Wednesday, August 15, 2007

Sacramento's Median Price Down 16.3% From Peak; Placer: -18.2%

The Sacramento Bee reports on DataQuick's July statistics for new & existing homes:

Sacramento-area home sales in July fell to their lowest level in 11 years while median sales prices also continued their downward drift, statistics released Wednesday show.
...
Placer County has now seen 15 consecutive months of year-over-year price declines. July's $430,000 median sales price for all homes in Placer is 18.2 percent below the county's Dec. 2005 peak of $525,000.

Sacramento County, likewise, has seen 14 consecutive months of year-over-year sales price declines. Its current $324,000 median sales price is down 16.3 percent from a peak of $387,000 in Aug. 2005, according to DataQuick.
From the Sacramento Business Journal:
Sacramento is the sixth least-affordable home market in the nation, joining a list of much-pricier cities including New York and San Francisco, according to a recent Forbes.com report. Affordability was based on the four-county region's median home price of $365,500 and the median household income of $63,750 --with only 13.4 percent of homes sold in the first quarter considered affordable for families earning the median income.
From the Sacramento Bee:
Remember the old days of down payments and fixed-rate loans? They're back. Troubled times in the nation's mortgage business are driving a back-to-basics movement for aspiring Sacramento-area homebuyers, say mortgage lenders, real estate agents and home builders. Fading away are the interest-only loans, payment-option loans and other novel mortgages that seeded the region's housing boom and made it easy to buy a house with no money down.
...
"I get 50 notices a day (from sources of mortgage funds) saying, 'We changed this. That program is no longer available. This has restrictions,' " said Jon Dobbel, Elk Grove branch manager for Gold River-based Summit Funding...
...
The bottom line: fewer buyers for an estimated 20,000 new and existing homes for sale in the capital region.
...
Interest-only loans: The only way you can get them now is by showing you can pay not only the interest but the full weight of the loan when principal is included later. Last year an estimated 28 percent of borrowers in El Dorado, Sacramento, Placer and Yolo counties used these loans to buy and refinance houses, says First American LoanPerformance.
From the SF Chronicle:
Mortgage woes have moved upstream, landing even in tony neighborhoods. The credit crunch now is hitting home buyers from all walks of life, not just subprime borrowers with poor credit. That in turn could mean fewer buyers - and lower prices.
From the Stockton Record:
Greg Paquin, president of the Gregory Group, a real estate information and consulting service in Folsom, said he isn't surprised that the metro areas of California hardest hit by foreclosures were in regions with the busiest building booms when the market was hot.

It's not the construction boom itself that set up those areas for high mortgage defaults, he said, but rather the number of investors who were buying homes for quick, high profits in a fast-rising market. "What we're finding out is that across California - Southern California included - there were greater numbers of investor buyers than we ever thought," Paquin said. When the housing market hit the wall, many of these investors found themselves unable to sell their houses at prices high enough to cover the debt incurred to buy.
...
"The foreclosures are going to get worse before they get better," he said.

55 comments:

smf said...

"What we're finding out is that across California there were greater numbers of investor buyers than we ever thought"

Have I not said this for a while now? These 'specuvestors' never meant to become landlords. They never meant to pay down a mortgage to create equity. All they had to do is hold the property, wait for appreciation, and sell at a profit.

As I stated before, demand was not driven by people looking for houses to live in, but by people purchasing them for 'investments'.

Hence, since the demand was not driven by actual demand, the price runup had no basis on actual conditions. Price WILL go back to their historical levels, and we are not there yet.

Cmyst said...

I was alerted by family that "my blog" is in the SNR. Turns out it is LANDER's blog in the SNR, which was quite a relief to me.
Check it out: http://tinyurl.com/2cydce

Gwynster said...

Big cudos to Lander for the shout out.

And Bite, if you read this, many of us have been getting the sorrowful, pity-filled looks for not buying during the insanity too. Now we look like financial masters of the world for being contrary enough to trust our common sense.

Welcome to our savvy, L33t club >; )

Sippn said...

SNR right on top of it - after WSJ, Bee, BJ...

Gwynster - I was actually thinking Optimus Prime.


FORBES (same article u quoted): "Unaffordability is also relative. Few residents of Sacramento, Calif., and Seattle can afford homes in the areas, but property there is still reasonable by regional standards."

