'The hype about the housing market is running out of gas'

From Inman News:

Tamara Dawn, a real estate broker in Sacramento, Calif., compiled statistics for Sacramento County which show that REO sales and short sales -- which are sales of homes in which the sale price falls short of what the homeowner still owes on the mortgage -- accounted for about 26.3 percent of total sales in the county from May 7 through Nov. 7.

A short sale can assist a homeowner in avoiding foreclosure and can be less costly for a lender than taking ownership of the property. Short-sale transactions can take more effort and time than typical real estate transactions, as they typically require extensive paperwork and can take weeks to receive a decision back from the lender on whether to approve or reject the terms of the sale.

REOs alone accounted for 22.5 percent of total sales in Sacramento County during the May 7-Nov. 7 period, and REO sales accounted for 35.8 percent of total sales in the county from Oct. 7 through Nov. 7.

As of Nov. 7, about 52.7 percent of all pending sales for the previous 30 days in Sacramento County were related to short-sale and REO transactions, while about 46.6 percent of all active listings on Nov. 7 involved short-sale and REO properties.

From the Sacramento Bee:

Hopes for an office tower and high-rise housing at Eighth and I streets downtown have been dashed again. The CIM Group, a Hollywood-based developer, has opted out of its plans to buy the parcel, raze the existing building and build a new one, says Rob Leonard, economic development director for Sacramento County, which owns the site. CIM's move follows a similar decision last year by Texas home builder D.R. Horton to abandon its plans for a 21-story "Library Lofts" project at the same site.

Leonard says CIM's decision was a "sign of the (weakening real estate) market" and an indication that CIM is focusing on other local projects, including a joint venture with CalPERS at the former John Saca high-rise condo site at Third and Capitol Mall.

From the Stockton Record:

A couple of top bidders in a no-minimum-bid auction of foreclosed homes nearly a month ago in Stockton are not only unhappy that banks didn't accept their bids or even negotiate a sale, they haven't gotten back thousands of dollars in deposits. "It was a waste of my time," said Lewis Stallworth Jr., a Stockton man who put in a top bid of $135,000 for a north Stockton house. "I feel like it was almost a scam. There's no use in going to an auction if they're going to act like that."
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"I'm kind of sorry I got into this, to tell you the truth," [Mel] Schell said. "It's been way too long." Miller said the auction deceptively implied most bids would be accepted. Plus, several weeks after the auction is too long not to hear anything, she said. "It seems like sort of a fiasco," she said.
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Dave Webb, a Hudson & Marshall partner, said...typically, either deals are to be made within 30 days, or deposits are returned quickly enough....But some of the large banks or asset managers don't move quickly, Webb said.

From the Redding Record Searchlight (hat tip Suzanne):

The nation's largest savings and loan closed its Redding office on Hemsted Drive on Monday. Washington Mutual's home loan center in Redding had four employees. One will be retained by the company, spokesman Greg Kischner said Tuesday. The company also closed its home loan centers in Chico and Yuba City, which had 11 employees between them, four of whom will stay on with Washington Mutual.
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This is at least the second reported home loan business in Redding to close since September. National City Mortgage, also citing woes in the housing market, closed Sept. 26. The Churn Creek Road office had five employees.
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In Shasta County, Benchmark Real Estate Mortgage, First Mortgage Corp., Frost Financial Mortgage, Santa Cruz Mortgage and Mission Hills Mortgage have closed.

From the Anderson Valley Post (hat tip Suzanne):

The Vineyards housing development in Anderson has lain relatively dormant for several months. The plan by developer Sanderson Communities entails 2,500 acres to contain 5,500 units in the hills behind Wal-Mart on Rhonda Road. No construction that requires building inspections has been done at The Vineyards since July.
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Roger White, vice president of development at Sanderson Communities...said that houses on 95 lots would be ready for construction by March, but only a few houses would actually be built until the housing market improves. “The hype about the housing market is running out of gas,” White said. “People are still having babies and are still interested in this area.”

From the LA Times:

Gov. Arnold Schwarzenegger told social service advocates Tuesday that the state's anticipated budget shortfall -- already feared to be the worst since he took office -- has widened to $14 billion, according to people at the meetings.

That new figure indicates that the state's fiscal fortunes are declining even more rapidly than many leaders had expected. Less than a month ago, the Legislature's chief budget analyst calculated that California is on track to come up $10 billion short by June 2009, when the state ends its next fiscal year.

A $14-billion budget gap would translate to more than 12% of the state's budget if spending continues to rise as projected. Legislative Analyst Elizabeth Hill last month urged legislators to consider getting rid of state programs created in recent years, abolishing tax breaks, raising taxes and reducing benefits for the recipients of government programs.