Sacramento Real Estate Market - March 2008 Water Cooler
Sacramento Land(ing) will experience a short hiatus as I travel over the next week and a half. Please help your fellow readers by posting links to news articles about the Sacramento real estate market in the comments below. Please read the comment policy before posting.
You can also follow the Sacramento real estate market on The Housing Bubble blog's California thread. For commentary and statistics on Sacramento's real estate market, try the Sacramento Real Estate Statistics blog and the Average Buyer blog. To be notified when posting resumes, subscribe to Sacramento Land(ing)'s site feed here.
I wanted to thank you all for the numerous links, tips, and photos that I regularly receive. Although I don't always get the chance to respond, I do appreciate your contributions. Speaking of which, here's a photo sent in by reader LL. Thanks!
78 comments:
"Eroding equity has laid bare scams that went unreported in the days of big profits and fast money. Meanwhile, new hucksters are preying on those facing hard times, detectives say."
Sacramento realty fraud unit's funds decline; complaints rise
"Stockton experienced a 34 percent decline in the median price of single family homes in 2007, leading banks to offer deep discounts on foreclosed houses.
One home on Ornella Drive that sold two years ago for $510,000 is now listed at $287,850. The $222,000 discount attracted multiple offers.
Some real estate professionals believe the housing market is finally beginning to stabilize."
Stockton Foreclosure Headlines Good News for Some
Don't they have wi-fi on the road? lol j/k Thanks for all your work, I'm sure you're so ready to get away from the RE world for a while, you deserve it.
Free?! What a rip-off! LOL
Hi all,
Been a while since I posted.
But I do appreciate all the dialogue here, becase it helps me gauge (or read between the bull@&#$) to assess the state of the market just as well as any graph or MLS Stat.
Anyway, just wanted to chime in on retail and office vacancy.
City of Auburn: two local banks will not loan on any more office product - there are two office buildings that are completel vacant (20,000 SF each), and another in the oven.
You all know the story with Rocklin and Roseville.
And we have been keeping track on certain markets between Calaveras and Butte County (and that is alot of area), and retail is really in the dumper. Markets with typical vacancy in the 10% RANGE are now in the 13-15% range, and it doesn't matter if it is strip retail or downtown historic district. Everyone is hurting.
I don't mean to cut to the chase - but here is what I have always thought about what is on its way:
What do you get when you combine reduced consumer spending and job loss and zero growth (i.e., recession) with increasing interest rates. What we have here is not a liquidity crisis - it is a credit crisis. THe banks have the money - but there are much more cautious now about lending it out to anyone.
I think the proper term for where we are headed is called: STAGFLATION
and several of us here have been through that before.
Dead cat bounce or not - interest rates are going up. Bernanke has no control at this point - no corrolation between the rates. Prices will come down a bit more. More homes will come on the market as the year spins out - and These banks that are relisting properties at higher prices right now because they think we have hit bottom and sprung upward will be sorely mistaken.
Thats my take. Thanks again to everyone for their hard work.
BTW - I am actively checking on listings everywhere from Lincoln to Fair Oaks - and there is a light frenzy going on right now. But there is just no way that this stimulus is going to work - and the ending days of the home ATM machine is really going to pound this economy further. I am not convinced at this point we are done.
Elk Grove board issues layoff notices for 217 school jobs
http://tinyurl.com/27avkh
'The board's move Tuesday night comes as the state plans to cut $4.8 billion from education. Elk Grove Unified, for its part, faces a state funding shortfall of $25 million for the 2008-09 school year. Personnel is the largest district expenditure.'
"Bernanke has no control at this point - no corrolation between the rates."
It's all window dressing from here. The Fed cuts rates, the bond market shrugs, and rates go up to prop up the dollar and "hopefully" cool commodity prices down.
"U.S. productivity revised up but labor costs mount"
http://news.yahoo.com/s/nm/20080305/bs_nm/usa_economy_productivity_dc_1
"The Labor Department said that compensation per hour was revised higher to a 4.6 percent rate from 3.9 percent previously estimated. But adjusted for inflation, hourly compensation fell 0.5 percent."
One of the great features of our past low inflation, low interest rate economy was an ability to out produce the effects of inflation. As long as we were doing more with less, we were able to maneuver and offset the higher costs of doing business. In a vibrant growth economy this works.
There's only so much productivity improvement left in the US worker. Without advancing technology to the next level, I think this cushion has been about tapped out. US business will have no choice but to pare down workforces in order to maintain competitive levels.