Specuvestors - you forgot the part about the false loan application.

Gwynster said...

Sippin,

Normally I follow you but in this case the train they call "the Sophism of Non Sequitur" has left the station and apprently I didn't purchase a ticket.

What was O.P. in reference to?

cole said...

well seems like only yesterday someone here, maybe the Owner published bits and pieces of George Soros' book predicting this stuff..."the wealth factor" or the lack thereof...

rather humorous...

If one bought with the intention of fixing it up and living in it or renting it for a period of time...then who really cares what in the hell is going on, IF you can meet the payments...

If one bought for spec or on the hunch you could finance your real estate with the appreciation...so solly charlie...you lost...

Seems like only yesterday Wasserman, Sac Biz Journal, Comstocks...were telling us just how swell the "booming" economy was doing and just how wonderful real estate WAS...

Only Yesterday...

norcaljeff said...

Who cares what Forbes says, aren't they out of NY? What do they know about Sacramento RE? I mean if you looking at a black and white spreadsheet and is says LA is $700K for a home and SF is $900K but Sacto is $450K, yea that's all relative but relative to income, it's still HIGH. The RE market is still getting hammered. Free, liquid money is gone folks and most of the people on the sidelines don't have the cash for a down payment which is required to get into a home now. And the stock market is crashing, and if anyone (inc. Sippin) thinks stock monies will flow to stocks, you're on crack.
BTW Sippin, your posts are meaningless, most of your contributions are from taking someone random article out of context.

Diggin Deeper said...

Our RE and credit problems are now the world's problems. Our greed for ridiculous returns and yields have opened Pandora's Box. One of these days the rest of the world's going to say "no mas" and we will have to go though the rest of this mess alone.

The current meltdown in the stock market strongly resembles the dot.com bubble burst. Only this time the stalwart financials are being face-planted.

As a precaution make sure your downpayment cash is in FDIC insured banks or institutions. I just found out from my broker today that there are money market funds in brokerage accounts that are insured and then there are money market accounts within the same brokerage houses that are uninsured(usually at higher interest rates).

Sippn said...

Gwyn - you made a reference to Marina Prime who I hadn't heard of, so I mistakenly asked my kids about Optimus Prime, who, of course, is a famous "Transformer" and got the Daddyouresostupidlook.

Cole - the reason loan applications ask if the property is to be owner occupied is that their underwriting standards are different, that properties that are to be occupied by the owner have a higher probability of getting the monthly payment paid.


Rates for non-owner occupied and commercial loans are typically higher.

Down payments or equity requirements for non-owner occupied and commercial are higher.

Consumer laws that apply to owner occupied loans may not apply to a loan on a home that is essentially a business arrangement.

smf said...

"BTW Sippin, your posts are meaningless, most of your contributions are from taking someone random article out of context."

Pretty much only lately, as the arguments against housing problems quickly evaporate.

"The current meltdown in the stock market strongly resembles the dot.com bubble burst. Only this time the stalwart financials are being face-planted."

The dot.com bubble was contained within certain parameters. For example, when I played that market, it was with my retirement account. Any losses I would have taken were not done with my day-to-day money. Plus the losses were mostly less than $100K for people.

And it was contained to certain areas.

This bubble had a lot more people and countries involved. Therefore, the problem is much, much bigger.

After all, you could get into this game with little skin.

Sippn said...

Norcal - then don't worry about my posts and follow me around from blog to blog - I must have offended you before but can't remember (mary janes I remember)

Lander had quoted the same Forbes article. Yes they really don't know about CA RE.

I'm thinking about getting my RE license. Hate me?

Thought it was time to get out of stock market a few months ago.

Hey - where do you think "they" will put their money - investors are still hungry for returns.

anon1137 said...

It's finally beginning to feel like a significant, widespread correction is underway. But 16% off the peak is still a drop in the bucket. Nondescript 2-story stucco boxes sitting in the flood plain in Natomas are still going for $600K. Not to mention $500-600/ft2 in East Sac. And realtors aren't selling their Lexuses on the corner yet.

Diggin Deeper said...

"Hey - where do you think "they" will put their money - investors are still hungry for returns."


Not by the looks of market the last several weeks. In fact, it looks like investors have had their fill of risk. Otherwise they'd be snapping up Countrywide's paper.

