Saturday, October 25, 2008

Sacramento Real Estate Market - October 2008 Water Cooler

Post off-topic links, observations, and stories about the Sacramento real estate market here. Please read the comment policy before posting.


sacramentia said...

What propositions on the upcoming ballot do you think will create jobs here in Sacramento? My list-

- 1: High Speed Rail
- 7: Renewable Energy Generation
- 10: Alt-e Bonds

Jennifer said...

Do you guys think this bailout is going to prop up home values around here or prevent banks from dumping their properties on the market. I was hoping the bailout would fail and everything would crash. I have no debt, and cash in the bank.

Jacob said...

The bailout will not stop anything imo. Wall street got what they wanted, the stock market was up before the vote and crashed after they got what they wanted.

Come Monday you still have mounting job losses, companies still will have trouble getting credit cause they are in bad shape. Most companies are investment firms in one way or another or are tied to retail sales. Both are hurting and will be for some time.

Maybe if the bill had another 100B in stimulus it could have helped the xmas retail season, now that is doomed and I think it will be the final nail in the coffin for some companies.

Next week the DOW cracks 10000 and S&P could crack 1000.

Also a lot of derivatives start settling over the next 3 weeks from what I have read. I don't really understand that process but if the bets settle then the investment banks or other institutions won't be able to keep the investment on their books at whatever imaginary value they have for it, it will settle and losses will be taken.

The bailout will help a few of the healthy companies stay healthy, and allow them to eat up the other companies. Wells, Citi, JP Morgan, BofA, and Goldman Sachs. The rest of the companies are left to die.

This bill does nothing to free up credit. we just hope some banks will start lending again. But guess what, they are lending, IF you qualify.

You have to document you income, and get this, be able to pay back what you borrow, insane. How will we survive...

Meanwhile commodity prices rise, hopefully there is more demand destruction in energy and oil prices fall, if those rise permanently it could be the knockout punch for our entire economy.

People continue to get squeezed from every end.

Banks will try more options to keep people in their homes, but it won't work cause the homes are worth so much less they don't want to be "saved". Especially investors.

Alt A resets are just getting started, foreclosures have not peaked. I am hoping foreclosures peak sometime next year, but even then, it looks like 2009 in a bad time to buy and no 2010 is looking worse and worse. Maybe 2011, but if not, in 2012 you have a lot of boomers start to retire which could be another leg down in pricing.

So I sit and wait.

sacramentia said...

@Jennifer - Yes, and Yes.

The bill has language in it that allows the government managers to modify the terms of the loans once they purchase the paper. I bet that the Alt-A crisis won't happen based on this bill.

No debt and cash in the bank, well, I think this was a government transfer of wealth away from people like you. I don't agree with it, but that's how I see it.

You never know, it just may work. 6% of GDP is a massive number and has a good track record of working. We don't have to deflate to no debt, just a more sustainable level.

The think I am most amazed at is the lack of press on the alt-e sections of the bill. It is a good read:

Diggin Deeper said...
This comment has been removed by the author.
Diggin Deeper said...

Jacob, that's a pretty good assessment and I would agree with most of what you've said. I think the bailout plan will likely turn out to be more symbolic than effective. There is so much that is completely out of our control, and our financial system is interwoven throughout every bank, major company, and country in the world.

We face a confidence crisis as much a credit crisis. The world is overleveraged to the tune of an estimated 20 to 25-1. Face value of the derivative markets (complex debt and credit instruments) is estimated to be $54 Trillion or just a bit above the entire world's GDP of approximately $45-50 Trillion. Not bad, a tad more than a dollar of debt to a dollar of produced equity. But the true value of these derivatives, subject to loss, is 20 to 25 times the face value of $54 Trillion and that pushes risk to over $1 Quadrillion. Not good. One can see why Paulson handed Bush and Congress a "back of the cocktail napkin" proposal. He and Bernanke know, based on the OTC derivative markets, how serious things could get.

Keep in mind that a loss by one party theoretically become gains to another so there is some balance that occurs in the derivative markets. The trouble is our banks and financials are holding a big slice of this levered debt, in the most vulnerable of mortgage backed securities. Again, not good.