Without advancing gains in the productivity component, costs will pass through to the consumer quicker than they have in the past.
Higher rates are needed but will hurt the real estate market that's already been crushed.
As Maestro "Bubble" would say, "it's a conundrum"
Stagflation: Even if the Economy Stagnates, Your Investments Don't Have to do the Same
http://www.moneymorning.com/2008/03/05/stagflation-even-if-the-economy-stagnates-your-investments-dont-have-to-do-the-same/
A pretty good primer on the history of stagflation...
Apparently March is "Foreclosure Prevention Month"
"Most families had similar tales of woe. One couple said the same broker who had written their loan in 2005 promising he would help them refinance it to a 30-year fixed rate when the teaser rate of two percent expired refused to take their calls. Their mortgage on a $300,000 house mushroomed from about $900 to over $2,000."
Families flock to foreclosure fairs
More news from Stockton:
"A measure to address one byproduct of the housing market's collapse - the overgrown yards, stagnant swimming pools and general disrepair of an increasing stock of vacant houses - was removed Tuesday from the City Council's agenda, referred to the council's legislative panel for review."
Cleanup ordinance on hold
Ok who in the world thought you could get a 300k mortgage for 900 mo? P&I on 300k for 30 fixed is $1800. Add tax and ins and it's well over 2k a month. To get a $900 a month P&I payment, they would have had to put down at least 50%.
Gwyn...It must have been one those "pick your payment" loans. They were incredibly enticing at the height of the boom.
"Some real estate professionals believe the housing market is finally beginning to stabilize."
No doubt the same professional who were incapable of recognizing that the market would ever decline in the first place.
Diggn: Do you get the same dirty taste in your mouth when you hear a reporter use the word "stagflation" as if it's some new discovery they've just made that all of us should be impressed with? (i think my problem is that i just loathe reporters)
PR...For the most part, I think it has to do with overall reporting experience. Most reporters that have 15 years or less haven't had the need to know that inflaion, much less stagflation, ever existed. All they've known is "Greenspeak" and the bubbles that have ensued since he was Fed Chairman. Kind of a glorious "All in the name of excess."
I guess my beef is with the article its self. There is no way that couple can be helped because no one in their right mind will give another 2% loan. The $1800 was figured at 6.%. There are families out there that would be thrilled to get a 6% fixed but instead the author focuses on some whining couple crying because they can't get a 2% or 3% fixed? Cry me a freaking river....
I think DD is right in that so many of the people writing these articles have no idea what real markets look like. I always thought of them as being rather Hobbsian.
From dBusinessNews:
"The business environment for the six-county Sacramento region will remain strong over the next seven years, according to an economic study released at the Sacramento Metro Chamber's fourth Regional Economic Forum on Feb. 29."
"Construction and real estate, which have led the region, can now be expected to slow down for some time. But, as Svennson said, there was "a lot of good news to share" from the report and conclusions that can be drawn from it show that the "Sacramento region is in the forefront" for the development of a major expansion."
Sacramento region set for strong growth over next 7 years
spacebar...thanks for the positive report on Sacramento's dynamic growth prospects...the only part of the article that really struck home was the line..."once it deals with the current economic conditions."
Here's an interesting development. One of my partners manages a distributor of steel products for a US manufacturer we represent in 11 western states. Quite a bit of our manufacturer's inventory comes in from China, gets inspected, and then moves on to distributors who sell throughout the region.
We just received notice that we're having to post a fairly substantial increase in pricing on all shipments from China after April 1 of this year. But the real catch is the Chinese manufacturers are requesting our US manufacturer to pay them in Yen rather than dollars. Seems that dollar has lost so much so fast, that even the little guys on the street in China don't want them any more. They fear that by the time they put those dollars back to work, they'll be worth even less and their costs will escalate even further....
No wonder gold is within a whisker of $1000 oz and oil pushed over $104 today...
Oh darn, FHA loan limites being raised tommorrow (OCResister)
"From HUD’s release, here is a list of each county in California, with the median home price and the new FHA limit on the far right. HUD tomorrow is expected to release limits for areas in other states.
". . .Sacramento County (incl surrounding counties)
$464000 (median price) $580000 (new limit) "
That will loosen up the jumbos a little. . .
Let's see $145K down on a $725K priced home; finally a loan for the masses!
