Bee: Sacramento Real Estate Market Bottoming Out?
From the Sacramento Bee:
Is Sacramento's woeful housing market bottoming out?..."We might be hitting that bottom … but we might be at that bottom for a while," said Dean Werhli, a vice president in the Elk Grove office of market researcher Sullivan Group Real Estate Advisors. "We could be skidding along this bottom for quite some time."...Even if the economy worsens, "it's going to be difficult for prices to go much lower," he said.From the Sacramento State Hornet:
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Consumer advocate Paul Leonard offered a bleaker prognosis: The foreclosure crisis could worsen over the next year, and the state's faltering economy won't help. "It's certainly good to see that there is new (sales) activity, but there are still a number of factors out there that suggest that this problem is going to be with us for a while statewide, particularly if you look at the Central Valley," said Leonard, director of the California office of the Center for Responsible Lending.
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The region's economy has a lot riding on this. The bursting of the housing bubble caused considerable harm to the economy in Sacramento and across the state. As home values plunged, equity "extractions" – cash generated by refinancing, home equity loans or outright sales – fell by 34 percent last year in Sacramento, according to MDA DataQuick. That took $2.1 billion out of the region's economy.
As the effects of the housing crisis and the international economic crisis ripple through everyday life, students and faculty at Sacramento State are forced to change lifestyles. For some, this means driving less; for others, the changes are more severe. Many students are finding they have to spend less to survive these days. Matthew Harris, undeclared freshman, said his spending habits have changed recently. "I don't spend money at all anymore," Harris said. "The only things I spend money on are school and food, and only when necessary."...Harris said he feels it is likely the U.S. will enter into a depression in the near future. [Student Anthony] Gragg said he feels the country is not quite to the point of worrying about a depression, but it is getting close.From the Tracy Press:
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[Kristin] Van Gaasbeck [associate professor of economics] said many professors are likely being affected heavily by the burst of the housing bubble. "Many instructors were recently hired at Sac State, and many, myself included, probably bought homes in the area during the housing run-up," Van Gaasbeck said. "I suspect that some of them are in a better boat than others, but depending on how much they were gambling on property values increasing, they might get stuck."
What developers had hoped would be the first retail-office-industrial anchor in Mountain House has folded under the weight of a foreclosure-saturated housing market and the national credit crisis. Chapter 11 bankruptcy of Pegasus MH Ventures I LLC forced parent company Pegasus Development to cancel plans to build a business park on 140 acres of land along Interstate 580 and near the Alameda, Contra Costa and San Joaquin county lines.From the Sacramento News & Review:
In Folsom, home of the prison, the factory outlets and the historic downtown, the local economy will be the incoming city council’s No. 1 priority. As the election approaches, evidence of the downturn is everywhere you go in this city of 70,000 people just east of Sacramento. Reality is setting in, and it’s looking grim.
The number of foreclosed homes is growing, and property-tax revenues are shrinking. Several commercial areas in town continue to thrive, but elsewhere businesses have disappeared, leaving gaping holes in silent strip malls. Vast swaths of new commercial development lie vacant. The housing bubble has burst, the boom is over, yet the ideal of perpetual growth lives on. An enormous new shopping center continues to rise north of Highway 50. Plans for residential and commercial development south of the highway are proceeding...The city faces its bleakest budget crisis in years, and the city council will have to figure out how to fill all those empty businesses and homes....
10 comments:
Must be friday ...
Cool.
Cow_tipping
yep, another day another...
it's going to be difficult for prices to go much lower
there's nothing "difficult" about prices going lower when they are still inflated according to traditional metrics.
Literally every day for the last month some clown has called bottom and they get an insane amount of press.
I think the papers will have to start putting in warnings under their articles, Something like "The bottoms called in the course of this articles exist only in the heads of the ones calling it and not neccesarily in reality"
Cool.
Cow_tipping.
they get an insane amount of press.
People generally like optimism more than they like to hear that things will remain bad.
I am sure everything will be fine once the government starts flipping homes for a loss. /sarcasm
We are already 50.4% off peak, so we are at least past the halfway mark to the bottom. Maybe it bottoms before 0 but will likely be closer to 0 than to 50%.
Too many homes, not enough people, too much debt, not enough credit.
And those pesky baby boomers have to start selling pretty soon.
I dont see how cheaper houses isn't good news ...
Cheaper gas, Check, cheaper food check. cheaper labor check, cheaper cars check ... cheaper houses ... no ... why, if that cos everyone owns a house ... but everyone also owns a car and a tankful of gas.
Cool.
Cow_tipping.
64It's because it's the only one you can (potentially) resell for a profit. Collector cars aside. It should be just a home, but in the buble people began to equate it to their bank account. People ask "why continue to make payments I can afford on a house that's worth less than I owe?"
That's the crux. A house's 'market value' is meaningless if it's not on the market.
So, Sac St. Economy Professors buying real estate at the top of the market? Wow, I'd hate to be learning Economics from one of them, they really don't understand the concept on economics it seems. I guess someone put a gun to their heads to buy a home instead of renting one. If I were a student there I'd change majors or transfer to another school.
I wondered about that too, Jeff. When I moved here, I didn't have enough money saved for a down payment. Instead of going exotic, I rented and I still rent now. They must have thought that as "professors" they were entitled to houses. Sac State doesn't even pay at well as the community colleges in the area.
Maybe this will help the smaller mom & pop owners as they can might be able to fill some of the vacancies left by the bigger giants. The dinosaurs are dying. But damn, what a time for them to open in a enviorment like this. I see no hope for a quick turnaround for these strip malls.
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