Carry trade currencies are beginning to get a lift due to credit unwinding.

This volatility is here to stay and it will keep most of Main Street off the playing field.

Cash is king. Too bad the returns for holding cash don't reflect inflation for what it has become.

HappyinSF said...

Sippn,
Please do become a realtor if you are in fact not already one. I hear that's a great profession to get started in these days. The timing is perfect. Brilliant. Also, I've got a hot tip, you should invest in Kozmo.com and Pets.com stock pronto!

Gwynster said...

Ahhh The Marina Prime reference is from Patrick.net. SQT used to post there quite often. They had a famous troll by that name who go on about prices would never decline in the marina district because it was prime.

Speaking of prime east sac
Ladies and gentlemen, for your viewing pleasure:
MLS MLS #: 70033957
Now that is a drop I can respect.

HappyinSF said...

"Norcal - then don't worry about my posts and follow me around from blog to blog - I must have offended you before but can't remember (mary janes I remember)"

"I'm thinking about getting my RE license. Hate me?"

Nobody hates you Sippn, we are just utilizing your function as the blog jester. We are lucky enough to have a glutton for punishment to hang around and take it for YEARS while his ship sinks. Think of all the bubble blogs that you don't frequent that are lacking in somebody to rub their nose in the carpet daily! Yet you remain, bravo!

It does seem strange to me since I wouldn't hang around a blog where I didn't agree with the intent and purpose of the blog for YEARS especial since, as you say, the blogs have no effect on consumers. Strange indeed, but I guess it beats paying good money to be somebody's gimp.

anon1137 said...

Re: MLS 70033957, that's a beaut, Gwynster.

I see it sold for $9K in 1994. I wonder if it has granite counters.

Diggin Deeper said...

Hey Sippn's not so bad. Call his posts stimulative thinking. While most won't buy yesterday's real estate rhetoric, he does get sprited responses from many who post here.

Sippn said...

Now there you go again...

No effect on the market, but I do believe the blogs have an effect on our opinions and actions of those who read regularly.

I pay attention to this, Sac RE stats, Calc Risk, pester Avg Buyer, sometimes see what DrBrightside might possibly have to say interesting - but he rarely responds, OC stuff. Got rid of 2 pieces of investment RE this year after all the research, mostly due to the impact of the market at their locations.

Pretty amazed at the inaction of the Fed and at the weakness of the financial instruments used by Wall Street to fund this garbage.

I gotta get to work sometime!

HappyinSF said...

"Hey Sippn's not so bad. Call his posts stimulative thinking. While most won't buy yesterday's real estate rhetoric, he does get sprited responses from many who post here."

That's what I'm saying, we're lucky to have a troll with the gumption to hang around. "Real" was only willing to be our whipping boy until, like, mid 2006.

smf said...

"Real" was only willing to be our whipping boy until, like, mid 2006."

I encountered him at the sacstats blog not that long ago, insisting that areas like Gold River cannot go down.

He has not posted lately, I wonder why...

AgentBubble said...

Re: MLS 70033957:

From the agent remarks in MLS:

"Seller is lic realtor"

Imagine that.

HappyinSF said...

"No effect on the market, but I do believe the blogs have an effect on our opinions and actions of those who read regularly."

So, can somebody explain how this sentence make any sense whatsoever?

You read the blog, you don't buy a house, you directly effect the market.

So then, you are here in a hope of propping up the market.

Gwynster said...

The thing is that east Sac dog is exactly what I'm looking for. A smaller, total dog in a decent area.

Now that property is going to need a whole lot of work. I wouldn't be expecting any construction loans for a whole so anything you pick up, you'll need to be able to paid for the work in cash or do them yourselves.

If I worked at UCDMC, I'd probably get happy but I'm stuck in this messed up town of Davis.

However, we're finally getting some nice movement on defaults. As long as the single malt keeps flowing and y'all hang around and tolerate my pithy witisms, I'm ok with waiting the masses out >; )

Gwynster said...

ps. I'd miss Sippin. He's my freaky market barometer.

smf said...

"Seller is lic realtor"

Imagine that."

AB, how many of these types of situations did you see in the bubble years?

I recall two from co-workers, where a realtor buys the property for cheap, gets their commission, and then does a slight remodel and sells for a profit.

Little double dipping, right?

