Wednesday, November 14, 2007

Stockton Median Home Price Down 31%; Anderson Caves to Rebate Demands

From the Stockton Record (hat tip spacebar):

According to TrendGraphix, the median selling price in San Joaquin County slipped from $325,000 in September to $319,000 last month. That was down almost 25 percent from a high of $425,000 in July 2006. Stockton's median selling price slid from $279,000 in September to $264,000 in October. That was down almost 31.4 percent from a high of $385,000 in January 2006.
...
Broker Bob Riggs of Riggs & Associates GMAC Real Estate said most of those looking and buying are investors and speculators looking for great deals...A traditional sale to a family moving into a house remains a rarity, he said.
...
Dave Thurman of Dave Thurman Real Estate in Stockton said the market still hasn't stabilized, because buyers feel they can buy only below market value...Thurman also bemoaned the ongoing negative news about the county's real estate market, which he said kills momentum. There is the positive news, he said, in that it's a great time for a first-time buyer to buy a home with prices between $100,000 and $150,000 less than two years ago.
From the Tri-Valley Herald:
On Oct. 22, Paseo West homeowner Dave Cantrell, a spokesman for the current homeowners, met with Anderson Homes owner Larry Anderson and chief financial officer Craig Barton. As a result of that meeting, the homeowners were offered a rebate, which they agreed to take. They also signed a confidentially agreement that precludes them from discussing the settlement. I'm not going to retire on it, Cantrell said of the payment. But what the heck — it helped take a little of the sting out if it.
...
Anderson initially refused the homeowners request for a rebate prior to the auction. In a letter to Cantrell he wrote, In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased. After the auction, that sentiment apparently changed. Cantrell said he thought Anderson went into the auction expecting to get 90 percent of their asking price and that the price difference was not going to be as bad. But at the Oct. 13 auction, homes sold for about 70 percent of the original asking prices. After they saw that difference, they wanted to save face, Cantrell said. They took a big hit, but not as big as us.
From the Vacaville Reporter:
Plans for an auction of homes Sunday in Vacaville has perturbed several residents of a local upscale housing development, who are concerned about the potential effect on their property values. With help from Accelerated Marketing Partners, Pleasant Hill-based developer DeNova Homes is auctioning 18 of the houses in its Meadow Woods subdivision.
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"We expect anywhere between a $200,000 to a $300,000 decrease in our property values overnight," said Meadow Woods resident Brian McLean...[T]he minimum selling prices in the auction range from $450,000 to $650,000 and the previous pricing on these homes ranged from $718,000 to $939,900.
...
"Anderson ended up going back to the existing homeowners and providing a good-faith rebate in that situation," McLean said, adding, "We're asking (DeNova) to step up to the plate and live up to the slogans." In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction. The response from Sanson was brief. "I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter," he wrote.
From the Stockton Record (hat tip spacebar):
The San Joaquin County Sheriff's Office on Tuesday arrested five people and was searching for two others in the theft of appliances from vacant homes. The arrests were aided by Global Positioning System devices that the home builder KB Home had begun installing in appliances after a rash of similar thefts, the Sheriff's Office reported.
From the Associated Press:
Wachovia Corp. on Wednesday defended its $24 billion purchase last year of one of the country's largest mortgage lenders [Golden West], saying it "didn't anticipate" a housing-market slump that has led to delinquencies, defaults and bankruptcies at mortgage lenders nationwide. But general bank president Ben Jenkins added that "no one else did" either.
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Last week, the bank said in a filing with the Securities and Exchange Commission that "the expected credit deterioration will likely be focused in certain geographic areas that have recently experienced dramatic declines in housing values." At that time, Wachovia's Chief Risk Officer Don Truslow said two areas of concern were in certain markets in California and Florida. Jenkins on Wednesday said the markets in California affected are the state's Central Valley and Inland Empire.

19 comments:

andnee said...

I want money back for every stupid decision I have ever made in the face of overwhelming evidence that it was foolish. I want no responsibility foisted upon poor me.

We are going to hell in a handbasket, the builder should have told those people to Blow. The fact they gave them money back just makes me unbelievably angry. Once again being prudent and responsible has no upside to it, because being a moron is always rewarded in our society.

Sigh

smf said...

"Broker Bob Riggs of Riggs & Associates GMAC Real Estate said most of those looking and buying are investors and speculators looking for great deals...A traditional sale to a family moving into a house remains a rarity, he said."

Yes, finally a bit of confirmation! I have repeated, that even though we have very low sales right now, it is mostly to morons that are waiting for the market to come back up next year.

Listen, much like the .com, the prices will NEVER hit the same level they did in our lifetime.

rocklin renter said...

Listen, much like the .com, the prices will NEVER hit the same level they did in our lifetime.

Caveat: on an inflation-adjusted basis.

smf said...

Caveat: on an inflation-adjusted basis.

Or a 10X income basis.

Sippn said...

If you could close the borders and the ports - and they will be flowing through the ports - you might be right.

There's a few billion people over there in Asia that with a little industry, will gather enough dollars to send a small fraction of a percentage of them here - starting soon after the Olympics is my guess.

Your ability to afford a home is not their concern.

Chuck Ponzi said...

Sippn,

Don't you have an internal voice telling you not to say things like that?

You're really grasping at straws now.

It's.

Over.