Remember those new jumbos still have a DTI requirement of 29% and 20% down.
Here's how it will help generally....
FHA can now fund up to $580K, approx double? from before, INCREASING the supply of money for loans. That means the investors that have been funding in these ranges will be pushed into higher ranges, increasing the supply of money there also
THis is good for market and price stabilization, starting to fill the void left by wall street last August...do I make sense?
Lander, ur gone for only seconds and look, I'm hijacking the thing! SOrry, just the timing of news.
Gwyn - per the Bee this week .... 1 in 14 state workers making over $100K
LOL Sippin,
So sorry, not even close. Well maybe if you only count the correctional facility employees.
Nice try on the Spin though but not up to your usual level.
/yawns
Heard this story on the tidbit radio news blurbs this morning:
http://tinyurl.com/2e695j
In the SacBee under "Dunmore matriarch sues grandsons, alleges pressure over loans".
Oh, God...
Here I am, a good bubblehead, putting our home for sale...
sigh...
Indeed, it looks like we found a home that we like, and works for us in the looooong term.
Excited and scared at the same time.
smf...
Congratulations. Keep us posted on the activity of your sale. From what I understand there's quite a bit of activity (lookers)right now. Whether they are buying or not I guess the numbers will tell in the next couple of months.
What prompted the sudden decision?
DD -
Will keep you all posted.
The decision was prompted by a situation that doesn't happen very often:
We walked into the house and found that we would not change anything about it.
And it would be a looong term house. The school is within walking distance. And with a 8 month old baby you can do the math.
From The Bakersfield Californian:
"Hidden Grove’s future and that of at least seven other local Reynen & Bardis projects in Bakersfield, Wasco and Shafter are up in the air as the homebuilder’s finances teeter."
Sacramento developer's projects here uncertain
also from The Bakersfield Californian:
"A $74 million loan to Irvine-based developer SunCal Cos. for a major housing project in Shafter was foreclosed on Wednesday morning at a public auction on City Hall steps.
SunCal’s outstanding debt to national homebuilder Lennar Corp. had reached almost $86 million with interest and fees by auction time. Opening bids for the 515-acre site started at $10 million. No one made an offer, so the property went back to Lennar."
Big foreclosures close quietly
with auction photo at Money Talks blog
"Gwyn - per the Bee this week .... 1 in 14 state workers making over $100K"
Wow, I dunno about that, but at my workplace (I work around state employees) that tool that lets you look up any state employee's salary has been a real eye opener, to say the least.
Who knew you could make 80k, with pension, benefits, etc. as a professional solitaire player.
smf: that's great to hear. walking into a house and not wanting to change anything would be pretty rare indeed. i hope it works out for you.
Here's my little *wow* tidbit of the day:
"Americans' percentage of equity in their homes fell below 50 percent for the first time on record since 1945, the Federal Reserve said Thursday. Homeowners' portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter -- the third straight quarter it was under 50 percent.
That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945."
Well I know the salaries here and in most of the UC depts- it's part of what I do. Y'all in Sacramento get paid a lot more then us in Davis apparently.
The best part of that SacBee link was looking up my ex-husbands salary. I feel pretty damn good now >; )
PR... read the same article...this little exerpt had some teeth.
"Moody's Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be "upside down" if prices fall 20percent from their peak."
The stock and credit markets are really starting to falter again. It appears that no credit is getting to be the mantra of the lenders. Margin calls are killing Thornburg Mortgage and the Carlyle Group. A couple of weeks ago Thornburg, whose debt quality is excellent, was riding a $12 stock price. Today it's under $2 and about to fail.
Could it be we're headed for the sequel to the August credit meltdown...?
While everyone expects the Fed to step in and lower rates, we might just see another emergency cut by early next week.
"Y'all in Sacramento get paid a lot more then us in Davis apparently."
A lot of us were pretty stunned to find out what some of the folks around here make, so - I think it might depend on the state agency. Maybe it's the "revenue generating" agencies that do the best. Shoot me an e-mail if you're curious.
"Could it be we're headed for the sequel to the August credit meltdown...?"
Oh yea, I think August was way over-dramatized and will pale in comparison to leverage unwindings...
"While everyone expects the Fed to step in and lower rates, we might just see another emergency cut by early next week."
Fine with me. My gold likes it.
