'They Have To Keep Things Going'
From the Sacramento Bee:
The uncertainty involving market leaders created the latest set of jitters for real estate markets – including Sacramento's – that can best be described as fragile. Though year-over-year sales have risen for the first time in 36 months in the area, still more restrictions and fewer loans have the potential to curb the supply of buyers and stall a recovery, brokers said.From the Sacramento Bee:
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Brokers said the recent boost in home sales locally is largely due to borrowers with good credit and the ability to put money down. But they said they're hearing that mortgage insurers may start requiring 10 percent down payments instead of 5 percent in so-called "declining markets" like Sacramento.
Still, [Beth] Gewerth [of Mason-McDuffie Mortgage Corp. in Sacramento] said the economic system will somehow keep the loans coming. "As we all know, housing drives the economy," she said. "They can't get too exotic. But they have to keep things going so people can purchase homes and keep it going."
Centex Homes, the Sacramento region's leading homebuilder, said Tuesday it has folded its Sacramento, Central Valley and Reno divisions into one operation based in Sacramento. That marks the second builder consolidation announced in recent days. Irvine-based John Laing Homes has folded its Bay Area and Central Valley divisions into one based in Sacramento.From the Sacramento Bee (hat tip Fred):
The chairman of Greater Sacramento Bancorp is being sued for foreclosure by two other banks. Kip Skidmore, the non-executive chairman of Greater Sacramento's board of directors, was sued by Umpqua Bank and Bank of the West over two suburban housing projects for which he guaranteed loans. Neither project involves Greater Sacramento or its operating subsidiary, Bank of Sacramento.
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[T]he lawsuits have given him a better sense of the real estate slump and its effect on banks. "It allows me to (have) some appreciation of the situation, of what developers and banks are both going through," he said.
12 comments:
so-called "declining markets" like Sacramento
So-called? Hahahaha.
Wasserman, buddy. Even if you were paraphrasing what someone told you I would think you'd know better than to print something that makes you look like a complete idiot. Newsflash: Sacramento IS a declining market.
Well sacramento "was" in a declining market, but we hit the bottom this month. Or was it last month or the month before? I can't recall.
So lets see, we spent several years giving loand to anyone with a pulse (or was that even a requirement) with no documented income and no down payment and had to also give lower than market interest rates they that people could afford the homes (until the rates raised).
And even so, homes were still out of the price range of many people.
And we built to meet a speculative demand and overshot that.
How exactly do people afford homes when they have to actually pay back the loan?
At this stage, no one has still given much thought to the overhang that exists all over the place.
If 100 people were expected to buy a home, and you built 140 for them to select from, what happens?
That inventory out there does not get cleared out quickly.
The only reference I have read about that is one where a condo overshoot in Miami took 6 years to fully clear.
It's still considered a declining market sheesh!
http://calculatedrisk.blogspot.com/2008/05/wsj-report-fannie-mae-to-eliminate.html
I expect better of Jim then this.
On the bright side, at least the two builders mentioned are consolidating in Sacramento, and not elsewhere.
Why does anyone expect better of Wasserman? He regularly quotes the predictions of the real estate industry.
Why does anyone expect better of Wasserman?
Personally, I figured he would get tired of looking like a fool at some point and either be independantly objective or offer counter viewpoints to the industry stuff, either of which would have resulted in him not looking like a fool with that quote above.
I thought that article in the Bee about the Chairman of the Bank of Sacramento, Kip Skidmore, was funny. Here is a guy who is an owner of a bank, and he is being foreclosed on. The guy also owns FIVE rentals in Fair Oaks that are also in foreclosure. One of the banks that is suing him is claiming that he is hiding his assets to avoid paying them back. Just the type of guy that should be heading up a bank!
Is this the same Kip Skidmore who owns the Crawdad's marina and was the lead investor in the defunct Sixells LLC?
I would not buy in Elk Grove, but I was looking at the listings on the low price end, and the percentages of short sales on sacbee must be close to 70%. Hilarious!!!!! It will take years to clean out the inventory.
"Just the type of guy that should be heading up a bank!"
On a grander scale, there's talk today that Congress might takeover Fannie and Freddie...soon.
"just the type of organization that should be heading up these two defunct companies."
If they go down they take about $5 Trillion with them...would make the foreclosure and RE problem irrelevant.
Heard on the local news today that Sacramento new home inventory (starts, completed, and under some form of construction) stands at 2600 units.
I would of thought it would have been much higher....
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