Walking Away from the Horse

From the Sacramento Bee:

It's a little late to ask this now. But what if we had missed out on that roaring housing boom in Sacramento? Would the values of our homes today actually be higher? New research shows that median new-home prices in the Sacramento region are now only about $26,000 above what they'd be if prices had simply appreciated 5 percent per year since 2000.
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Given that today's prices are falling, they're on track to reach the region's theoretical "natural price point" before long, [Dean] Wehrli [vice president of the Sullivan GroupWehrli] said...Wehrli said he believes Sacramento is closer to its "natural" price point than other parts of California. Why? Because "it took so much pain so quickly," he said.

From MarketWatch:

In a presentation on its WaMu acquisition, J.P. Morgan forecast a 58% peak-to-trough slump in California home prices if the U.S. enters a severe recession.

From the Sacramento Business Journal:

In Sacramento, the median price was $220,890, down 33.6 percent from a year ago August, but up just under 1 percent over July [according to CAR]. Sales, however, were up 107.4 percent.

From the Sun Post:

In the last few months, the Grace Foundation located in El Dorado Hills has been inundated with phone calls from animal owners seeking help. "People are calling and calling and saying 'can you please take our horse,'" said Nancy Conley, director of volunteers at the organization.
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More people are looking to place their horses at the foundation because of skyrocketing feed prices and the foreclosure crisis that is forcing many rural homeowners off their property... She said it has been "unbelievable" how many more people are looking to place their horses in a safe place.
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Often...horse owners who can no longer take care of their animals are choosing to just walk away from the problem...Animal control supervisors in both Sacramento and San Joaquin counties say they are seeing more and more abandoned horses as well as horses just ditched on abandoned, foreclosed properties....San Joaquin County Animal Control Director Ernest Molieri also said the number of abandoned horses is on the rise, as well as other livestock such as cows, pigs, donkeys and chickens.

From News10:

YouWalkAway.com took its sales pitch on the road to Stockton, at the center of the nation's foreclosure crisis. "Our goal is to empower families," said Dan Pinto, the company's communications director in a presentation to several dozen homeowners gathered at the downtown Sheraton Hotel, which itself is in foreclosure.

From the Modesto Bee:

"There are a good amount of foreclosures going on in our valley. The most in the nation. Why? Because of over-leveraging from homebuyers accommodated by a credit establishment that was hungry for profits. Should they be bailed out? No.

"I had a house handed back to me earlier in the year. I had sold it and carried back the paper. The buyer came to me after two years of making payments and wanted to hand me back the keys. I asked him 'Why the payment is not going up. You're still making the same amount of income as before so why do you want to walk from your obligation?' 'Well.' he said, 'the home is not worth even close to what I paid for it two years ago.' I think about that remark and its the same philosophy playing out on a lot of the foreclosures. Yes, there are the resets going on which is unfortunate, but a good part of the foreclosures are coming from people who had little to no money in the deal and-or refinanced their house once or twice actually pulling money out who are now walking because of decreased values."
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"One last remark. I retired from the building business in early 2002. I said then in the Modesto Bee that I thought things were heating up when I had buyers pulling their names from a hat to get in line to buy a home. I went to the sidelines and was called Chicken Little because I had said the sky was falling in. Well, I hate to say it, but that seems to be exactly what's happening now. I'm not a prophet but the homes I sold in 2002 went from $350,000 to $850,000 at the peak now they're back down around the $350,000-$450,000 range."

From Rocklin & Roseville Today:

[W]e don’t need a plan that keeps people in homes they should never have been in. They can buy or rent one that matches their capacity to pay, just like the rest of us.

From the Sacramento Bee:

Three words describe business at Capital Confections where the mood is as dark as the chocolates behind the display case. "Horrible, horrible and horrible," said owner Teresa Higgins.

Her industry's mantra: chocolate is recession-proof. But quiet days and fewer customers are telling Higgins otherwise. People are placing fewer special orders for the parties and weddings that are such an important part of Higgins' business in Town & Country Village. Counter sales are shrinking. July was the slowest month she's had in her 12 years as owner and she worries how she'll fare during the winter holidays.
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Add high fuel costs, the housing market's nose dive and Sacramento's summer-long budget morass, and shoppers in the shadow of the Capitol are holding onto their money, waiting for the clouds to pass.

Ben Jones on the beginnings of the Housing Bubble Blog