To learn more about this:

As they say cash is king but keep in mind that cash has to maintain its value. When one adds what we've injected so far through loans, stimulus plans, bailouts, Fed injections, etc. I question just how long our dollar maintains its current value no matter where its stashed.

Meld it all together and lack of confidence will trump lack of credit and the result does not put a floor under home prices. We've seen what lack of confidence has done in our little community. Prices have pushed down nearly 50% while credit, up to this point, has remained attractive and stable.

Bottomline...nothing changes regarding foreclosures... bad assets still have to come to the market for disposal, and those assets continue to pressure prices downward or at least hold them at current levels for a long time.

Jennifer said...

I called our congress folks and told them I did not like sections 109 and 110 the parts about foreclosure assistance by writing down principal. That really ticks me off. He said that was already law through the HOPE program.

Socialism is at our doorstep. Get ready for the bread lines!!!!!

Diggin Deeper said...

In today's Sac Bee

Deal Won't Help Area, Experts Say...

"The government buying these securities does not allow them to substantially expand loan modifications," said Paul Leonard, California director of the Center for Responsible Lending, a consumer advocacy group.

Leonard and others say the government won't be able to alter loans on its own because of the way the mortgage-backed securities it is buying are structured.

Without unilateral authority to modify loans, they say, the rising tide of foreclosures – 500 or more every week in the Sacramento area alone – won't soon subside. More bank-owned homes on the market mean home values will continue to fall."

"If you don't firm up the bottom of the housing market, the bottom of the pyramid will be like quicksand that will keep pulling down the structure," said Timothy Canova, economics professor at Southern California's Chapman University School of Law. "I think in six months to a year they will be back asking for another enormous bailout because it didn't deal with the root causes of the problem."

I've come to a rational decision to "throw out the incumbents" as my strategy on election day regardless of the political affiliation of the challenger.

One could put a trained parrot on the ballot and get more done...

Matsui...not my vote, Obama, McCain, not my vote, Fargo, not my vote, etc. etc. Bond issues? Nope, not unless you can show me where we've reduced spending by an equal or greater amount somewhere else in the budget.

Quite frankly, the American public just scared the hell out of elected officials for the first time I can ever remember. The halls of Congress were shaking as this wasn't supposed to happen so close to an election. It would be justice served to carry that all the way through the election.

Unfortunately most people are too passionate about party politics to care, and will vote the way their party tells them. So be it, but screw the parties, I'm voting to "throw the bums out"

anon1137 said...

In case you missed it, SNL lampooned the bailout new conference on Cspan:

Don't miss their version of the VP debate either.

paranoid renter said...

Sacramento real estate now takes a back seat. :-)

Too much stuff going on in the global financial markets.

Looks like very few houses coming on the market...I guess folks are figuring out that it's better to foreclose than to sell. People have probably stopped making payments, then, while the banks sort out their mess before they even have the cycles to process foreclosures.

The next few months should be fun. I may not have a job at the end of it, but it'll still be fun reading all the ways we've been scammed by the folks on wally street (with the govt's blessings, of course)!

smf said...

We have a friend who is trying to buy a house in our about shadow market!!


There have been plenty of houses that are not even on the MLS, and even a call to see how many would be interested in selling elicited far more response than what we thought.

Diggin Deeper said...

Wow the VIX is really soaring. Well over 50 at this time. Can't ever remember it breaking 47 in current history. Talk about blood in the streets. Anyone buying or selling a home, outside of foreclosure, has got to completely oblivious to what's going on around them.

Watch for an emergency rate cut in the very near term...My guess is that the Fed will shoot one of the last arrows in the quiver...probably .5%.

Keep your heads down.

Rich said...

We happened on an open house this weekend (for an owner occupied) where the agent was quick to tell us that sales now matched new listings, which he took to mean that as soon as things came on the market they were snapped up. I did mention all the empty houses that banks were't listing, and he took that to mean that they banks were doing the smart thing by not flooding the market. okaaay. The 1800sf 1994 place I'm watching, currently at 250K, has been on the market for >4 months.