PR--
The reason the equity issue is so important is that one would think that there would be a lot of people who would be close to paying off the mortgage, given the number of workers who are close to retirement. Two things occur: the houses older workers own are worth a lot less than those owned by younger people. The second possibility is that older workers traded up during the bubble and, while they paid more up front, it wasn't enough to offset the price declines.
"Who knew you could make 80k, with pension, benefits, etc. as a professional solitaire player."
What would it take for an audit to be done on the salaries and job duties of some of our state employees? The comment above essentially describes where our tax dollars are going, and at the expense of our children's education.
From the Tracy Press:
"It’ll be tougher to convert apartments into condominiums in Tracy after the City Council passed new rules tonight, but whether that scuttles the city’s biggest apartments’ plans to go condo remains to be seen."
"Sycamore Village is the biggest apartment complex in Tracy with 324 units, roughly 15 percent of the city’s total number, said city planner Victoria Lombardo. It asked in April 2007 to convert apartments to condos.
Those condos are on hold until the housing market reverses its nosedive, Oesterreich said."
Council toughens condo policy
From The Sacramento Bee:
"Just as springtime stories start popping up about busy real estate agents and multiple offers on Sacramento-area homes, here's the Mortgage Bankers Association with a cold splash of water.
No one in California will see signs of a housing market "bottom" until the pace of rising foreclosure activity begins to slow, according to MBA chief economist Doug Duncan. And the newest numbers show that activity gained speed in the last quarter of 2007.
Thanks to Florida and parts of California – including the capital region, the San Joaquin Valley and Riverside and San Bernardino counties – the nation's rate of foreclosure starts and the percentage of loans in the process of foreclosure were the highest in the survey's 38-year history. California and Florida alone accounted for 30 percent of all U.S. foreclosure starts during the last quarter of 2007."
Home Front: Sacramento area part of continuing grim foreclosure forecast
PeonInChief: You just sparked a really scary idea in my mind. Everyone is so fond of bailouts, imagine this: the "retirement bailout".
It would be intended for poor workers who dutifully paid their mortgages their whole lives (and traded up and/or took out lots of equity), but upon retirement found themselves coming up short. Surely they *deserve* a nice retirement, right?
I'm sure someday I'll probably regret even mentioning this idea of course I'm not sure that we wouldn't have an economic collapse before things get that bad.
"What would it take for an audit to be done on the salaries and job duties of some of our state employees"
Good question. The problem is that the culture of laziness is pervasive from the top down. I don't think any of them would want an audit, including the managers, since it would expose the behavior that they've let persist. Not everyone is worthless mind you, but at my particular workplace, at least half of them are clearly not worth what they're being paid, if anything at all.
"The comment above essentially describes where our tax dollars are going, and at the expense of our children's education."
Yep. Here's a scenario for you. An average teacher starts out making 30 to 40 something a year. At the height of their career, with a masters degree, working 50+ hours a week for 25 years they might break 70k. Of course, they'd be lucky to make it that far without suffering numerous layoffs and cuts (with 5 billion being cut from education this year, the survival excersize starts now). Now contrast that with many of the *unskilled* state folks sitting in my office right now, playing solitaire on their brand new 21" flat screen monitors, ALL of them (even the new hires) making 60-90k, taking every other Friday off, and watching their pensions grow.
It's horrible. I wish I could explain it, but I can't.
PR, can I work for you folks? I get tired here eating bonbons at my desk from 7 to 7 everyday for half of what you people make >; )
Sure, come on over. I think there's some sort of hazing ritual though where they make you swear not to work too hard for fear of making the old timers look bad.
I want a gov'ment job also, but I don't like to play solitaire. How about online poker? Will that work? According to today's jobs report, the only category that increased jobs was the gov'ment.
From the Auburn Jornal:
"A super-stretch limousine tour of bank-foreclosed properties in Placer and Sacramento counties is attempting to help smooth out what has been a bumpy real-estate market ride in recent months."
Limo foreclosure tours give buyers chance to shop in style
Job gains were restricted to government (up 38,000), health and education (up 30,000) and hospitality (up 21,000). missed a few.
PeonInChief: You just sparked a really scary idea in my mind. Everyone is so fond of bailouts, imagine this: the "retirement bailout".
PR, we already do this. It's called state workers and they get a guaranteed pension PLUS 401K which is better than anything found in the private sector. Not to mention the fact that this is paid for by the PRIVATE sector taxpayers (a.k.a. suckers).
norcaljeff -
Don't know about long-time state employees, but my fiancee started with the state last November. She has a mandatory 5% unmatched contribution into retirement for the first few (3?) years, which she can convert to a "real" state retirement program if she's still working for the state at that time. Maybe it'll be awesome when she's been with the state for 20+ years, but right now it's worse than my private employer with matching funds for the first 3% and no forced contributions.