AgentBubble said...

smf--It happened A LOT! Some even made quite a pretty penny doing it. Then there were those who got in late in the game and are losing everything. I know a 20-something realtor who bought 2 houses back in 2005 and just now had notices of default filed on both because he hasn't been able to unload them.

anon1137 said...

Gwynster - that's not a decent area. It's a tiny house on a tiny lot, on the corner of a busy street and a stone's throw from highway 50. Corner lots are to be avoided everywhere, but especially in East Sac.

This reminded me of another overpriced realtor/owner listing I was tracking last year, 1011 49th St. I think it first came on the mkt around $425K (for 900 ft2!). I just looked it up - sold for $336K in 7/2006.

smf said...

"Some even made quite a pretty penny doing it"

I wonder if most (doubt it) were smart enough to get out after the 2005 peak.

I can certainly see where a realtor made good $$$, kept doing it to make even more $$$, and now find themselves in heaps of trouble.

Real said...

I don’t post here because Lander will delete them – not that I care and I really don’t see a need to share my pearls of wisdom with the unwashed masses. As for SMF, I encountered you on Sac Realestate where you called me a liar as to income level and profession. I challenged you to meet me where I would prove both points (and leaving you $1K lighter) but you turned tail and ran. As to why I do not post much anymore – why should I continue to rub in how you all have been 100% wrong to date? Inventory is down YoY exactly as I predicted – none of you predicted that. Gold River is holding exactly like I said it would – no foreclosure activity yet (per Realtytrac). So, maybe when there is a material change one way or the other, I will post. Until that time, you will remain 100% wrong and I will remain 100% right. I still find it humorous how you renters feel so empowered. Truth be told, you do not have the resources to even buy a house so who cares about you opinion? Fact of the matter is that people with money own real estate – unless you think Buffett and Gates liquidated their holdings. I usually follow the lead of people with more than 2 nickels to rub together when looking for economic trends. Same probably applies to Sippin – he/she probably has money and is actually part of the market so maybe you should read his posts and actually learn from them. Okay Lander – I am ready for the dump…

Gwynster said...

damn I was hoping to find _anything_ out there that didn't totally suck.

Now I don't have an issue with a small house. 1000 sqft is small but doable as I live in a 700 sqft br Streng now. Mr. gwynster and I utilize a very small footprint. The extra 300 would be palacial.

I also don't mind the location. I happen to be a city girl and loved hearing the muni every evening when I lived at 16th and Q. One person's charming is another's annoying.

Now the corner lot, total deal killer. It totally jacks your taxes with zero benefit and screws up what is usable lot space.

Diggin Deeper said...

Well that was one damn quick response Mr. 100% Right... for someone who doesn't frequent this blog very often.

And I guess I would ask why you're drawn to this blog anyway, unless of course you're beginning to quesion how 100% right you've really been?

But giving you the benefit of the doubt, I remember when I was in my 20's. That was the last time I ever got close to thinking I was 100% right. I was still carrying the mentor's briefcase because I was a little too 100% right to carry my own.

smf said...

"As for SMF, I encountered you on Sac Realestate where you called me a liar as to income level and profession"

I take it that you work at ReMax of Gold River then?

Lander, would you do me a favor and check their latest GR transactions? They seem waaaaay overpriced for what little is selling in GR.

"I encountered you on Sac Realestate where you called me a liar as to income level and profession"

You never stated what you did. Agentbubble knows fully well where I work and my connection to the industry.

"Gold River is holding exactly like I said it would – no foreclosure activity yet"

Then you haven't looked. We already saw a foreclosed home for $595K that is still sitting. Several in Old Eureka are also headed that way.

"you will remain 100% wrong and I will remain 100% right"

You've been right?

"Truth be told, you do not have the resources to even buy a house so who cares about you opinion?"

Been there, done that. We already have a house, and have access to more resources than you ever will. BTW, my father is self-financing a spec mansion in Serrano.

"Fact of the matter is that people with money own real estate"

And they loose money at it as well. Witness my in-laws. Their $1.2 million is now less than a million, per the EDH assessment. That is altogether about a $300K equity drop in a little over a year.

"Same probably applies to Sippin – he/she probably has money and is actually part of the market so maybe you should read his posts and actually learn from them"

Everybody is a genius when a market is going up. I take it you a sippn thought yourselves as much.

