OFHEO: Another Record Drop for Sacramento Home Prices

From Bloomberg:

U.S. home prices had their biggest fourth quarter decline since 1991, according to a report [pdf] by the Office of Federal Housing Enterprise Oversight released today.
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California, with a decline of 6.6 percent, led all states, Ofheo said. It was followed by Nevada (5.9 percent), Florida (4.7 percent) and Michigan (4.3 percent). All 20 areas with the greatest price declines in 2007 were in those four states, according to Ofheo. The top three were in California: Merced (19 percent), Modesto (15.5 percent), and Stockton (15.3 percent), Ofheo said.

The Sacramento region came in at #12 with a record 11.0 percent year-over-year drop, the first double-digit decline in the index's history. With that, every price index now shows double-digit depreciation.

From the Sacramento Business Journal:

Sacramento-area's median home price fell 28.3 percent in January from a year ago, as a flood of homes enter the market. The four-county region's median home price -- meaning half the homes sold for more, the other half for less -- dropped to $258,230....

From the Sacramento Bee:

Sacramento County has sued embattled home builder Reynen & Bardis for failing to replace 500 mature oaks it cut down to make way for houses in Rancho Murieta. The county's lawsuit, filed Friday, adds to the legal and financial troubles facing Reynen & Bardis, which just a few years ago was aggressively buying land in the Central Valley but is now struggling to survive. The local company has stopped building houses and laid off half its employees.

From the Sacramento Bee:

The slowed demand for building materials can be seen in the U.S. consumption of dimension stone – the term for granite, marble, slate and other stone used in construction. Consumption rose 26 percent in 2004 from 2003, but just 5 percent in 2007 from 2006, according to the U.S. Geological Survey. Consequently, manufacturers and suppliers are competing fiercely for the remaining business and driving down prices, according to Cleveland-based market analysts, The Freedonia Group Inc.

The cost of prefabricated granite has dropped considerably from the building boom highs of four years ago – as much as 50 percent or more, said Cheryl Tarido, a sales associate at Medimer Marble & Granite, a Sacramento company that provides granite and limestone for general contractors and commercial and residential clients.

From CBS13:

In a new twist on the housing crisis, homeowners are being sued by landscapers and contractors after the property builders go bankrupt. If features like fountains and concrete foundations have not been paid for, the contractors are increasingly going after the homeowners for the balance.

The Petree family paid $450,000 for their Dunmore home right before the builder went bankrupt. "Within 24 hours of closing escrow, we had four liens on our property," Kathleen Petree said. "Within 30 days, we had 17, and last I checked, we have 28 liens on our property."

From the Central Valley Business Times:

California and Florida metro areas accounted for eight of the top 10 metro foreclosure rates in January...The Stockton metro area in the Central Valley documented the second highest metro foreclosure rate. Other California metro areas in the top 10 were Riverside-San Bernardino at No. 3, Modesto at No. 4, Merced at No. 5, Vallejo-Fairfield at No. 7 and Bakersfield at No. 9.

From the New York Times:

Seattle, which has nowhere near the kind of foreclosure problem other cities have, began a modest program last month offering loans of up to $5,000 to help a few dozen homeowners avoid losing their homes...[N]o sooner had Mayor Greg Nickels announced the program than opposition surfaced...Mark Ellerbrook, who manages Seattle’s homeownership program, said that, aside from residents hoping to apply, few people were enthusiastic about the program. He said he understood that reaction, given the local housing market. “People struggle to buy homes in this city, for sure,” Mr. Ellerbrook said. “And then you have what looks, on the face of it, like the city giving money to people who made bad decisions.”
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In California, the notion of a government loan program seems remote to some state leaders, given how big such a fund would have to be and that California’s budget deficit is larger than most state budgets. State Senator Michael Machado, a Democrat who is chairman of the Senate Committee on Banking, Finance and Insurance, is from Stockton, where the foreclosure rate increased 271 percent in 2007. “If they got into a situation that got bad for them, they need to live through that and they shouldn’t expect government to bail them out,” he said, summarizing what he says is a commonly held view. “And when you’re dealing with a $14.5 billion deficit like we are here in California, it’s difficult to do that anyway.”

From Reuters:

Years of double-digit price gains put homes out of the reach of many consumers, and a correction is necessary...[Robert] Shiller said it can't be all or nothing, and that there has been a big misperception that houses will constantly appreciate. "Some times people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn't add up," he said. "You either have high home prices or lower home prices and lower home prices are what we want, and people shouldn't be afraid of that," said Shiller. "Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices. We want economic growth, we don't want high home prices."

From KCRA: