods.

Also from The Bee:

All over the capital region, home builders are trying smaller lots and shaving extras to bring down prices. But some El Dorado Hills architects are unveiling the ultimate, a return to something not seen here in years. It's the $150,000 house. This is not as far-fetched as you might think. Prices for new small-lot houses already are dipping to $230,000 in parts of the region.
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[B]ased on what we know to be true on sales of homes now, $150,000 is very achievable," says Kerrin West...West believes "the market for this is huge." "We've got so many folks priced out of the market," she says. "Also, on the flip side, people are making too much money to qualify for low-income housing." Should builders eventually sign on, these could be the first $150,000 new houses seen in the region since the earliest days of a housing boom that began to take shape in 2000.

From CNN Money:

...[M]otivated sellers may have to slash prices to move properties. Already, in Sacramento, 48 percent of sellers have discounted from their original listing price. Some 47 percent of Orange County, California sellers have dropped their price and more than 45 percent of sellers in both Boston and Phoenix have done the same.

From Bloomberg:

The 9,000 unsold houses sitting empty in Northern California's Sacramento and Yolo counties aren't just a headache for owners: They're a threat to public health. The danger is in their yards, where deserted swimming pools, spas and ponds provide prime breeding grounds for mosquitoes. That heightens the risk of West Nile virus....

About 1,200 of the empty houses are known to have swimming pools, said Greg Vlasek, director of government relations for the Sacramento Association of Realtors.
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Real-estate agents are being drafted to help combat the spread of the sometimes fatal virus. Health officials asked agents to report vacant residences with standing water, in what the National Association of Realtors says is an effort unique to the Sacramento area.
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More than 1,000 homes have been reported since the program began in May, Brown said. The average time a single-family home sits on the market in Sacramento was 52 days at the end of June, according to the Sacramento Association of Realtors. The selling time tripled in the past three years.