Wednesday, May 21, 2008

Congresswoman "Walks Away" from Curtis Park Home; Merced Hits 50% off Peak

From Capitol Weekly (hat tip JC):

As the real estate market softened in 2007, the new owner of a three-bedroom, 1,600-square-foot house in Sacramento's Curtis Park neighborhood ran into trouble. The house that was purchased for $535,000 in January had lost equity. The owner fell behind in her payments, and eventually, the bank seized the home.

What makes this story different from the thousands like it is that the owner of this house was a member of Congress. The story of the foreclosure of Long Beach Democrat Laura Richardson's Sacramento home is a tale of a real estate market gone sour...While being elevated to Congress in a 2007 special election, Richardson apparently stopped making payments on her new Sacramento home, and eventually walked away from it, leaving nearly $600,000 in unpaid loans and fees.
"It's kind of silly. You would think people who are making decisions for others would be able to make good decisions for themselves," she [the former owner] said. "She should have known what she could afford and not afford."
Steepest price declines in the nation - check
Home of the most hated flipper in the nation - check
First Congressional Rep. to walk away from home - check

UPDATE #1: Max has more on the story at SacRealStats.

UPDATE #2: Richardson responds - From the AP (hat tip LA Land):
In a statement issued Wednesday, Richardson blamed that constant job-shifting for the financial problems related to the Sacramento property. She said the home was not in foreclosure and had not been seized.

"I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement—with no special provisions," Richardson said. "I fully intend to fulfill all financial obligations of this property."
Richardson's chief of staff, Kimberly Parker, told the AP that the mortgage on the home had been sold but the house had not. The Sacramento County Assessor's Office continues to list Richardson as the owner, even though the May 19 document on file at the Recorder's Office states that Red Rock Mortgage bought the home at public auction.
Records on file at the Sacramento County Tax Collector's Office also show Richardson is delinquent in paying $8,950 in property taxes.
Also this video clip from CBS13: Congresswoman Defaults On Sacramento Home

UPDATE #3 (Thursday): Capitol Weekly responds

In other news, Merced home prices broke the 50% off peak mark. From the Modesto Bee:
Stanislaus County homes sold for a median $225,000 last month....At the market peak, Stanislaus homes sold for a median $396,000. That's a 43.2 percent decline in 2½ years. San Joaquin County prices have dropped even more. Last month, the median sales price hit $245,000....San Joaquin homes peaked at $451,500, but prices have plunged 45.7 percent since. Merced County is even worse. Its homes sold for a median $186,000 last month....Merced's homes peaked at $382,750 before plummeting 51.4 percent.
Just released first-quarter 2008 calculations from the National Association of Home Builders-Wells Fargo Housing Opportunity Index show that the percentage of affordable homes has more than doubled in the valley since the fourth quarter of 2007. The new figures show median-income Stanislaus County families could afford to buy 36.2 percent of the homes sold in the county this January, February and March...Merced and San Joaquin counties have seen similar shifts in affordability. Median-income families can afford 28.3 percent of Merced homes and 35.5 percent of San Joaquin homes.
While the real estate market downturn has increased affordability, Stanislaus families had a much easier time buying homes 10 years ago. During the first quarter of 1998, nearly 80 percent of all Stanislaus homes were affordable for median- income families.
Chart of Stanislaus County's Affordiability Index since 1996.


Patient Renter said...

Merced home prices broke the 50% off peak mark

Lies! I thought 50% was not possible? Someone on this very blog said so just last week!


bubblemachine said...

50% off peak is coming to a neighborhood near you, patient renter. C.A.R. will be deeply disappointed.

Diggin Deeper said...

When you give free money away be prepared to give it to anyone who puts their hand out...

Max said...

Wait in '08;
50% decline in '09.

I'm a poet and I don't even know it. :)

Deflationary Jane said...

I know everyone says that inventory is declining but here is an update on my old budget search criteria:
Sept 05 - 0
Dec 06 - 2
Dec 07 - 66
Jan/Feb 08 - 58
May 15, 08 - 72
May 21, 08 - 83!

Perfect Storm said...

50% off in Merced, I would have never thought it could have been possible. I mean dang they have a Foster Farm Chicken plant in Merced, were not talking Barstow folks.

Were right in track for a 50% decline by 2009.

norcaljeff said...

Hmmmm, I think a few people on this blog stated Curtis Park was one of those neighborhoods which "will never lose value due to high demand." Guess we're breaking all the rules this time lol.

sacramentia said...

"Records on file at the Sacramento County Tax Collector's Office also show Richardson is delinquent in paying $8,950 in property taxes."

Unbelievable!! Richardson couldn't even pay the taxes when the taxpayers were paying her salary. With selfish financial morons like this running the place we are screwed.

anon1137 said...

Lander: Ouch! LALand scooped you on a *big* bubble story that happened right here in Sacramento. (Can't blame you though - I've been snoozing through a lot of the news lately too.)

Re: the Richardson story, I could forgive her for leaving WaMu holding the $535K mortgage, but ONLY if she coughs up the $40K that she looted from the place (including the $15K kickback at COE).

Speaking of politicians participating in the bubble, Sacbee ran a story a year or two ago about Joe Nation shopping for a house in midtown/downtown. I wonder if he ever bought one, and if so, whether he's making his payments?

Norcal: Curtis Park isn't one of the "golden" downtown neighborhoods, but your comment is noted. I think the patina is beginning to crack. It won't be long before the cracks spread to Land Park and East Sac.

Deflationary Jane said...

And you know she probably had eighty bagillion in write-offs and marginally justifiable tax credits too.

SacramentoCrash said...

"Congresswoman "Walks Away" from Curtis Park Home; Merced Hits 50% off Peak"

Turn this one into the Bee and Sacramento Union:

This one is smelling like spoiled meat!

She bagged $15,000 at close of escrow.

It starts with an F and ends with a D

Numbskulls like her are driving this state into bankruptcy!

Lander said...

Lander: Ouch! LALand scooped you on a *big* bubble story that happened right here in Sacramento.

His blog pays more than mine :)

James said...

Richarson's house is now on the market (zillow) for $600,000.

Patient Renter said...

zillow shmillow.

James said...

that is no the value on zillow, just for sale price.

Justanotherrenter said...

Actually Foster Farms' Chicken Plant is in Livingston, which is about 15 mi north of Merced.
We have at least 3 subdivisions exactly as described in the article, all dirt and few homes. But for now this is still home!

Justanotherrenter said...

Actually Foster Farms' Chicken Plant is in Livingston which is about 15 mi north of Merced. But yes prices are falling and falling!!