Monday, October 08, 2007

"Civil Protest"

From the San Jose Mercury News:

One-third of the houses in Paseo West will go on the auction block Saturday - houses that are sitting eerily empty in tidy rows along newly paved streets, houses that wouldn't sell even though Anderson Homes cut prices by $100,000 and offered free granite countertops and big screen TVs with surround sound.
...
Saturday's auction in a Hilton Hotel ballroom in Pleasanton is the latest sign that the subprime lending crisis is hitting hard. Banks are tightening loan requirements on some of the Central Valley's best customers - first-time home buyers who need easy credit with little money down. Builders like Anderson Homes, who have catered to these buyers with homes in the $500,000 to $600,000 range, are stuck with a glut.
...
Since the auction advertising blitz of Paseo West was launched three weeks ago, foot traffic at the sales office has tripled - infuriating homeowners who see potential bidders as the enemy. In his own attempt at civil protest, homeowner Randy Brown tried to scare off investors one day by raising his garage door, pulling out his jacked-up truck painted with green flames, cranking his music and revving up his motorcycle. "I bought my house on August 16," Brown said. "If one of these houses goes for the minimum bid, I will have lost $155,000 in six weeks."
From the Sacramento Business Journal:
Sacramento's Development Services Department is facing an unexpected shortfall of $3 million to $4 million stemming from the slowdown in new-home construction, as the city joins the ranks of other municipalities that have been forced to adjust financially. As a result, the city has delayed hiring 36 workers intended to further streamline its development-approval process, which in the past has been a sore point with developers. Officials say they won't cut staff or reduce effectiveness of programs to bridge the budget gap.
...
[R]esidential construction, which encompasses new homes, remodels and repairs, began falling steadily from a high of $569 million in 2003 to $329 million in 2006. Fewer than 900 new homes are projected to be built in Sacramento during the current fiscal year, compared to more than 3,000 during the peak building years of 2003 and 2004.

11 comments:

Sippn said...

Pull out the truck and turn on the radio? wow, maybe the minumum bid was set too high!

BMac said...

Anybody who buys a ticket on the titanic from the southern tip of Greenland for 15% off, when they see the ship is pointed straight up and down, ready for a nosedive, deserves to go down with the ship. So does this guy.
Its called thinning the herd.

Gwynster said...

LOL I was thinking the same thing.
Wouldn't you want to live next the Truck-boy the mental giant?

These people need to entice the folks coming to buy to lay down large hunks of cash to hopefully retain some of the value - not discourgage them.

smf said...

"These people need to entice the folks coming to buy to lay down large hunks of cash to hopefully retain some of the value"

Especially in new developments. I mean, you do take a risk in not knowing how well the development will age.

So slowly we are seeing the bloodletting begin.

It is a very painful but necessary transition to a normal market.

Jacob said...

Now I may be missing his point but if he only scars off 50% of the bidders wont that make the homes go for less due to even less competition from bidders...

Sippn said...

jacob - yes he just cost himself more loss - stupid - should have been mowing.

Sittin' Out This One said...

Sippn, right on, as usual. Instead of mowing, he should have rented a Ferrari and a couple of models in skimpy swimsuits to wash it. He might have bumped the comps by $50,000, and it would have only cost him $300!!!

G Spot1 said...

Wow, just wow. The stupidity is simply stunning. I guess these are the people who were buying in the Central Valley in August....

andnee said...

Banks are tightening loan requirements on some of the Central Valley's best customers - first-time home buyers who need easy credit with little money down. Builders like Anderson Homes, who have catered to these buyers with homes in the $500,000 to $600,000 range, are stuck with a glut.


Are 500,000 to 600,000 dollar homes really first time home buyer houses? I guess I live in a dream world where your income has to be somewhere near the cost of homes. I know I am speaking about OLD TIMES but when my wife and I bought our home in 2000, 160,000 dollars would buy you almost anything anywhere in sacramento! Also the banks would not loan us anything over 165,000 dollars even with our household income of 71,000 a year. My how things have changed.

SacramentoCrash said...

Yeeeha!

What do expect from some of the yayhoos that moved to the Central Valley?

Guys with beer guts, pick up trucks, "Toy Haulers" and the assorted detritus of trailer park life.

smf said...

I would like to remind you all that little down payment for a house made sense when a started home here was $100K.

I got my first home with a little down ARM in 1994. Of course, an ARM back then was different, since I was actually paying principal.