HappyinSF said...

LOL, I love how I resurrected "Real". Real, Gold River was and will always be Rancho Cambodia. All the beige stucco on the planet will not change this fact.

Gwynster said...

It's like beetlejuice, don't say the name 3 times.

Funny thing is I imagine real wearing that nasty burgundy tux too, just with a whole less hair in a carefully crafted comb over.
http://tinyurl.com/32kwn6

Kinda sexy in an undead, James Gallo sort of way >; )

Diggin Deeper said...

Or maybe like the old commercials for the up and coming "Chucky" movie...."He's back!" (with chainsaw music in the background)

Real's return has got to liven up the crowd....

smf said...

"Gold River was and will always be Rancho Cambodia"

Not really. But that is all in the eye of the beholder.

What I noticed, and others can correct me, is that there was a HUGE amount of buying in GR towards the end of the cycle. And I would guess that most were done with exotic loans.

GR is NOT a place where the really rich congregate, that is part of the reason why I don't see any justifications for the price runup there. After all, the area has no really personality like East Sac, EDH, Arden Park or Granite Bay.

lexi said...

Real, your pearls of wisdom are worth about as much as dental floss at a Willie Nelson concert. ...

HappyinSF said...

Is gold river on the other side of the river now? Originally, I think in the late 80's early 90's, GR was a small brown tract with security that would hassle you if you were in a car waiting for a resident. I always thought it was cute that a small tract straddling gang land wanted to call itself anything else but Rancho even though it was totally in Rancho. It was like building a small tract in Del Paso Heights and calling it "Super Golden No Crime REALLY Don't shoot me in the face land". I suppose it is really built out now and perhaps deserves its distinction now, but it still straddles gang land. That is why they have the security that they do.

lexi said...

And Real..
I think Lander only dumps posts
that are vicious. Sippn is never
rude so I doubt his posts have
ever been dumped.

smf said...

GR and Rancho are two distinct entities. GR is still Sac. County and not a part of RC.

The school district is also San Juan, and the schools for GR are far better than the RC options.

HappyinSF said...

So now it's really far from Coloma Rd. or Folsom Blvd?

Diggin Deeper said...

As far as a community is concerned GR is moat surrounded enclave that has to fight off the elements in order to keep the young urbans happy. I suppose fences on three sides are supposed to keep the problems away? The kids have step over the lower class riff raff if they want to go anywhere ouside they're small area.

If you're going to build a planned community build it way out of nowhere and establish a small city or community with its own infrastructure to support it. That way you control the elements from the inside out and at the same time create a desireable character where people want to live. It's been done all over the country, it just wasn't done in Gold River. It's location will be its eventual downfall.

Sippn said...

Pretty thick - too nice - what do you want now I would ask my teens.

SMF - "everybody is a genius when the market is going up" are u quoting me? Ha Ha. If you're not nice, I'll go find your father at the spec house and tell on you! (too much info dude)

I practice being nice to youall and see if it works on my teens. not. School starting thank gawd.

Isn't it great that none of us have a real job (apparently)?

smf said...

SMF - "everybody is a genius when the market is going up" are u quoting me?"

No.

But it is pretty easy for anyone to make money during a boom. Doesn't necessarily mean they are geniouses, just that they are lucky.

And you must know that that qoute has a long history of being used in the financial market, akin to 'a rising tide lifts all ships.'

"I'll go find your father at the spec house and tell on you! (too much info dude)"

Doubt you could, as there are waaay to many specs mansions being built in EDH.

'I practice being nice to you all"
"Isn't it great that none of us have a real job (apparently)?"

Practice what you preach.

As mentioned, with my brief e-mails with agentbubble, he is well aware of where I work. There is also another friend who lurks around these blogs who can verify that I have been involved in construction for many years.

Hence, not only am I privy to future construction projects, and the state of the market, but I use a computer 24/7 for my work, and blogging fun.

Real said...

Real, Gold River was and will always be Rancho Cambodia.

Your asian racist comments make a great combo with Gwensters anti black (‘those people’ at Arden mall) comments. I think your true calling is participating on the Sacramento Klan blog.

