'I Don't Believe It's Getting Worse....'

From the Sacramento Bee:

Sacramento-area home builders are on track this year to sell the fewest number of new homes since 1997 following one of the toughest quarters yet in the ongoing housing slump. At the current pace, capital-area sales could dip below 8,000 this year, only slightly above the 7,455 registered 10 years ago, according to the Folsom-based Gregory Group, a home building industry tracker.
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Home building giants and local family builders alike -- struggling with tightened credit standards for buyers, excess inventory and consumers waiting for still better deals -- sold 1,592 homes from July through September in the six-county region, the Gregory Group said in a report scheduled to be released today.
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"It is tough. It's tough up and down the state," said Chris Hanson, a Sacramento-area executive for Costa Mesa-based Warmington Homes. The firm recently laid off 15 Sacramento staffers and folded its capital operation into an East Bay division.
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Sacramento builder John Leonard encountered roadblocks, too, after auctioning 22 West Sacramento town homes last month. "The homes we sold at auction were too low and didn't meet the bank payoff requirement," Leonard said Thursday. Leonard said his lender rejected all bids because they were at least $88,000 below minimum for each unit. He said negotiations are proceeding for investors to take over the River's Side at Washington Square project.

Gregory Group data
Historical sales charts

From the Sacramento Business Journal:

Sacramento's new-home prices have rolled back to where they were in spring 2004, and they're predicted to keep dropping before there's any recovery. The average new home in the six-county area costs $429,678, and the median price has fallen to $389,990, according to the latest data from new-home analyst The Gregory Group.
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"It's the same thing each week," [Dunmore Homes VP John] Slaughter said of the housing indicators. "The news doesn't change. I don't believe it's getting worse, but there's no indication that it's going the other way."
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New-home communities are now selling property at an average rate of about one home every three weeks. Paquin said he's talked with builders who say they can hold out for the next six to nine months at that rate, but the slump is expected to last at least until the end of 2008.
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According to the state's Employment Development Department, the Sacramento region lost 2,000 jobs in August, a downturn largely attributable to the housing slump, the agency said. The area has 4,800 fewer construction workers than it did at the same time last year. Financial jobs, which include those in the mortgage lending business, are down by 2,000 from a year ago.

From the Sacramento Bee:

Hail to real estate forecasters who stick out their necks in a volatile market and make predictions for 2008. Most of what they predicted this time last year for 2007 missed the mark by a mile. Most were simply too sunny.

Consider the California Association of Realtors. Last fall, looking at 2007, it predicted sales of existing homes in California would fall 7 percent from 2006. Actually, it's more than triple that -- a 23 percent drop from 2006 to the fewest sales in 12 years. ...
While sale prices statewide likely will fall 4 percent next year, [CAR deputy chief economist Robert] Kleinhenz said it will be worse for hard-hit Sacramento and the Central Valley. Watch for sales prices here to fall another 8 percent to 12 percent next year, he said.

From the Sacramento Bee:

During the recent housing boom, Oak Park attracted considerable interest among real estate investors and people looking for a more affordable alternative to other established neighborhoods near downtown...Since the housing market fell into its slump, foreclosures have produced boarded-up homes in some parts of Oak Park and other city neighborhoods.

[Architect/Developer Ron] Vrilakas isn't sure what to expect. He and Rosenbloom have sold two units so far and are working with two other buyers. "Unfortunately, we're hitting the housing market at the absolute wrong time," he said. "If we sell these in this market, it will be a really good sign for Oak Park."

From the Sacramento Bee:

The federal government has warned the city of Sacramento that it plans to slap growth restrictions on North Natomas because of its flood risk. In a letter dated Sept. 27 -- but which city officials say they didn't receive until Monday -- the Federal Emergency Management Agency informed Sacramento that it was denying the city's request to continue allowing unrestricted growth in North Natomas while the levees are improved.
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Yet Mayor Heather Fargo said the hit from FEMA isn't as bad for the city as it would have been a few years ago, when the housing market was strong. "It does help us, in a perverse way, that the market is slower," she said. "We're not getting a big push to do a lot of new residential development right now."

From the Merced Sun-Star:

Merced finally ranks No. 1. Unfortunately, it's the nationwide foreclosure rate. Merced saw more foreclosure-related activity than any other metro area in the country in September....

Sharon Mogliotti, a mortgage planning specialist with CTX Mortgage, called the skyrocketing foreclosure rate a "history-setting" moment for Merced. "Our mortgage industry and the economy has never been through a market like this," she added. Mogliotti has worked in the mortgage industry for 40 years.