Friday, October 19, 2007

September Massacre: Sacramento New Homes Median Plunges 22% YOY

September DataQuick statistics for the Sacramento real estate market are now availabe via the Sacramento Bee.

By County
By Zip Code

Some highlights for Sacramento County:
YoY = year-over-year

New Homes

  • Change in median price: -22.3% (YoY)
  • Change in sales: -31.2% (YoY)
At $303,000, the new homes median is now less than the median for existing homes.

Existing Condos
  • Change in median price: -26.0% (YoY)
  • Change in sales: -60.7% (YoY)
Existing Detached Homes
  • Change in median price: -11.4% (YoY)
  • Change in median price: -17.1 (Peak)
  • Change in sales: -43.3% (YoY)
All Homes
  • Change in median price: -13.5% (YoY)
  • Change in median price: -20.7% (Peak)
  • Change in sales: -40.7% (YoY)
From the Sacramento Bee:
Prices have fallen across the region as the supply of homes for sale continues to exceed the number of willing buyers. At September's end, there were 16,081 existing houses for sale in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based researcher TrendGraphix. That's more than triple the for-sale inventory in September 2004.
Lena Abello, her brother and two friends stood poised to buy their first home together last month – a $303,000 single-family house in Natomas. But the shake-up in the nation's mortgage industry abruptly shuttered their dream. "The day before we were to open escrow, my lender called and said the program we were about to qualify through was no longer available," said Abello, an asset planner at a local insurance firm. "She said we were no longer approved for a loan."
They had hoped to buy together what they couldn't afford separately. That turned out to be a four-bedroom, 1,800-square-foot house in Natomas owned by a San Francisco real estate agent. They negotiated a $303,000 sales price and planned a fast two-week escrow. The long-range plan was to get their feet in the door as homeowners and "use real estate to build and create wealth."
From the Modesto Bee:
Welcome to 2004. It's back to the future in the Northern San Joaquin Valley as median home prices have plummeted to 2004 levels...In the last 12 months alone, Stanislaus' prices have dropped nearly 19 percent. Merced County is even worse. Prices there plunged nearly 26 percent to $260,000 in September compared with a year earlier. That's the biggest decline in California, according to DataQuick....While the housing market is bad across the nation, most statistics show that things are worse in the Northern San Joaquin Valley than almost anyplace else.
Here's some good news about housing: Northern San Joaquin Valley apartment rents have been flat for a year. That's great for renters. Of course landlords and real estate investors may not think so.
Traditional methods of selling aren't working very well for Northern San Joaquin Valley home builders, so they're trying new things. The latest marketing method by Florsheim Homes is to sell homes to whoever makes the highest offer -- no matter how low it is.
One is a 1,250-square-foot former Valley Rose model with many upgraded features that had been priced at $259,900. "We've tried to sell it at that price, but we haven't had any real interest," [Joe] Anfuso [Florsheim's chief executive] said.
"There will be people out there who want these homes," Anfuso said. "They're not going to end up going for $150,000, believe me."
A 133-unit condominium project across the street from California State University, Stanislaus, is in danger of falling through, leaving investors in the lurch....The landowner, Modesto attorney Ralph Ogden III, said low-income apartments are one of five or six options being discussed. Plans have been approved for the condominiums, but unless construction starts in the next 10 months, those plans will expire. With the amount of work still needed to break ground, that is almost guaranteed, said Planning Commission Chairman Amos Reyes. "I think that's right," Ogden said earlier this month. "In the end, (condos) aren't economically viable."

That leaves investor Michael Chadd of Milpitas very, very unhappy. Chadd bought a $100,000 stake in the condo plan. For the last nine months, he's watched his money slowly drain away. Members of Strategic Investment Group, a Danville-based real estate investment firm, had a strong pitch when Chadd met them last year at a wealth expo in San Jose. What Chadd didn't see and Strategic Investments didn't mention was the sour state of the residential building market. "We were all pretty stupid," Chadd said.
As the market slumped, Strategic Investment sent out rosy newsletters such as this from December 2006: "Does all the news about the declining housing market concern you? Maybe it scares you? ... We have a strong job market, healthy stock market, and a lot of opportunity. I believe that the media tends to make things seem worse then they really are. I am not delusional."
From the Stockton Record:
The 17-year-old duck-themed restaurant in the heart of Stockton's upscale Brookside development shut down suddenly after Sunday's busy brunch service, leaving a host of problems in its wake, including employees without paychecks, bounced checks, unpaid back rent and tax bills, and questions about prepaid deposits for upcoming holiday parties. "We were all shocked. We saw the sign on the door Monday morning," said Cecilia Turnage, a cashier at the Morgan Stanley financial services office a short walk from the restaurant at 3409 Brookside Road, just off March Lane.