I always thought it was cute that a small tract straddling gang land wanted to call itself anything else but Rancho

Yeah, glad we have that river keeping us from all those undesireables invading from Fair Oaks. Where exactly is the gang land located? When I look out my window, all I see are trees, parks, perfectly maintained houses and gardens so maybe you can fill me in on this gang land all over the place. Are there Blood and Crip branches for Gold River yet?

So now it's really far from Coloma Rd. or Folsom Blvd?”

Yep, Folsom runs right down the middle of Gold River….

After all, the area has no really personality like East Sac, EDH, Arden Park or Granite Bay.

Yes, the commute of ~20 minutes to downtown, 5 minutes to Folsom and the perfectly maintained parks, community trails, homes, gardens and river access are not at all like EDH. If you like 3000ft^2 $hitboxes, a long commute and no true community elements (maintained trails), then EDH is the place for you. As commutes get worse, Gold River will continue to increase in value as its location is excellent and the HOA’s ensure the community remains top notch.

smf said...

"If you like 3000ft^2 $hitboxes"

While I vouch that the maintenance and the construction standards of GR are top notch, you must realize that the exterior of most houses in GR are not, what's the word? Well, they all look the same and are nothing more than track homes.

The commute is a winner, but you still have to get thru the Sunrise and Hazel maze before you get home.

Real said...

Well, they all look the same and are nothing more than track homes.

That is a question of taste. Personally, I don't like hiphop music - but that doesn't mean that other people don't. Some looks are classic and some looks are stucco - depends what you are looking for I guess.

The commute is a winner

Looks like you are learning little by little. You keep up that learning curve and I will have to be petitioning the HOA to not allow you to buy in Gold River soon.

norcaljeff said...

Sippin,

You didn't offend me at all, I'm just not impressed like others are when you use "big" words. I can see through the RE misinformation you are spreading. It's interesting that you post bullish comments and yet you unloaded two properties this year. If the market is so great, why are you selling??? Like many other readers of this blog, we are thankful to Lander and the others b/c I probably would have bought a house in the past 2 years but didn't and I was happy to see I wasn't the only one in that boat. Whew! Many people read this blog and it makes me ill that you have a vested interest in spreading misinformation or spinning bad news which might cause someone on the RE buying fence into buying an over priced home. It's easy to hide behind a user name on a blog and throw out all kinds of random quotes and articles to feed your interests. It reminds me of these publicly traded companies whose CEOs anonymously post “good” and “buy” comments on the stock message board while behind the scenes they are selling their stock for a profit. It unethical and immoral to spread pure nonsense.
(Maybe Real is Sippin's bipolar second personality?)

Gwynster said...

If folks are really impressed with the use of the word bifurcated, we all have bigger problems >; )

Mike said...

I don't care what anybody says, I am in complete agreement with Real.

I am also a Big Gold River fan. Excellent location, good schools, nice clean neighborhood, parks, near river,etc.

I have lived in Elk Grove, Natomas, El Dorado Hills, Fair Oaks and Gold River and I like Gold River the best. Only problem is prices in Gold River has not come down enough yet. I am hoping this current credit crisis will hasten the Gold River price drop.

And for the "Rancho Cambodia" comment, I haven't heard that term in many, many years (and was hoping this term has died off). Are people still calling Rancho by this name? I don't think not many Vietnamese people live in Rancho like they used to. I see more people with Russians heritage than Vietnamese in Rancho these days.

norcaljeff said...

Let's call it Rancho Chernobyl then. Who cares folks, it's just a name, don't be so sensitive. Sell your property and buy a sense of humor.

buying time said...

Let's not turn this site's comments into the horrible pissing matches found on the SacBee's website. We all come to these RE blogs for data and facts that the MSM doesn't/wont' provide. Not everone interprets data the same way. It doesn't make someone stupid if they disagree.

And yes, I play mom in real life too.

smf said...

"I am also a Big Gold River fan. Excellent location, good schools, nice clean neighborhood, parks, near river,etc."

Agreed. Only problem for long-term survival would be that GR has no real character. Recall that the most consistently expensive areas in the city are a mixture of typically custom homes, and GR has none.

"Only problem is prices in Gold River has not come down enough yet. I am hoping this current credit crisis will hasten the Gold River price drop."

They already are. I have seen a lot more GR houses for sale lately.

norcaljeff said...

BT, I'd hardly call many of comments from of these talking heads factual or based on data. People have agenda's you gotta understand that, and not everyone does.