Rocklin BTW

Deflationary Jane said...


I have a girlfriend who was looking in Sac but got disgusted (her agent seemed good then went off the grid). When we spoke last week, she told me she was contacted by 2 major brokers to see if she was still looking and would she like to see their list of properties not on the MLS yet. Apparently the list is huge.

They also upped her price limit without even asking - yep that credit market sure has contracted >; )

Taun said...

We (me and the Mrs.) have had our feet dangled in the market for about a month now. Looking in the Carmichael, Fair Oaks, Citrus Heights East areas, our realtor tells us inventory is approaching 3 month levels and is "turning into a seller's market" again. I don't know how true that is, but we found a house that we liked that was down almost 50% from peak ($529k in '06 to $250k listed). There were nine other offers on the house including ours!

Needless to say, we did not want to get caught up in a feeding frenzy or bidding war, so we'll just keep looking.

In the meantime, I'm not seeing much "credit freezing" in the real world, considering the number of offers and bids we're up against whenever we find a property we like. Have any of you seen otherwise? Is it turning into a seller's market again?

Jacob said...

It is a sellers market for the low end. Homes below $250k it seems the banks are capitulating now, pricing well below market price and getting multiple offers.

If a home is worth $250k now based on comps and you list it for $199k you get a lot of offers, in some cases maybe even more than the $250k target.

But even if you get a great deal, I think you would be underwater in a year or less anyway.

The credit crunch is a joke. The problem is tha nobody qualifies when you factor in their ability to repay (which was not done for several years). We should have had a recession in 2000 but really didnt and all that growth was fake.

I too had a realtor tell me that inventory is leveling off this weekend. Sales were up, inventory was down and rocklin was at 4.5 months inventory or something like that.

I told him that foreclosures hadn't peaked and that banks were holding back a lot of homes, also unemployement was still rising so I was in wait and see mode.

He seemed like a nice guy, and really the only data they have is mls. But I had heard that Wells has 12k homs stockpiled...

So we throw $850B (funny MSM keeps reporting it as $700B) onto the fire, but it is just more fuel...

DOW down below $10k, another down day for the S&P and it will crack $1000.

FED will cut 75-100 basis points this week. Market will rally for half a day or maybe a full day.

Jacob said...

The FED needs to cut rates to .25 and start loaning money directly to the people to buy homes.

And make it illegal to charge a fee based on the sale price of realestate. Make it a flat price.

That would jump start the realestate market, and might create a long term bottom and in a few years prices could go up and the FED could slowly start raising rates and stop loaning alltogether (eventually).

Sold in '05 said...

Start the Recovery... End Real Estate Speculation NOW!

Who will start the political movement to end short term flipping of homes? If we were to set the capital gains tax on the sale of NON-primary homes owned for less than 5 years at something punitive like 90%, we would instantly eliminate the artificial demand, and allow a much quicker return to proper pricing and then a vastly more reliable market going forward. Until we get a normal market, we will not have a lasting recovery and we will continue to build financial sand castles like the one we are seeing wash away right now.

Diggin Deeper said...

Too little...too late...too bad...

It appears the RE market is taking care of itself while the stock market punishes Wall St excesses at the same time.

Two business days into the "rescue" and the markets are giving answers to Congress...two thumbs down.

The easiest way to stay out of bread lines is to resist tampering with markets that are fully capable of finding "fair value".

Imo, more punitive regulations will just add time and depth to the problem. Good examples were all the three letter social programs employed during the 30's Depression. They didn't solve the problem. It took a World War, millions of lives, and the need to rebuild entire countries, to actually see growth again.

Patient Renter said...

The FED needs to cut rates to .25 and start loaning money directly to the people to buy homes.

I doubt the Fed would ever loan direct to citizens. That defeats the whole reason they were setup in the first place - so that they could control money and credit to the benefit of their member banks by giving them first access to newly created money. Letting citizens in on the action eliminates the advantage that banks have.

Who will start the political movement to end short term flipping of homes?

