Friday, May 09, 2008

"Leery of Too Much Sunshine"

From the Today Show:

The six scariest real estate markets

Stockton, Calif.
Stockton has the highest rate of foreclosures in the nation...Unemployment is a whopping 10 percent, almost double the national average of 5.2 percent.
...
Some people are simply walking away from their homes because they're spending too much on gas to commute back and forth to work in the Bay Area, plus their homes are no longer worth what they paid for them. Instead, they just move closer to work and rent rather owning. Local realtors report that homes have become vandalized or burglarized for copper plumbing or wiring, cabinets and other re-salable fixtures. In some areas of Stockton, there are more than five homes on a single street that are abandoned. Homeless people are squatting in homes, even without power or water, just to find shelter.

Sacramento, Calif.
Home prices in this area more than doubled between 2000 and 2005, setting Sacramento up for a hard fall. Since last year, the price per square foot in Sacramento dropped 29.8 percent to $161, according to the real estate data company Radar Logic Inc.

Worse still, Sacramento has the highest concentration of homeowner debt in the country according to Forbes.com. More people here have combined their mortgages with home equity loans, second loans, or both.

When the housing market slowed here, jobs were lost in related industries: title companies, interior design, lumber supply companies, electricians, plumbers, roofers, appliance stores and so on, dealing a heavy blow to the Sacramento job market.
From the Sacramento Bee (hat tip Jeff):
Sacramento bankruptcy attorney Daniel Weiss said he's never seen this rate of filings in nearly 40 years of practice. "I've never seen this many people who are losing their homes," Weiss said. "Before they would say, 'Help me save my home.' Now, they're not even considering there's a chance."

At Sacramento's NeighborWorks Homeownership Center, which counsels struggling and first-time homeowners, director Mike Himes sees firsthand the impact of subprime loans that have left homeowners crushed beneath unpaid bills and mounting debts after moving into homes that were beyond their means. "Some people were so far over their heads on everything – property taxes, mortgage, credit," Himes said. "They were living off their credit cards."

It often began, he said, with a loan application that overstated their income. With mortgage payments based on an inflated income and often set to readjust at higher rates, many sank deeper in debt as they tried to stay afloat.
From the Sacramento Bee:
Might it be that as Sacramento helped lead the nation into the housing crisis, it is among the first to help lead it back out?

Not so fast, said Robert Kleinhenz, deputy chief economist of the California Association of Realtors. "We still have rough patches we're going through this year," he told the Sacramento Association of Realtors during a housing outlook forum earlier this week. "But I do see some hopeful signs on what we've gone through the past few months."

Kleinhenz, like many who prognosticate about the real estate market by reading conventional economic indicators, has proved to be overly optimistic in the past. But with rules for home loans getting tighter, he now sounds leery of too much sunshine.
From the Sun Post:
Enrollment numbers for the Manteca Unified School District — which also includes Lathrop and the Weston Ranch area in Stockton — have dropped 1.5 percent from March 2007 to March 2008, falling to 23,051, according to data collected from the district. And a private consultant hired by the Manteca Redevelopment Agency also reported a slight dip in the city’s population. Claritas, a New York-based demographic and marketing consultant, estimated that Manteca’s population was 64,688 in the beginning of 2007 and 64,669 in 2008, according to reports produced for the city.
...
Two factors — rapidly rising home prices in the last several years and a proliferation of foreclosures in 2007 — may have led to a stop in growth, according to Jeff Michael, who heads the Business Forecasting Center at University of the Pacific. Net migration into the county has essentially dropped to zero in the past two years, Michael said, and recent foreclosures may have led people who moved to the county from the Bay Area to move back to the place where many of them still hold jobs.

However, the local impact of foreclosures remains a mystery to demographers, he said. If people are simply moving into rental homes down the street, populations should remain steady. But forced home sales could also send residents out of state.

5 comments:

Deflationary Jane said...

OT but kinda fun in a twist urban nightmare way

Serrano homeowners association helps catch hit-and-run suspect
http://www.sacbee.com/101/story/926657.html

The driver was/is a senior VP at Smith Barney's Folsom office.

Hangtown said...

Up in Placerville, things are so bad that the Mountain Democrat (our weekly wipe) can't even find anyone to advertise on the front cover of their Real Estate Magazine in the Friday paper. Their biggest revenue generator seems to be the daily list of home foreclosures in the classifieds. The Democrat (aptly named) is in major denial of the RE Crash and runs lots and lots of happy camper stories every day.

sacramentia said...

DJ- Kind of like a plot from Desperate Housewives. I'm glad they caught the bastard - he should have stopped and helped the lady he hit.

Patient Renter said...

Man, what an a**hole. What is it about being well off that makes someone feel they are above the law, and above coming to the aid of someone that they smack into with their car!?

I hope they throw the book at this fool. He needs a reality check.

Deflationary Jane said...

"I hope they throw the book at this fool. He needs a reality check."

Make it a copy of Bonfire of the Vanities >; )

Actually, that would be a great book to reread these days along with a lot of Dickens.