Wednesday, November 21, 2007

NAR: Sacramento Price Decline 2nd Largest in Nation

From Bloomberg:

Prices dropped in 54 of 150 metropolitan areas in the third quarter and the median sales price tumbled 2 percent nationwide, the National Association of Realtors said today.
...
Palm Bay, Florida, had the biggest price decline in the third quarter, tumbling 12.4 percent from a year earlier. Sacramento, California, fell 10.5 percent and Sarasota, Florida, dropped 10.4 percent.
NAR Report [xls]

From the Central Valley Business Times:
Despite hundreds of homes being sold at foreclosure and builder auctions, home prices are still so high that most areas of California and even the Central Valley have some of the least affordable homes in the nation, according to figures compiled for the California Building Industry Association.
...
On a statewide basis, just 12.6 percent of all the homes sold could be afforded by a median-income family, up slightly from 11.7 percent in the second quarter.
...
Merced, which was the nation’s third least affordable area in the spring, is now ranked ninth, with 7.4 percent of its homes “affordable.” Modesto, which was 10th in the second quarter, is 14th in the third quarter, with 9.7 percent of homes priced as affordable. Stockton, which had been 15th, has moved to 22nd least affordable with 11.3 percent of homes in the affordable range, the CBIA says. Sacramento is now 29th in the nation. It had been tied for 25th in the second quarter. The report says 17.2 percent of the homes for sale in Sacramento were affordable in the third quarter.
...
Robert Rivinius, CBIA’s president and CEO, says the fact that affordability has not increased dramatically despite a housing downturn that has lasted over a year is “ample proof” that market corrections alone are not likely to allow the hundreds of thousands of Californians priced out of homeownership to be able to buy their first homes.

15 comments:

Patient Renter said...

"On a statewide basis, just 12.6 percent of all the homes sold could be afforded by a median-income family, up slightly from 11.7 percent in the second quarter."

I recall this time last year when the media didn't even care about silly things like affordability based on median income. They were right there next to everyone else, cheering on the bubble.

Diggin Deeper said...

And while non-discretionary prices creep up affordability deteriorates little by little. Raising wages is the only way to stop the bleeding but that won't happen if the area falls into a recession. We are setting for no growth coupled with higher inflation or as coined in the 70's...stagflation. It's happened before and it looks like we're headed that way once again.

Cow_tipping said...

Oh ... wait, I thought the gay people were going to prop up the market.
And 12% down. Why, the flippers in trouble haven't got the memo then, they are all selling for 20% to 45% less. Someone should tell them that they are just giving it away. Oh wait, they cant give it awya at 45% you say. well there must be somehting wrong. The governator will be there to freeze it.
Cool.
Cow_tipping.

Buying Time said...

Affordable homes and reasonable taxes for those purchasing them...see the WSJ article on one Elk Grove couple'e experience:

http://online.wsj.com/article/SB119561637725500252.html

Our property tax system exacerbates the affordability issue since it tends to tax newer purchases more heavily.

SacramentoCrash said...

The price drops are double the average in bubble areas like FloodToMas and Elk Grove.

HOUSE2008 said...

Price Drop? That's an understatement. I just saw a house that I've been watching go from 454K down to 374K..in three months. No buyers even at that price for a 5/4 2800sqft ect...ouch. Yup I'm waiting...

HOUSE2008 said...

Also I went to go oogle at the Tapestri Square Brownstones on T street today. Can you believe the largest model is going for 850K! No joke. Oh I'll give it proprs & applause for the interior looks something out of the movies. I half expected Tom Cruise to xome around the corner. Couple of gripes about those

1. By pricing them that high thy've pretty much sucked out all appreciative value from the home for the next 12-20 yrs. Which contradicts #2.
2. Future owners WILL make the bottom a rental and thus goes the home vaalues along with parking in the near future.
3. As for this being for "empty nesters" well, for one I don't think an older couple will want to climb three flights of stairs much less "downsize" to a 2800 sf home.
4 If this is for "empty nesters" where is the mini park for the grand baby's? There is none. So one has to get in thier car & drive ta a park...
5. Last but not least. Who can qualify for a 850K home? 2% in Sacramento? You know what you can get for 850k? Or the MUCH less the 450k 1320 sqft model that they're asking for?

Sorry for the rant but in terms of price watch these DROP like a ROCK. Sheesh I went to them hoping for a little good news...

Cmyst said...

Recently I overlooked 2 homes of the type that I track because my pricing parameters were set too high and they flew in under the radar.
Likewise, I've been tracking homes under 300k in select areas (i.e. NOT Oak Park, Del Paso Heights, Norwood, Rio Linda etc. where one expects to find cheaper homes). 2 years ago there were none, 1 year ago there were about 10. Today, there are 87.

Cmyst said...

house2008:
You are correct. No matter how great the house, I'm not buying unless it is all on one level.
I love the design, but I wouldn't want to live there.

SheWrestles said...

Diggin' - Could it really take another 20+ years for the area to truly begin growing again?

bubblemachine said...

I went to go oogle at the Tapestri Square Brownstones on T street today. Can you believe the largest model is going for 850K!

I drive up 21st Street every week, so I have seen this project from the beginning. The first thing I noticed was that the whole property is way below 21st Street.

Does anyone remember the February 1986 storm that dumped 10 inches of rain on Sacramento in 11 days. Water was coming OUT of flood drains and flooding many of the lower areas.

All the garages (ground floor) will be under water in the next flood. Store your boat in the garage, not your car. LOL

There was a long delay before they actually started building anything, and I thought maybe the developer ran out of money.

Then they started erecting cheap looking rectangular buildings out of wood and tar paper, but I had no idea what the project was until reading about it here.

Diggin Deeper said...

She....that depends. As I've posted before, the Japanese are just starting to come out of their housing "recession". It's lasted 16-17 years. Anything's possible when a country becomes so cavalier about credit and "free" money policies.

Cow_tipping said...

She - US will crash fast, not neccesarily like japan. They have huge +savings rates we have -savings, they have more of a feeling of responsibility, and they actually have a family name concept that they believe needs to be preserved. In the US we dont.
My thoughts, if it crashes fast - like in 1-2 years to bottom, it will recover a little before seriously crashing starting 2015 due to boomers retiring. 2015 and later will be a slower crash lasting years, and northern US will be hit far worse than south. if this crash isn't done and dusted by 2012, the 2 crashes will merge into a 40 years down slide. Just an uneducated guess.
Cool.
Cow_tipping.

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HOUSE2008 said...

bubblemachine...
"Does anyone remember the February
1986 storm that dumped 10 inches of rain on Sacramento in 11 days. Water was coming OUT of flood drains and flooding many of the lower areas."

Thanks for the reminder! It's sometimes escapes my memory and can get quite confusing trying to remeber everything during the home process. The real kicker is it's rarely the water that does the homes in. It's the leaves! I can't tell you HOW MANY times I've driven down S,T,U,V, street and found the roads flooded after a "medium" rain due to insufficient drainage. It's instances like these when someone has bought a home usually followed by a comment " I didn't see that coming"..