Speculation is certainly annoying, particularly if you actually want to buy a home to live in, but if speculators want to buy declining assets then let 'em. Best to not fight something that is irrational (such as greed).

Sold in '05 said...

"Speculation is certainly annoying, particularly if you actually want to buy a home to live in, but if speculators want to buy declining assets then let 'em. Best to not fight something that is irrational (such as greed)."

Good point. They have done a masterful job of hammering down the comparables over the last year. Without them, it would have taken longer to get these values reset downward.


jason said...

First time poster here. I've been lurking for quite some time.

I just wanted to point out that NBC has censored a Saturday Night Live skit from their website regarding all the financial bailouts. Every other skit from the Oct 4th show is still online at but this skit has mysteriously vanished around 7 pm pacific today. I seriously doubt this was an accident. Regardless of how you feel about the bailouts this kind of censorship should not be allowed.

Please call nbc and ask them to put the skit back online 212-664-4444

A portion of the skit can be found here between 1:20 and 1:45

Full transcript below:

[ open on C-Span graphic ]

Announcer: Next on C-Span: President Bush, House Speaker Nancy Pelosi, and Congressman Barney Frank appeared earlier today at a joint press conference to comment on the financial bailout that was just passed by Congress.

[ dissolve to Bush, Pelosi, and Frank standing before reporters ]

President George W. Bush: Good afternoon. [ reading from notes ] On Friday, this Congress was able to put aside its differences... and come together in a bipartisan spirit... to pass legislation that was absolutely vital... to ensre world confidence... in our financial markets... and to prevent a collapse in credit. Which would have had a catastrophic effect on our economy. Approving this bill was the right thing to do... and I commend outr legislators for their actions. Speaker Pelosi?

Nancy Pelosi: [ she steps forward ] Thank you, Mr. President. I, too, applaud Congress for its vote, and add that, without your help, this bill might well have failed. [ Bush nods proudly ] Even though this financial crisis was 100% the fault of your administration... [ Bush adjusts his tie ] and it's INSANE economic policies, and, though I'm sure you'll agree, you WILL go down in history as our WORST president ever... this one time, you did manage somehow to not screw things up, and I want to acknowledge that.

President George W. Bush: Thank you, Madam Speaker. I was glad to do it!

[ Frank steps forward ]

Barney Frank: Let me ADD, Mr. President... I was also pleased to see that, for the first time in your eight years in office, and, possibly, your ENTIRE LIFE, you were able to demonstrate leadership, not to mention simple human decency!

President George W. Bush: [ while waving to members of the press ] You bet. You bet.

Nancy Pelosi: [ returning to the front ] Let's not forget, Mr. President, that it was the Democrats who first sounded the alarm about the risky mortgage loans that Fannie Mae and Freddie Mac were encouraging, and that your party resisted ALL our efforts to reign them in.

President George W. Bush: Wait, wait, wait! Wasn't it MY administration that warned about the problem SIX years ago? [ Pelosi rolls her eyes nervously ] And it was the DEMOCRATS who refused to listen?!

Nancy Pelosi: W-what?! N-no. W-who told you that? That -- that's crazy! It's completely the other way around!

President George W. Bush: Okay.

Barney Frank: [ whispering in Pelosi's ear ] Uh, actually, this time -- this time, he's sort of right.

Nancy Pelosi: Shhh! Don't say anything -- he doesn't know!

[ Frank nods ]

Nancy Pelosi: Now, there was another point we wanted to make here, and, uh, Mr. President, you are welcome to stay.

President George W. Bush: Thank you, I'd like that! [ he steps closer ]

Nancy Pelosi: Back there would be better.

President George W. Bush: No problem! [ he steps back, but mugs for the camera between Pelosi and Frank as they speak ]

Nancy Pelosi: In the past few weeks, this debate has focused on the wisdom of government intervention in the housing markets. What hasn't been talked about is that, behind every home foreclosure, there is a story of real suffering by real Americans. People who, but for the grace of God, could be you or your neighbors. And, today, we'd like to introduce you to some of them. [ two young men step forward ] Michael McCune and Jerome Gant, two ordinary Americans whose only crime was to play by the rules, and who now find themselves facing eviction from their homes. Please tell us your story.

