Condo "Scrapheap" Grows

From the Sacramento Bee:

Billboards featuring the bemused face of star architect Daniel Libeskind have disappeared from downtown street corners, and so have plans by Denver developer Craig Nassi to build two Libeskind buildings here. First, Nassi's Aura condominium project on the Capitol Mall ran into trouble. Now the head of BCN Development says he can't find financing for the 50-story Epic condo and hotel tower he planned for 12th and I streets, either.

Last week, a lawyer representing Libeskind and the local office of architecture firm Stantec Inc. sent a letter to Nassi terminating their relationship for nonpayment. "Design professionals do not have the ability to continue working for free," said the letter from lawyer John Condrey, a copy of which was provided to the city. In an e-mail Thursday, Nassi characterized the letter as a "routine" part of shutting down the city approval process for Epic for lack of funding.
...
"Sacramento's economy is so depressed at the moment, we can't get lenders to consider any projects at this time," he said.
...
The scrapheap of high-rises planned for Sacramento before the real estate market collapsed is starting to pile up. Libeskind's creations join the twin 53-story hotel and condominium towers formerly planned for the Capitol Mall by local developer John Saca.

From DQNews.com:

Lenders started formal foreclosure proceedings on a record number of California homeowners last quarter, the result of declining home prices, sluggish sales and subprime mortgage distress, a real estate information service reported. A total of 72,571 Notices of Default (NoDs) were filed during the July-to-September period, up 34.5 percent from 53,943 during the previous quarter, and up 166.6 percent from 27,218 in third-quarter 2006, according to DataQuick Information Systems of La Jolla. Last quarter's default level passed the previous peak of 61,541 reached in first-quarter 1996. A low of 12,417 was reached in third-quarter 2004. An average of 34,781 NoDs have been filed quarterly since 1992, when DataQuick's NoD statistics begin.
...
Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 24,209 during the third quarter. That is the highest number in DataQuick's statistics, which go back to 1988. Last quarter was up 38.7 percent from 17,458 for the previous quarter, and up 604.8 percent from 3,435 for last year's third quarter. The peak of the prior foreclosure cycle was 15,418 in third-quarter 1996....
...
Half the state's default activity is concentrated in 293 zip codes, almost all of which are in the Inland Empire and Central Valley...While numbers at the zip code level can fluctuate severely, among the zips with the biggest foreclosure problem are 95330 Lathrop in San Joaquin County, 92571 Perris in Riverside County and 95832 Sacramento.

From the Sacramento Bee:

At least 6,638 homeowners in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba received formal notices of default -- the first step in the foreclosure process -- from their lenders during the three-month period....That's up 27.6 percent from April, May and June defaults in the six counties...Sacramento County's defaults were up 180 percent from July, August and September 2006.
...
In the six-county region, 2,731 home owners lost their houses to banks during July, August and September. That's up from 2,203 foreclosures in those counties in April, May and June.
...
DataQuick says about 46 percent of homeowners who go into default are able to work out financial arrangements to either keep their houses or sell them and pay off their debts.

From the Sacramento Bee:

We know. We know. The real estate news these days is always about home sales hitting a new low and values falling. As 2007 nears an end, everyone who owns a house is longing for something better – a recovery or at least some stability for the Sacramento region. Most local experts counsel it's still a little early to be talking about either.

But for the sake of all anxious homeowners standing around the wishing well, let's look at local history. If it has anything to tell us, it's that real estate recoveries – and that dependable upward trajectory for California home values over the long run – usually come pretty fast once they start.

Consider 1997 across much of the Sacramento region. After several lean years of recession, job losses and military base closings, homeowners in El Dorado, Placer, Sacramento and Yolo counties saw their values start to climb again. Here's a look at [DataQuick] September median sales prices for new and existing homes combined in the region after recovery began and until the next boom took off.
...
Sacramento County: September 1997 delivered a $119,000 median price – still below the $138,000 median from September 1991. But the median climbed to $140,000 in 1999 and $154,000 in 2000. In September 2001 it hit $180,000 and then soared away. The September 2007 median: $307,000.

From the Sacramento Business Journal:

Bank of America Corp. will exit its consumer wholesale-mortgage business, a move that will eliminate 700 jobs, including "less than 100" in Rancho Cordova...The Rancho Cordova operation has a centralized processing operation for wholesale mortgages, and that will be ended.

From the Modesto Bee:

Condo conversions were all the rage a couple of years ago, as seven Modesto apartment complexes decided to sell about 500 rentals as owner-occupied units. The first couple of projects sold like hotcakes, filling a niche for lower- priced housing. Then the real estate market cooled, and sales slowed dramatically. Now after two years of trying, one of those multifamily projects is giving up on traditional sales methods. Instead, the Villas at Creekside is going to auction off its final 29 units Nov. 18, with bids starting at $100,000 to $130,000. That's less than half what those town houses sold for in 2005.
...
At first, only those who planned to live there were allowed to buy. Now investors are being invited to bid, and the auction is being promoted in the Bay Area....