"A New Fire Under the Sacramento Housing Market"
From the Sacramento Bee:
Sacramento-area home prices declined at nearly triple the national average during the past year, according to a new Loan Performance Home Price Index from First American CoreLogic. The property research firm said September home prices in El Dorado, Placer, Sacramento and Yolo counties fell 28 percent from the same month in 2007.From the Sacramento Business Journal:
[Per CAR] the median price of an existing home in Sacramento fell 34.8 percent to $195,000, with the city of Sacramento seeing a 45.1 percent drop to $150,000. Elsewhere in the region, the median price of a home in El Dorado County was $387,000, down 3.7 percent; in Placer County it was $320,000, down 20 percent; while in Yolo County, it was $279,000, down 22.5 percent.From the Seatle PI:
The biggest annual metro-area drops were in Merced, Stockton and Modesto, Calif., down 42.3 percent, 41.4 percent and 36.7 percent, respectively, according to the Federal Housing Finance Agency index.According to FHFA (formerly OFHEO), Sacramento metro home prices dropped 22.5%, another record decline.
From the Sacramento Bee:
The federal government's newest bailout package has lit a new fire under the Sacramento housing market. The government's move, announced Tuesday, brought mortgage rates down nearly a full percentage point. It brought some new buyers out of the woodwork..."Where Friday is going to be black Friday for retail people, it'll be a day for people to start looking for houses," said Alan Wagner of Re/Max Gold, president of the Sacramento Association of Realtors. "We're seeing hits on the Internet sites going up."From the SF Chronicle:
Jon Haveman, with Beacon Economics in San Rafael, said the variations [in unemployment rates] have to do with housing. The regions with the biggest price inflation are suffering the worst due to a falloff in construction and the psychological impact that foreclosures and falling home prices have on consumer spending. "This all began with the housing bubble, and it was in places like the Central Valley, the Inland Empire and the East Bay where prices got most out of whack," he said.From Kiplinger (via Yahoo) (hat tip Jeff):
The market hit hardest by the housing bubble is the Central Valley in California, where aggressive development and price hiking has yielded more homes than jobs. Now many homeowners owe more than their house is worth and are being forced into default.From Housing Wire:
Still, it's not all doom and gloom for the California housing market. The drop in home values has created an affordable market for first-time home buyers. And, on average, monthly sales have almost tripled from last year. Although the Valley has seen the worst of the crash, it may well be one of the first areas to recover.
In the Merced, California area...average home prices have declined 43 percent over the past 12 months, and are projected to fall another 22 percent by the middle of 2009,...data provider [Fiserv] said.From the Sacramento Bee:
In December, REDC will put up for auction 1,288 Northern California homes during a five-day marathon. Leonard Green, a Sacramento real estate broker who works the multiday events, said most bidders are investors, and "a lot of them follow us from town to town."
...
"What these really are are bank marketing events," said Sean O'Toole, owner of ForeclosureRadar, a foreclosure tracking firm in Contra Costa County. "The idea is to create excitement and hype around these properties to deliver a better price to the bank than they would get with a traditional sale through a Realtor."
4 comments:
DR Horton reported that last quarter their cancelation rate hit 47%. Loss for Q3 is $800 Million with another $1 Billion is charges. Wow, where are you bulls?? I guess you're hibernating this winter lol.
Sales will go up sure, but prices have not found a bottom.
Almost 50% cancelation, and those all got counted as sales when the sale was made no doubt...
Plus most sales are still going to speculators. No capitulation yet.
And even if Sac was forming a bottom you have a lot of job losses that will come in the next year and that will cause prices to fall further.
I agree job losses are key.
The previous RE downturn was driven by job losses confined to industries such as Defense, Aerospace, etc. A pretty simple supply/demand issue. Restore the jobs in those industries and over time the problem gets solved.
This time Real Estate is the driver for job losses across a wide spectrum of industries that took advantage of the "low interest rate" environment. It is the catalyst that lit the rest of the world on fire, due to all the over leveraged excesses that followed its rise.
Yet what are we doing to combat the problem? Ironically, we're lowering interest rates, once again, to stimulate people to buy things they cannot afford and do not need. But fewer and fewer are taking that bait. For the first time, in a very long time, people are shifting away from consumption based on want to consumption based on need. The uncertainties are driving a new sense of frugality and savings among those that are unclear about the road ahead.
Imo, state government(and Sacramento)grew to meet the excess of want. Now they'll have to deal with a population that's not willing to spend their way into foreclosure...Downsizing is the only way to get a handle on $29.2B deficit..and the most effective way to downsize is to cut wages out of the budget.
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