Michael McCune: Uhhh, well... to start, I still don't understand how this happened. I mean, I mean -- I fot all the requirements for a subprime mortgage. Uhhh -- no credit history...

Jerome Gant: Same here!

Michael McCune: job!

Jerome Gant: Me, neither!

Michael McCune: ...minor criminal record!

Jerome Gant: Dit-to!

Michael McCune: ...dishonorable discharge from the Army!

Jerome Gant: Yeah, I got mine right here!

Michael McCune: ...uh, drug problems!

Jerome Gant: Me, too!

Michael McCune: ...alcohol problems!

Jerome Gant: Guilty as charged!

Michael McCune: ...gambling addiction!

Jerome Gant: Yeah!

Michael McCune: ...pregnant girlfriend -- actually, TWO pregnane girlfriends!

Jerome Gant: Just the one!

Michael McCune: Yeah. Well, anyway, I was talked into a "balloon mortgage", where you move into the house, and then you get to live in it, and you don't have to pay money or anything to the bank, but then, later, you DO!

Jerome Gant: Yeah! What up with that?!

Michael McCune: Yeah! I mean, you could say I'm a double-victim, since I've never had a job, and now I don't have a home!

Jerome Gant: Well, I'm a triple-victim, 'cause I've also been charged with arson, for allegedly setting fire to the house they evicted me from.

Nancy Pelosi: You are -- you are both in our thoughts. [ she hugs Michael, but avoids hugging Jerome ]

Michael McCune: Thank you!

Jerome Gant: That's nice!

Nancy Pelosi: This is -- this is Greg Phillips, and his wife Judy. [ the Phillips' step forward ] How did the housing market collapse affect you?

Greg Phillips: Well, my wife and I bought two dozen timeshare condos, which we heavily mortgaged in order to flip them six months later for TRIPLE the purchase price, and then the real estate market tanked.

Nancy Pelosi: And you were doing this through...?

Judy Phillips: Misrepresentation.

Nancy Pelosi: Uh, no -- I meant, did you do this out of your home, or...?

Judy Phillips: Out of greed.

Greg Phillips: Yes, out of greed.

Nancy Pelosi: And then, now, with the real estate market down, you're stuck with two dozen timeshare condos that you can't sell?

Judy Phillips: Unless we sold them for, like, ten per cent more than we paid.

Nancy Pelosi: So, you -- you can't make your mortgage payment?

Greg Phillips: Not without selling the boat... or putting off eseential cosmetic surgery.

[ a pregnant woman joins the Phillips ]

Nancy Pelosi: And, uh -- who is this?

Greg Phillips: This is Crystal, our surrogate mother.

Crystal: Whasssssupppp?!!!

Greg Phillips: You see... I can't have children -- without getting BAD stretch marks.

Nancy Pelosi: You are also in our thoughts and prayers.

[ the Phillips' step away, as the Sandlers step forward ]

Nancy Pelosi: This is Herbert and Marion Sandler. Tell us your story.

Herbert Sandler: My wife and I had a company which aggressively marketed subprime mortgages, and then bundled them as securities to sell to banks such as Wachovia. Today, our portfolio's worth almost nothing, though, at one point, it was worth close to $19 billion.

Nancy Pelosi: My God, I am so sorry! Were you able to sell it for anything?

Herbert Sandler: Yes! For $24 billion!

Nancy Pelosi: I see. So, in that sense... you're not here to speak as actual victims?

Herbert Sandler: [ he chuckles ] No, no, no! That would be Wachovia Bank!

Marion Sandler: Actually, we've done quite well. We're very happy!

Herbert Sandler: We were sort of wondering why -- we were sort of wondering why you asked us to come today.

Marion Sandler: Anyway, it's -- it's delightful to see you, Nancy!

[ Pelosi hugs Mrs. Sandler ]

Herbert Sandler: And thank you, Congressman Frank, as well as many Republicans, for helping block congressional oversight of our corrupt activity. [ he and his wife step away ]

Barney Frank: Not at all! But... let me say something else here: you know, many of you are probably wondering where did that $700 billion missing from our economy go? And to help answer that, let me introduce our good friend, billionaire Hedge Funds manager, George Soros.

