Tuesday, October 23, 2007

Another Price Milestone: Price Per Square Foot Breeches the -20% Threshold

According to TrendGraphix's latest report [pdf], the average price paid per square foot in Sacramento County dropped to $203 in September, a 20.1% decrease from its peak in September 2005.



Here's a look at MLS inventory in the Sacramento (4-county) region. Inventory continues to expand on a year-over-year basis, according to TrendGraphix figures provided by the Sacramento Bee.

17 comments:

Rob Dawg said...

Price per square foot used to be Lockwood's faborite measure of the great and healthy Sacto market.

Diggin Deeper said...

It's no wonder we are continuing to see real estate prices fall. As the economy gets subprime's full impact in the coming months, prices should weaken even further. We've got a ways to go before we're sub $150 per sq. ft. but I do believe it's worth the wait to see where they end up.

Merrill posts $2.3 billion loss

http://news.yahoo.com/s/nm/20071024/bs_nm/merrilllynch_results_dc_6

"We are working to resolve the remaining impact from our positions," O'Neal said in a statement."

You mean there's more?

Merrill is just one, in long line of financials, taking big losses for the subprime mess. While most of these banks are saying they've taken the hit and there's blue sky ahead, Merrill appears a bit more honest on what's in store for the future. They're scratching their heads trying to figure out just how big these losses really are. For Citi, Bear Stearns, WaMu, BofA, JP Morgan, and others to say they're now clean is ludicrous and downright misleading to investors. They've been duped by greed and really can't know how bad the situation is until it's too late to react.

Diggin Deeper said...

And if Merrill's problems weren't enough:

Home sales plunge by 8 percent

http://news.yahoo.com/s/ap/20071024/ap_on_bi_ge/economy_10

"The weakness in sales translated into further pressure on prices. The median price — the point at which half the homes sold for more and half for less — fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It marked the 13th time out of the past 14 months that the year-over-year sales price has decreased."

When the problem is widespread across all regions, how could one expect anything different from the Sacramento market?

All this is likely to lead us into a recession that further dampens demand. Prices are deteriorating rapidly and if we go "zero growth" with a contraction in jobs, prices will continue to roll over and head south.

Gwynster said...

Agent,

MLS #: 70076734 what's the story on this one?

Riding into work, I counted 3 homes with NOD looking forms on the front door. This is only one I found on the MLS.

If Davis is finally giving up the ghost, midtown east Sac, the parks etc are sure to be feeling pain as well.

smf said...

"If Davis is finally giving up the ghost, midtown east Sac, the parks etc are sure to be feeling pain as well."

Have you seen the 'sale pendings' for these areas. There are barely any, especially at the high end.

As my wife said, those who have the money are usually a lot more careful and are better informed about the current circumstances.

We 'could' have bought a $600K home with a conforming loan, and have affordable payments. But knowing the information, and where the market is headed, we have decided to wait.

Diggin Deeper said...

I wouldn't be surprized to see the inventory levels stall for a short while over the next couple of months. Why? The season itself should produce fewer listings giving the builders a chance to snag a few buyers at deep deep discounts. If we do see a drop in inventory it will bring out the realtors claiming another false bottom that buyers should entrap themselves in.

The banks are so wrapped up unravelling losses due to CDO failures and nonperforming inventory assets, a jumbo loan will be harder to come by. And that won't bode well for the "bullet proof" communities in the area.

AgentBubble said...

Gwynster said...
Agent,

MLS #: 70076734 what's the story on this one?

Purchased 01/2004 for $375K. On the market now for $419K (100 days on market). Started at $439K. Owe around $285K on it.

Jennifer said...

Hey guys!

Why is there a discrepancy between Sac tax assessor values and sacbee sales price? Are these supposed to correlate?

Gwynster said...

Hmmmm they owe 285k yet there is big fat NOD nailed to the front door? ouch

AgentBubble said...

Jennifer,

Can you give me an example? I'll look it up and see what's going on for you.

PeonInChief said...

Gwynster--

It's possible that there are two notes (for first/second mortgages) and the other default hasn't been recorded yet. If not, selling for that much more than the note would be awfully dumb.

Diggin Deeper said...

I guess if we're rolling prices back to 2004, the real estate tax roles should be rolling back with them...Not really a great situation for a county that depends on its government for growth and jobs. I think Gwyn pointed out that we'll probably have our hands full cleaning up SoCal...kind of a double whammy!

paranoid renter said...

Why is inventory going down? Who's buying right now???

I would buy if a seller took my low ball offer, usually around 20% off the asking price. Right now more like 15% off the asking price. If it gets accepted I would be very scared to buy!! What a catch 22.

SheWrestles said...

I guess if we're rolling prices back to 2004, the real estate tax roles should be rolling back with them...Not really a great situation for a county that depends on its government for growth and jobs.

They need to get people in the homes. Eventually, they'll either learn to operate on less (unlikely) or find other ways to make up for the shortfall.

As I see it, they've got 8 years to get the high school built at Twelve Bridges.

SheWrestles said...

I would buy if a seller took my low ball offer, usually around 20% off the asking price. Right now more like 15% off the asking price. If it gets accepted I would be very scared to buy!! What a catch 22.

I *am* scared, believe me, but I'm reasonably comfortable with this as a medium-range investment.

I initially planned to buy home in Lincoln back in March. When we looked at the house, the asking price was $490K. Coming from SoCal and not knowing any better, on the advice of our realtor, we submitted an offer of 470 (instead of the 450 I wanted to go with).

The next day, the asking price was *raised* to 499 and the seller countered with 490, which was the list price when we looked at the home.

We countered twice - they would not budge and, in fact, even sent us an impassioned plea. We went into contract and a week later, after researching the market, I began to realize what a terrible deal this would be, so I canceled the purchase.

Seven months later, the asking price is now 449, and still hasn't gotten a bite.

It's a gorgeous home, but I'd be surprised if it goes for more than 410-415. Their greed has cost them 10s of thousands, so I don't feel sorry for them at all.

Jennifer said...

Agent,

8131 scenic trails
value in assessor $441, same as pre sale

sold in sacbee for $735

BTW, we are renting in similar sub for $2200/month. What a bargain! And will continue to rent until this sub sells for $575, I hope!

AgentBubble said...

Jennifer,

Thanks for the address. My best guess is that the assessor's office just hasn't gotten around to it yet. Sounds lame, but I've seen it tons of times, and now that they're being inundated with appeals from owners wanting their properties reassessed, I really think this might be the case. I'm certain the new owners of this property will soon receive a supplemental assessment with a sharp increase in taxes. But, if the lender did his/her job, the new owners should already be anticipating this because it's already being accounted for in their impound account. Hope that helps.

P.S.--I've seen supplemental bills come as late as 2 years (happened to us).