Sorry.

Chuck Ponzi
www.socalbubble.com

Sippn said...

what I really meant to say is I love the GPS stuff!

Diggin Deeper said...

"Thurman also bemoaned the ongoing negative news about the county's real estate market, which he said kills momentum"

What momentum? The only momentum is moving opposite to the general realty "spin" machine...on all cylinders.

Sippn...I believe you're right about foreign investment but they'll either have to physically take possession of those homes or the problem remains the same.

Have you ever dealt with those you're saying will fill the void? If you have, to infer that they will pay the price just because we won't, is pure BS. Asians, in general, are very frugile, very good at deal making, and rarely pay top dollar for anything.

The problem is much bigger than too many homes for too few people.
Growth here was built on false premises and depended upon x number of people occupying y number of homes. Inventory, infrastructure, and services were added handle the projected increase. Sadly, that didn't happen and now we have excess services supplying fewer people (ie the San Juan school district problems.)

Forget about adding in the bogus growth created by giving people keys to homes they had no business owning.

There's no overnight fix to this problem. It will take either, an immediate rise in head count, or a "shake out" to bring the local economy back to equilibrium. I kind of doubt the former is in the cards....

Diggin Deeper said...

http://www.reuters.com/article/marketsNews/idUKN1530003920071115?rpc=44

UPDATE 1-Wells Fargo: Housing worst since Great Depression

Per the President of WF...

"We have not seen a nationwide decline in housing like this since the Great Depression," Stumpf said at a Merrill Lynch & Co banking conference in New York."

And you wonder why Dave Thurman can't get any traction because of bad press...

smf said...

I now recall how very similar this bubble was to the .com bubble. There is a term called 'dark fiber' from all the excess fiber optics added by companies that assumed that growth rate would remain steady for a while.

That excess capacity is still there, 7 years after the high.

I doubt the excess housing will disappear soon.

There's a few billion people over there in Asia that with a little industry, will gather enough dollars to send a small fraction of a percentage of them here

That assumes that they will have far more money than us here. And to say the least, Asia is also having their own issues with a housing bubble.

Diggin Deeper said...

Is there any effort by the city to lure businesses to Sacramento? A little proactive forethought might be necessary to help fill all those empty homes and schools. There's a well educated population with a fairly reasonable median income that should be attractive to new businesses. It would take incentives but just doing nothing will just add to the problems.

norcaljeff said...

I don't buy that foreign investment BS line. Look at the facts. In Florida, the British and other Euros came over and bought up the place with a British Pound which rose 40% and the Euro that rose 50%to the Dollar. Real estate skyrocketed and yet it has collapsed with the rest of the market. The Dollar continues to fall while world currency goes straight up and yet real estate is still plummeting. If it's such a deal to buy, why are prices still falling which currencies are still very strong? These are the same lame arguments realtors made about the bay area buyers coming to the valley propping up RE. What happened to that? There’s no basis for these claims. Obviously economics class wasn't a priortiy to most in this industry.

Diggin Deeper said...

The Chinese would have to remove their currency peg to the dollar, and allow the yuan to rise, before there would be any net affect on their ability to purchase real estate here.

However, let's not forget the buying binge the Japanes went on in the 80's (regardless of what happened in Japan thereafter) or the Hong Kong explosion that occurred in Vancouver, BC. during the 90's. When the dollar is as cheap as it is right now, stronger currencies will find some value in owning US hard assets like real estate. Will it make much of a difference? Based on all the open inventory across the US, it would take one helluva lot buying to change the overall outlook.

Now the question...Let's say that foreign buying does increase. Will Sacramento be a preferred location to buy in or will that money stick to the more attractive locations like NYC, Miami, LA, or ?

smf said...

The only way that foreigners buying RE would help would be if the buy for the express purpose of living in their purchase, w/o renting it.

There is an excess of housing, and no buying would remove that excess. It may even make the problem larger if builders and others assume that foreigners buying spree would be permanent.

And let us not forget how much money the Japanese ended up losing after their binge.

Gwynster said...

I posted something about needing people to live in those foriegn-purchased homes but apparently it was eaten.

These people need renters and our pool of renters is diminishing.

Case in point, the lovely couple that let their home be forclosed on in Aug. moved into a rental. It's just in another state where the husband could find work as a cabinet maker.

How many people in the area are hanging on by their fingernails with the only thing keeping them here is the house? I think a lot of them.

Diggin Deeper said...

"The Grapes of Wrath" in reverse.

All one has to do is look at real estate prices(or rents for that matter)in the Carolinas or the deep south, or parts of the Midwest, and one can make a good case for outbound migration. And this being a govt. town, I wonder if median wages are nearly the same?

Gwynster said...

Diggin,

As someone who has been looking long and hard at this data - yes.

We began looking at the "reverse dustbowl" as a migration pattern in '02.

Cmyst said...

In my field, California, New York and Florida are the top paying areas.
There would be a dramatic drop to my income were I to move to the South or Midwest. Cooling/heating costs are pretty high in the Midwest, and food costs are about the same. Gas is cheaper (but I work where I live).
My children are another matter, however. They could earn the same amount as they earn here, and their housing costs would be a lot less. They do think about moving.

SheWrestles said...

They should build old-fashioned, middle America neighborhoods here - spacious homes on large lots located on wide, tree-lined streets.