[ George Soros steps forward ]

George Soros: So, what become of that $700 billion? Well, basically, it belongs to ME now! Actually, it's not even American dollars any more, but Swiss francs, since I have taken a short position against the dollar.

President George W. Bush: Oh, really? That's not good.

George Soros: You're not to speak. I don't like you. [ Bush backs away ] The U.S. Dollar will have to be devalued sometime next week, either Tuesday or Wednesday. I haven't decided which yet; it would depend on how I feel.

Barney Frank: Well, thank you very much, Mr. Soros. You're a great man!

George Soros: Yes. Could I just add that, uh, even though you know what's coming, you won't be able to do anything about it!

Nancy Pelosi: You're a wise man, Mr. Soros, and a powerful one.

Barney Frank: You are BETTER than us!

George Soros: Mmm-hmm. [ turns to face Mr. Phillips ] Your wife is physically attractive. Sell her to me, please.

Greg Phillips: Sure.

Judy Phillips: Okay!

[ dissolve to C-Span graphic card ]

Announcer: We will now leave this press conference and join a discussion of Sen. McCain's foreign policy issues already in progress, where Gov. Palin is about to say something embarrassing.

[ fade ]

RV6Flyer said...

1733 40th street went pending sale on its first day on the market. It was a foreclosure purchased for $345,000 just a month or two ago. The guy cleaned up the landscaping, replaced the appliances the former owners took, then put on the market for $440,000. Sold in one day.
We had an offer in with the bank at $330,000, just a bit too low.
So things are still moving quickly in some markets, even bubble prices.

anon1137 said...

Re: 1733 40th St., it's amazing to me that someone would pay $400K to live within half block of a freeway and a train track. You can do a lot of things to improve a house, but you can't change its location.

I agree that the global financial crisis isn't having much of an effect on the Sacramento housing market. California banks are still making crazy decisions, IMO.

Diggin Deeper said...

Even in Sacramento, there's going to be an price that can be exploited. I agree with anon, that's not the location in the 40's most would be looking for.

Looks like the Fed accomplished it's rate cut without actually cutting the discount rate. It set a floor on its overnight lending rate at 1.25%, fully 75 basis points below the 2.0% discount rate.

As someone said before, the amount of money the Fed can muster is limitless...ain't that the truth?

Patient Renter said...

"I agree that the global financial crisis isn't having much of an effect on the Sacramento housing market."

Because I think it's the other way around. The Sacramento housing market (and others) are having an effect on the global financial crisis.

Patient Renter said...
This comment has been removed by the author.
Patient Renter said...

It took a whopping four days for the bailout to be proven unnecessary. With the Fed's new commercial paper lending facility, the primary cause of the credit crisis will see some relief.

As Dean Baker said this morning: "the threat of a complete meltdown in the absence of a bailout was nonsense and the media once again got taken for a ride by the Bush administration."

You can add Congress to the list of people taken for a ride. But what else is new?

Diggin Deeper said...

"the primary cause of the credit crisis will see some relief."

No doubt PR and deflation will slow as inflation picks up the slack. You can't increase the money supply or the deficit without having an eventual affect on purchasing power... The dollar was down today, most likely in response to the Fed's recent actions. When the money supply tally is complete, BB and Hank will have accomplished the task...greasing the short term credit market back to health...but it will come at a price....

Don't see how a new administration will have anything left in the coffers to make good on spending promises. There just won't be anything but red ink to deal with....

No easy fixes, no easy outs.

RV6Flyer said...

"Re: 1733 40th St., it's amazing to me that someone would pay $400K to live within half block of a freeway and a train track. You can do a lot of things to improve a house, but you can't change its location."

The same can be said for the T Street Parkway, yet it is highly sought after. Those are not train tracks either, they are light rail tracks, a good selling point. That is the station I get on and off at every day. Wouldn't call this location Fab 40's, but would not call it bad. It is actually quieter than being on Folsom Blvd a block away in the "Fab 40's."

anon1137 said...