For years, businesspeople from throughout Stockton would take clients to lunch at the restaurant, but Turnage said in recent months she'd noticed a drop in traffic in the shared parking lot. Mallard's owners admitted business was falling and attributed it to current poor economic conditions, including the housing slump. They pointed out that other area restaurants - notably Tony Roma's across Interstate 5 - had also closed without notice.


Gwynster said...

As I said on Buying Time's thread, at least 4 of the 19 "sales" in 95695 are transfer deeds back to the bank.

Diggin Deeper said...
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Diggin Deeper said...

As stated in a 12/06 newsletter

"I believe that the media tends to make things seem worse then they really are. I am not delusional."

As far as being delusional...hindsight is wonderful gift...

As an to love those double leveraged ETF puts on the financials, homebuilders, and the S&P. They really kicked some butt in the market today.

mesoholy said...

Hi Laura, are you still there?

HOUSE2008 said...

That's it! Moving to a new country. The U.S. is going into the toilet. Moving to NEW Mexico.....:)

Gwynster said...

Ben gets this spam from time to time - **delete** all gone

Bakersfield Bubble said...


Sippin is losing his shirt. :)


Don't leave yet, we are getting closer...soon the dollar and peso will be fact we might start seeing Americans climbing the "fence" to get into Mexico. :)

Gwynster said...

Hell, I'm wishing I had bought canadain dollars!

With the dollar tanking, what happens to all the northern boomers depending on canadian pharmacies to keep drug costs at bay?

Maybe Africa will be able to afford our crazily mark-up anti-virals?

The dollar tanking is a major gobal event. I think I'll be pouring a nice glass of something something when I get home and try to not think for a while.

Diggin Deeper said...
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Diggin Deeper said...

Smart money goes where's its best treated and for the longest time it's been thrashed here in the US.

The fallacy is that stock market and real estate have risen dramtically over the last four or five years creating the proverbial "wealth effect." True in actual total dollars... but in value it's another story. Accounting for the dollar's freefall in purchasing power over the same period, the truer picture reveals NO GROWTH. And when real estate prices fall like they are today, what was wealth yesterday, becomes debt burden today.

People who want to buy a home someday and have dollars for downpayments, should be very concerned about the dollar.

There are ways to hedge against its fall, to hedge against inflation, and to protect the purchasing power of the dollars being held. There are exchange traded funds on the NYSE for most developed foreign currencies. Everbank out of St Louis has innovative currency (and precious metals) products that allows one to park dollars for a short period of time into most any of the world's currencies.

The bottom line is to diversify and protect whatever assets you have for future real estate purchases. If the dollar continues to fall, which could happen, why hold them at all if there are other options?

Sittin' Out This One said...

Richard Nixon: "I am not a crook."

Strategic Investments: "I am not delusional"

Oprah Winfrey: "If you listen properly, people will tell you exactly who they are within the first 5 minutes of meeting them."

HOUSE2008 said...

diggin deeper, to sort of touch on what you mentoned about real wealth and it's true value. I was listening to a radio show the other day that compared the "masters of the universes" of today ( hedge fund managers, quant fund, ect) to the titan "Masters of the Universes" of yesterday like the Rockerfellers, Vanderbelts, Carnegie ect They left something to show for it. They built infrastucture like the R&R, & huge skyscrapers across America. In 2007 what has the new masters of the universes have to show for it? The Gov't invented the internet. As well as cable, fiber optics, microwave, Lcd, hell as rich as this country is we don't even have a high speed bullet train. (I think Tiawan even has one!) I guess it goes back to what you wer kinda saying they have no "real wealth" Their making paper. They are truly the Paper Kings. Look around you, what will "they" leave behind? That's why I also think as new countries start to develope, they'll add the new technologies to their infrastructure ( Bullet trains, Fiber optic lines higher internet speeds, education too ect) while we rely on our dated 1800-1940 infrastructure. So all hail to the Paper Kings!

SheWrestles said...


Today's guys are building debt, no doubt about it.