"we already do this."
I wouldn't call it a bailout just yet, though taxpayers do get a raw deal at the moment. The bailout comes when CalPERS or STRS or whatever goes belly up. I figure around that time the "suckers" (non govt. workers) will revolt and call for a general retirement bailout. Print a few trillion in bonds, bada-bing, we have a bailout.
I really don't think the economy would last that long though.
Instead of taking pensions away from state workers, why not require some kind of pension system for all workers? That seems much more sensible than forcing people who haven't either the competence or interest to figure out how to invest their savings.
And it was the Governator who advocated the 3-year waiting period for new state employees before their payments were converted to pension payments. The unions agreed to this because the alternatives for new employees were worse.
Finally, I don't think that the economy will be destroyed by all those baby-boomer retirees. The retirement of the boomers will open up huge numbers of jobs and because there will be many fewer workers, wages for many jobs should rise substantially. The state is so worried about its ability to recruit workers that it has instituted the "Boomerang" program to enable retired state workers who want to continue working to keep parts of their old jobs or find other jobs. (And yes, it's really called "boomerang.")
And really finally, remember that the DPA survey found that state workers were underpaid compared to private sector workers, even with the better pension and health benefits.
"And really finally, remember that the DPA survey found that state workers were underpaid compared to private sector workers, even with the better pension and health benefits."
I totally call BS on this. I'm married to a State worker, and I KNOW for a fact that they have EXCELLENT benefits.
You can not buy the pension that the state gives to its employees - you just can't.
It works like this: years of service x 2.0 (at 55 years old) x BEST 12 month salary = initial payment. Then there is a COLA on top of that. Safety employees have a more generous formula.
Go price a variable annuity with those specifications, and come back to me with the net present value in annual contributions required to purchase such a thing.
{Hint: you can't do it - the "best 12 months" part of the equation is the TOTAL killer. This is an ENORMOUS benefit that is hugely overlooked.}
Then, let's add in the fact that, should you want, you can also buy an additional 5 years of service, known as "air time", based on a calculation of your *current* salary. Yup, buy in today's earnings, retire on PEAK earnings.
I love it for my families financial planning, but it is an incredible deal for the workers. Add to that the revealed salaries at SacBee's new database, and I am astounded at what we are giving away. (Where else can you find routine jobs that pay 40, 50, 60, 80K for a high school diploma???)
Don't even get me started on the rest of this rant:
- Health Care benefits w/ tiny copay, tiny costs
- Tons of Holidays and Vacation
- Brand New buildings and desks and chairs and computers for everyone
- Subsidized parking, transit
- Vision at below cost
- 5% annual pay raises until you reach the top of your band, regardless of performance
- COLA on top of the 5%, whenever the Union wins it's periodic battles
- Nearly bulletproof tenure with the powerful union
Anyway, it is interesting that the FOX guarding the henhouse finds that those poor employees are "underpaid." Yeah. Right.
spacebar: Thank's for posting the link to the Auburn Journal article.
On March 15, up to 18 participants will step into a 40-foot Lincoln Navigator super-stretch limo for a tour of foreclosed homes. Some of the posters on this blog should go on the tour and write about the experience! LOL
I posted the following reader comments at the end of the Auburn Journal article.
The article does not say how many homes have been sold as a result of the free limo tours. However, it will be the most expensive limo ride that any home buyer ever takes, because a year from now these homes will be worth thousands of dollars less than they are selling for now. Enjoy the tour, suckers!
"why not require some kind of pension system for all workers?"
Forcing a pension system on the general population would just be attempting to solve one problem while creating another, and would violate the freedom of everyone it's imposed on. Keep in mind that one of the "pillars" of freeom is choice, which is clearly violated through government mandated programs. Besides, a forcibly imposed retirement program is kinda what we already have with social security.
As far as the retirement bailout theory or any bailout for that matter, in a truly free society people and companies have to be responsible for themselves, therefore bailouts are incompatible with freedom. Freedom relies on protecting the rights of the individual from the greed and passion of the majority, which is the opposite of what we get when a bailout occurs.