I guess it's all relative. My health and my family's health is pretty important to me so I wouldn't want to live so close to a constant source of noise and air pollution.

HOUSE2008 said...

What propositions on the upcoming ballot do you think will create jobs here in Sacramento? My list-


I believe we NEED to mitigate our near future water crises by building DSP(desalinization plants) all around the coast of the U.S. Around 1200 will do. This will act as a shock absorber in the future against droughts. This in turn will help our agiculture be more efficient and possibly increase food crop by negating drought years.

Secondly by installing DSP the one thing Americans are good at is consuming. We can do our part by sucking up the rising ocean waters by using it to turn Las Vegas into a tropical oasis. Death valley into a rain forest ect & mandate every lawn in America be green & use 50 gal per watering. There, no more rising oceans. I'm sure many people on this board could find the advantages of limitless water could do for every citizen & corporation.

RV6Flyer said...

"My health and my family's health is pretty important to me so I wouldn't want to live so close to a constant source of noise and air pollution."

So you live further outside of a city/town and just drive more, thus creating more air and noise pollution?
I guess I see things differently. I only use about one tank of gas per month. I take RT to work. Walk to the grocery. Ride a bike or walk to local restaurants and entertainment. When I lived in the hills I was far away from most conveniences, spent much more time in a vehicle, and less time socializing with my family and neighbors. Also, most of the smog from the city (SF and Sac) blows up to the foot hills, so wouldn't really say the air is much better.

anon1137 said...

I didn't say that I thought all areas of the city were unsafe because of noise and air pollution, just that half a block from the freeway is too close for me. A few blocks and some large trees can make a big difference. They've done studies recently of particulate pollution around schools located next to busy roads that I think shows this effect.

Patient Renter said...

Jeez, hope everyone's 401ks are ok. Probably best to not look, eh?

Re this:

So you live further outside of a city/town and just drive more

Some people live and work in the suburbs :)

RV6Flyer said...

"Re this:

So you live further outside of a city/town and just drive more

Some people live and work in the suburbs :)"

You still drive a ton in the burbs. I don't see many people hopping on their bikes to get to the Galleria. People will get in their car to drive 1/4 mile to the market, er SUPER Market.

anon1137 said...

I agree. The burbs are designed for cars. You can't even walk on the sidewalks in new subdivisions. They're barely the width of one person and they're cut by huge driveways every 50 feet.

HousingRealist said...

Jennifer, I can only imagine that you are a state employee. With the comment that "I was hoping the bailout would fail and everything would crash," you must be clueless as to what that would mean for the private sector or are you on the state gravy train. Which is it? I have a ton of cash too, however I don't suck at the teet of the public sector, and therefore would like the private sector to make it through this without financial armageddon.

manny_hff said...

My wife and I sold our house and closed escrow last month. We were fortunate to come out of it with some good equity intact. We have a need for a bigger house as our 2/1 in East Sac wasn't cutting it. Now that we're back to renting, the question is when is the right time buy. Sure there are some relative deals out there, but will a purchase now continue to depreciate for the next several weeks, months, years? And how do you get the lists of REO's? Dealing with Short Sales are for the birds.

Jacob said...

I'm not touching anything until foreclosures peak. When that happens you will have 2-5 years to get in on the ground floor imo.

Cmyst said...

We put an offer on a short sale property several weeks ago. We don't really expect it to be accepted, and we were told it might take up to 60 days for them to get back to us.
If it is accepted, we don't know if we can still get the loan that we had qualified for before the freeze/crash. And if we can get the loan, we expect that the property will continue to lose value, and we are willing to live with that.
If the offer isn't accepted, we're out of the game until next summer or later. There really isn't any rush. We made our offer because we're familiar with this property, and it has many features that make it nearly perfect for us. We were advised to make an offer quickly, as it would be "snapped up" (I hate that term). It went on the market in July and there has been no interest in it at all other than ourselves, we offered about 50K below asking, and the agent had set the price at what she considered a very low asking price in order to generate a bidding war.
We don't mind the whole "short sale" vibe because we're not in any big hurry anyway. I don't think the market will be heading up for years, and there will be a relentless supply of foreclosed homes for years. People here had spoken of possibly de-constructing houses and selling what materials could be sold. That seemed far-fetched at the time, but it sure seems logical now.

