Pardee's Over
From Home Front:
In 2004, the firm [Pardee Homes] plunked down more than $150 million for land and improvements at the very height of the land boom then sweeping the Central Valley. It bought land to build more than 600 homes in Natomas, 1,100 in Rancho Cordova's Sunrise Douglas area and 2,200 homes on the north side of Stockton. It also started up a new Sacramento division.Related Posts:
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The market here in Sacramento then soured so quickly that Pardee decided it couldn't sell at prices good enough to recoup the boom-era price it paid for land. So it fenced off Natomas Meadows and shut it all down...Last week it sold 637 lots on 100 acres north of downtown Sacramento at its first big project in the capital city: Natomas Meadows.
-Pardee Time in Sacramento?
-Moths to the Flame
From Bloomberg:
Las Vegas had the biggest drop on a per-square foot basis, falling 33 percent in July from a year earlier, New York-based real estate data company Radar Logic Inc. said in a report today. Los Angeles, Phoenix, Sacramento and San ["We're Immune"] Francisco each dropped about 28 percent. Three of the five worst-performing markets were in California.
16 comments:
You spend $150M and don't bother to sepend 5 minutes comparing the prices you want with the incomes people make in the area?
Companies like this should go bankrupt and let their stupidity be an example to others.
Jacob,
Everyone wants to live here. Especially rich people. Local incomes don't matter. Prices will continue up and up through the clouds.
Fifteen percent next year... it's in the bag.
Chuck
This is such a bloodbath unfolding before our eyes. I read these headlines and snippets and just think, Amazing! Worse than I imagined it would get.
http://news.yahoo.com/s/nm/20081003/ts_nm/us_california_loan_2
California may need emergency $7 billion loan: report
"The economic fallout from this national credit crisis continues to drain state tax coffers, making it even more difficult to weather the continuation of frozen credit markets for any length of time. I will continue to do all I can to encourage the passage of the emergency rescue plan," Schwarzenegger wrote.
The problem is now in our backyard.
My question is ... who bought this toxic land from pardee and how much did they pay ... cos I think I see a cascading bankruptcy train comming ...
Cool.
Cow_tipping.
DD -
The problem was always in our backyard.
As I like to point out.
1998 - $70 billion budget
2008 - $145 billion budget
Anyone care to excuse that?
Smf...
Ok let's say we slash the budget 25%. That would be just about what true inflation would have been from 1998 to the present. How would that make any difference under the present conditions we face?
It doesn't matter how high the deficit is, when credit is accessible, governments can function and people can keep their jobs. When it's not available, the reverse is true.
If California cannot access enough cash to finance daily operations, what happens?
How would that make any difference under the present conditions we face?
Well for one, instead of begging for $7 billion, maybe we'd just have to beg for $5 billion.
If California cannot access enough cash to finance daily operations, what happens?
I suppose what the Governator eluded to, the Treasury gets out the big pail and starts bailing.
Credit is still available for those who deserve it.
It is a matter of quantity.
I want to buy a Ferrari, but obviously no one would lend me the money for it.
Do I have the right to cry over that?
But if I wanted to purchase a $25K car, I would likely get easy approval.
The State is asking for money that in all likelihood cannot be paid back, specially since tax revenues from homes will continue to go down.
Yea I agree. This bailout won't help with credit, the problem with credit is people and businesses and governments don't qualify.
Too much debt compared to assets, not enough income, that isn't gone change until the debt gets paid back slowly over several years.
I have an unsecured personal line of credit at Wells, and several credit cards. My limits have not been reduced, and some have been raised recently. I also have no debt and perfect credit.
PR
I guess that would include forced deficit reductions...no worries, Hank's at helm, and BB is working the bilge pump after finally getting Congress to back a porked up bill. The Governator gets his money and we get to go another week before the other shoe drops.
SMF
That's probably true for today. As usual, we get the money now and offer a promise to pay later. It all gets financed in the long term bond market with hopes that people will actually buy those bonds. Love to see what rates they'll hang on that stuff.
At least we get our FDIC insured accounts pumped up to $250K. That might only cost us an additional $ ??? Billion as the FDIC reflates their cash position to buy future bank failures, but at this point it useless to keep counting.
It will now be interesting to see if Washington has any clue how to stop the price declines in RE.
Being how large and diverse California's economy is, it's actually pretty scary that we can't find a lender. The scary part is knowing that if it could happen to California, it really is plausible that it could happen to the Federal government. Who does the bailing then?
It will now be interesting to see if Washington has any clue how to stop the price declines in RE.
Why should they?
Less money spent on housing is more money spent in other places.
"it really is plausible that it could happen to the Federal government."
The key indicator to me is how much confidence has been restored after we put this plan in motion. Following the last Treasury International Capital Report, net foreign investment dropped to a mere + $6 Bilion for the month of August. We've added a multiple of debt so we must be pushing upwards of $100B required monthly. If foreign individuals and countries don't buy enough of our debt each month, we have to finance it ourselves. And that's on top of what we're spending to keep the financial ship afloat.
Rates on Treasuries would have to rise high enough to meet the risk foreign investors are willing to take in order to take up our monthly nut. Paulson knows this and how important it is to restore confidence immediately to protect bond values. If that confidence does not return quickly, rates will go through the roof and take bonds down with them.
Should that occur, then it seems that affordability would fall and RE prices will fall to meet those lower levels.
Next week should be interesting.
Failout passes and the market tanks... now that's what I call leadership >; )
"Less money spent on housing is more money spent in other places."
Exactly and perfectly put! More money spent on food, energy, and now taxes; the less that is available for everything else.
"Three of the five worst areas"
Oh... California will improve that trend!
Fifteen percent next year... it's in the bag.
Chuck
Chuck, wow, its rare when I'm more optimistic than the old time bloggers! 20%+ drop is in the bag for Cali. ;)
As SMF points alludes, the next shoe to drop is the California state budget. They cannot borrow what they need to get to April!
Plus... I know of multiple aerospace companies getting ready for moves or layoffs (or both) that will really impact the highest cost state (for them) to do business in.
This will accelerate the Los Angeles and San Diego declines.
Following the last Treasury International Capital Report, net foreign investment dropped to a mere + $6 Bilion for the month of August. We've added a multiple of debt so we must be pushing upwards of $100B required monthly.
I should not have read that. Its too early in the morning to start drinking... the implications are... Scary. Thanks for the info though DD.
Got Popcorn?
Neil
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