"And really finally, remember that the DPA survey found that state workers were underpaid compared to private sector workers"
It must depend on the particular state agency. Ed nailed it in his response above.
Ed,
Sorry, that sure doesn't apply to me. It's like saying all CEOs receive Mozillo type pacakges.
I'm not going to go into all the details but I can assure you that hodge poge of furniture in my office was all bought somewhere between 1950 and 1978. And I'm ok with that.
As to the salary increases, UC clericals have to bargain for merits. In the last 9 years, I think they received 1 merit raise for 1% and 4 cost of living for a grand total of 10%. This is great for people who are maxxed out and crap for anyone who joined in the last 20 years. The other unions aren't much better.
Can we go back to whining about RE now?
They tried a pension for everyone, its called social security. How did that work out.
As far as state employees being underpaid compared to thier public sector counterparts. I don't know who DPA is or when they did there survey, but last year USA today had a salary survey that showed just the opposite. Given the choice I am going to belive the "independent" new source.
Gwyn,
Are you covered by the CalPers retirement? That was the main point of my post and it is a golden plated, non-market driven, impossible to buy system.
I would gladly participate in the CalPers system as a private citizen. I'd gladly make the full employee and employer contribution.
It truly is a financial wonder.
UC has it's own system called UCRP. When you get into CalPers packages, it really differs on which Tier you are in. Now CalPers has problems, much of which stem from how they invest but that is a whole other topic.
Now if you are academic senate or federation, there are a lot of perks but they sure don't tickle down to the staffers. That's a whole other rant for another time.
DPA was more than independent. They were preparing for negotiations with state unions and wanted to "prove" that state workers were overpaid. They suppressed the study when the study showed the opposite.
And Social Security works quite nicely; it's particularly important for women. And if you think the system is in imminent danger of collapse, go to cepr.net and read Dean Baker's work on that very subject. (Yes, the same Dean Baker who called the housing bubble in 2002.)
Have any of you read the rants in the comments section of the SacBee regarding the database? Most were written in the middle of the work day. So maybe they all don't play solitaire all day; internet surfing may be the other pastime. All kidding aside, I think the database really angers those state employees that thought they had a sweet deal where they work. Now their harder working peers know their salaries and they're pissed b/c the secret's out. Without knowing the motives of the SacBee for publishing the database, I'd have to assume that the best way to stir things up in the state employment pool is from the inside out. I wonder how many evil eyes some are getting at work these days, while on their computer mastering solitaire.
An interesting development. I recently spent 3 weeks in Southern California. Each weekend I ordered a massage from adds I found on craigslist. Each female that gave me a massage was in or formerly in the realestate industry. Additionally, all 3 of them propositioned me for sex for a higher price. I guess when some people they called the greedy people in realestate whores, they had a vision of the future!
theobserver said... Each female that gave me a massage was in or formerly in the real estate industry.
I would normally call BS on that story. However, having observed the conduct of some female real estate agents, your report does have a ring of truth to it.
Please post the results of any additional research you conduct on the state of the economy.
Ah man, I just read some of the (500) comments to the Bee article. What a bunch of whiners. If they don't like the people who pay their salary knowing what they make, they can go work in the private sector.
From The San Francisco Chronicle:
"In eastern Antioch, 4.1 percent of all homes and condos went through foreclosure in 2007, according to DataQuick Information Systems. That's as bad as the hardest-hit neighborhood of Stockton - often cited as the foreclosure capital of California and even the nation.
In eastern Contra Costa, more than 2 percent of all homes in eight ZIP codes were foreclosed on in 2007, a rate that rivals most Stockton neighborhoods."
In Contra Costa, evictions becoming common
FWIW, the UC retirement plan pays based on the average of your last three years, and 25% for every 10 years. That means that someone who retires after 40 years of service should have a pension equal to their average salary over their last three years of service.
Not a bad deal at all.
And as Big G said, there's a big difference between the salaries of faculty and some staff, and clerical or outside workers. I get the impresion tha the UC hands out decent COLA raises to non-union staff just to stick to the union staff.
My 2 cents worth on the sale of land in Rancho Cordova from 2 public builders to local private investors (Bus Journal) what was not said is that these public builders didn't need the cash, they did it to get it off the books and take the loss now.
What else was not said very well, RC city has increased the cost many 10s of millions to develop this land vs when they bought it. Its a moving target.
You won't see affordable homes when permits approach $100K, share of the interchange approach $100K each, etc., etc.
