'I Think the Market Is Showing Life Toward the Bottom'

From the Sacramento Bee:

Sacramento's 2-year-old real estate downturn has a good chance of hitting bottom in 2008, banking and building industry analysts told struggling area builders gathered Wednesday in the capital...[N]ew home builders were told to expect months more of the slowed sales and heavy discounting that have marked 2007.
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Last year at the same session, builders heard that analysts were monitoring Sacramento for signs it would begin leading the nation out of the housing slump. This year more sober assessments prevailed in a market hit hard by too many houses for sale, lack of buyer urgency and, lately, a credit crunch that dried up financing for an estimated 30 percent of would-be buyers.
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Overall, Sacramento's journey to recovery has "been a longer road that I thought," said Steve Smiley, a managing director for Hanley Wood. Smiley, who watches Bay Area and Central Valley housing markets, said that despite builders' current troubles buyers probably shouldn't expect new home prices to fall a lot lower. "I think the market is showing life toward the bottom," he said.
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Hanley Wood's Smiley predicted Wednesday that builders are likely to end this year with about 9,000 new home sales in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. That's down considerably from his prediction a year ago that 2007 would end with up to 11,500 sales. Through July, builders sold 5,068 homes in the six-county region, Hanley Wood reported, compared with 6,175 the first seven months of last year. "We expect sales next year to push 10,000," he said. "The incentives will continue."

From The Union:

A developer of a south county subdivision is downsizing his original housing project to meet the demands of a changing real estate market.The one-time luxury housing development is now being repackaged as a subdivision for smaller, lower-priced homes and senior apartment complexes. “We’re kind of revisiting the demographic, because the market is going through transitions,” said Dave Snow, president of DAS Homes.
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Snow first brought his ideas to Nevada County three years ago, when home sales were booming. Since then, the housing market has declined sharply, leading to defaults on subprime loans and foreclosures — in Nevada County and nationally.
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Snow is bypassing his original plan of two-story custom homes with pricey doors and granite countertops priced between $495,000 to $860,000 for smaller single-story homes with tile countertops priced at $450,000 to $600,000. "There’s a lot of people just as happy with tile countertops if it can save them money," Simmons said.
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Snow said he will keep a watchful eye on the market, and if it continues to show stagnant signs, he would have to re-evaluate his plans for the site. "Ultimately it’s my responsibility to be open-minded and meet the demands of buyers. If the community needs housing, that’s our goal. I’m not going to build a project out if there’s no buyers," Snow said.