RV6Flyer said...

I hope he is not a bubble blogger becuase I didn't ask permission to post this, but I can't help but to share this email from a financial planner friend from last Friday.

So I’m talking to the umpteenth customer about their account and telling them to hold the heck on and ride this thing out. I tell him it’s like the movie Braveheart where Mel Gibson is saying, “Hold…..Hold…..Hold….Hold….” while the army is advancing on them. He’s got to hold on in the face of fear.

He tells me, “Well you remember what happened to Mel at the end of the movie. You’re saying I may still get my guts ripped out.”


off topic but anyone have a good recommendation for a good, reliable, competent housekeepper? thanks.

Diggin Deeper said...

"You’re saying I may still get my guts ripped out.”

That's what they said during the bust. World Com, "too big to fail", Enron...same BS. Some solid stocks from that era still haven't recovered.

In this market, imho, it isn't about making money it's about preserving it. He who loses least wins...

Same with real estate here in Sac. If you've gotten out with an equity profit, renting for awhile is not a bad option. You're basically staying out of the way until the market settles down...the only thing you have to manage are the interest rates which are low now but may not stay low for long....

Jacob said...

Get 3-4% in the bank while true inflation is around 12% or gameble in the stock market and lose 35% or more, on top of the inflation losses.

I'll leave it in the bank.

I hope we start to level off soon but can wait it out. I would like to buy now but won't overpay, the bottom will eventually get here and stay here for a decade.

mopar777 said...

Hey Jacob, If you're a RE investor waiting this thing out like I am then you're saving for a depreciating asset. I think that we'll see more deflation in the RE market between now and bottom than we'll see inflation eating away at our savings. Then, if you buy a good rental, rent inflation will protect you in the long run. Not all people can sucessfully deal with tennants though.

Buying Time said...

What they are doing with our 700 billion dollars....

"Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions."

Patient Renter said...

Listening to Krugman bash Greenspan on Fresh Air this morning, it occured to me that the anti-free marketers (aside from tackling straw-men) are trying to frame Greenspan as a free-marketer whose lack of regulation demonstrates the failure of the free market - nevermind that the very existence of the Fed, Greenspan's fame-maker, prohibits there from even being a free market.

pierce said...

What a great blog, interesting topics! I love reading this material.

Jacob said...

mopar: Yea that is how I feel. I mean I could put my money in the stock market and lose money, I could buy gold, silver, oil and I would be down, everything is depreciating.

At least in a CD I get to keep the principal and get some interest to take care of some of the inflation.

anon1137 said...

The September sales data by zip code is available on Dataquick's web site. Sacbee doesn't seem to be posting it anymore.

Deflationary Jane said...

from the WSJ:

'Though California represents about 12% of the nation's population, its homes account for 34% of the loans in a typical mortgage-backed security, according to Fitch Ratings. "California doesn't have a Wall Street problem. Wall Street has a California problem," says Christopher Thornberg, principal at Los-Angeles based Beacon Economics and member of the California Controller's Council of Economic Advisors.'

Until prices and incomes come back within traditional ratios, 'taint nothin gonna get fixed. With job losses and wage cuts, it's going to be a while.

Patient Renter said...

Until prices and incomes come back within traditional ratios, 'taint nothin gonna get fixed.

Tell that to the boyz in Washington who are busy loading up the money canons..

Deflationary Jane said...

Interesting news. The former Mr. Jane's dept was just told they had to reduce their head count by 8% this year and 12% next year.

That'll leave a mark on the local market.

patient renter said...

DJ, sounds like you've had a lot going on recently. Welcome back BTW.

Deflationary Jane said...

"sounds like you have lots going on"

Patient, that just might be the understatement of the year. Luckily I'm one of those ENTJ types who thrive on planning and change >; )