Some people are actually calling FOR principle reduction...
http://loanworkout.org/2008/03/04/principal-reductions-that-restore-equity-for-the-homeowner-may-be-more-effective-means-of-avoiding-delinquency-and-foreclosure-bernanke-said/
From the Sacramento Business Journal, as noted by sippn:
"Two of Sacramento's top builders have unloaded 250 acres approved for new homes in Rancho Cordova for 16 cents on the dollar -- the first major land sell-off in the capital area since housing sales collapsed last year."
"Publicly traded homebuilders such as Pulte (NYSE: PHM) and Centex (NYSE: CTX) can turn losses on land deals like this into tax benefits. They're allowed to write off losses and receive refunds going back three years to a time when they were profitable. The money from the sale can then be invested into existing operations or new land purchases.
At the height of the local housing boom, $8 million would have fetched less than 20 acres of land approved for new homes as prices had escalated to $600,000 an acre in some areas. Builders and developers are still waiting for a new benchmark on what land is worth in today's economy. The buyers in this deal, Alvarado and Somers, paid $32,000 an acre."
Centex, Pulte dump land in Rancho
You won't see affordable homes when permits approach $100K, share of the interchange approach $100K each, etc., etc.
Ah, sippn, you know about that 'dirty little secret', I see.
Local governments have used construction 'fees' as hidden taxes for many, many years. I know that even before the bubble, it was easy to tack on about $30K in fees PER house.
And now, since less construction and fees are being generated, their solution is to increase them...retards...
Ed,
"It works like this: years of service x 2.0 (at 55 years old) x BEST 12 month salary = initial payment. Then there is a COLA on top of that. Safety employees have a more generous formula."
You're right on the formula, it's just that I've never met anyone at 2%. My mom, a Placer county nurse just retired at 2.75% (she's getting 90% of her last salary). I know at least 10-15 state and county employees and they're all at 2.5% and their unions are pushing for more.
Problem is, CalPers is f'd. Anyone know how many subprime CDO's the owned? What about their big push into commercial real estate 3 years ago? There is no transparancy, just a big black box for wall street to offload all their garbage.
But the fees were the response of not being able to gather property tax at a normal rate because of Prop 13. The long term owners don't pay squat and the new home buyers get raped by higher tax payments and huge fees. Save the retirees by killing the children; stupid, stupid, stupid.....
Hey , can't wait to hear what Elliott Spitzer has to say about the prositution ring. . . . looks like sex might be the new sex again! (instead of real estate)
"The long term owners don't pay squat and the new home buyers get raped by higher tax payments and huge fees."
I kinda wonder, with current declining property values, if the long landed gentry will see their taxes continue to increase at the allowed 2% annual increase in assessed value, closing up the gap a little bit.
From The Stockton Record/recordnet:
"Art Godi, of Art Godi Realtors in Stockton, said that eight out of 10 existing-home sales these days are either foreclosures or short sales, when a home sells for less than what is owed on the mortgage.
These types of houses get all the attention from buyers, he said, forcing owners of traditional houses to be within at least a couple of percentage points, or $5,000, of the sales price for a comparable foreclosure house.
That kills home-equity values in the fight to compete, he said.
"Just as it went down very fast, it will bounce up fast when the foreclosures are gone," he said, "but not as high or as drastically as it did in the past."
If the median sales price in Stockton were about, say, $200,000, Godi said, "with foreclosures out of the picture, you very quickly could get back to the $250,000 to $260,000 range."
A housing economist, though, said Realtors tend to exaggerate, and such an appraisal may be overly rosy, though essentially correct."
Waiting for the bounce
From The New York Times:
"The story of the Dunmores is the story of the nation’s housing crisis writ small, familial and mean: three generations of home builders who got rich from the go-go years of the California real estate boom, only to fall victim to the housing bust. And it is a tale of greed, hubris and denial of economic reality."
"The region was one of the fastest-growing real estate markets in the country. In Sacramento County, from 2000 to 2005, the median price of homes more than tripled, to $385,000, according to DataQuick Information Systems.
“It was the type of market that floated all boats,” said Greg Paquin, president of the Gregory Group, a real estate market research firm in Folsom, Calif. “Builders, buyers, investors: everyone was happy.”"
In California, a Generational Tale of Real Estate Boom and Bankruptcy
I'll take 90% of my highest annual salary in retirement. Oh wait, I work in the private sector. I ain't getting sh*t.
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