Paquin Predicts Sales Bottom for 2009

From the Stockton Record:

Question: It's been the slowest year yet for home builders. When do you anticipate that the market will hit bottom?

Answer [Gregory Paquin, president, Gregory Group]: It is our expectation that the Central Valley will hit bottom during 2009 and begin to see the signs of recovery in 2010 and 2011, although some areas - Sacramento and some northern Central Valley communities - may experience the recovery sooner than others (some mid- and southern Central Valley communities). Several things will need to happen before the housing recovery can begin: a slowing of foreclosure activity, less fear about job losses, the stabilizing of the overall economy and the easing of credit markets - a swing of the pendulum back to the center.

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Paquin Predicts Sales Bottom for 2008
"I'm optimistic we will [reach bottom] in 2007"

Speaking of predictions, Sacramento Bee housing reporter Jim Wasserman invites readers to submit questions to an upcoming Sacramento real estate roundtable, which apparently includes blogger Average Buyer. Kudos to the Bee for making room for an informed consumer's perspective. Knock 'em dead AB! (no pressure or anything)

From the Sacramento Bee:

California's financial troubles have prompted Gov. Arnold Schwarzenegger to start talking about state layoffs...At a Los Angeles event last week, Schwarzenegger said the state has to look at all areas of government to close the $11.2 billion funding gap this fiscal year. "I think the longer we wait the more we will have to lay off people from government," he said in response to a question about the state's financial health. "And I think because of the delay now, we are almost, I think, forced – as a matter of fact, we are going to have a meeting … about that, how many people we need now to lay off in order to make ends meet."
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About 112,000 state workers are employed in the Sacramento region, roughly 10 percent of the work force.

From the Sacramento Bee:

Sacramento, already weakened by one of the nation's highest foreclosure rates, is especially vulnerable. The stumbling state economy has prodded Schwarzenegger to propose that state employees take off one day per month without pay. "What I'm seeing now are state workers who are panicked … who are living paycheck to paycheck and are saying, 'Once I'm forced to take one day off a month I can't make my mortgage payment,' " said Jonathan Stein, an Elk Grove bankruptcy attorney.

From News10:

Sacramento Salvation Army homeless shelter supervisor David Benning...believes they've never had a higher percentage of first-time homeless in the shelter than they do now. The bad economy is likely to blame, as more people face the same crippling hardships. "Foreclosure, generally," says Benning, talking about the reasons people give when looking for shelter. "They lost their job, unemployment benefits have run out."

From the Sacramento Bee:

[B]orrowers rolled up the center's escalators for a massive foreclosure prevention workshop organized by Hope Now...The larger-than-expected crowd at the convention center spoke to the magnitude of problems in the region..."At 7 p.m. we had 1,200 borrowers registered," said Hope Now spokeswoman Katherine McGann. "They're still coming."

From CNBC:

The top U.S. banking regulators said Monday that some of their foreclosure prevention efforts are floundering and that they have no agreed plan for the future, two years into a housing crisis that has dragged the economy into a deep recession. More than half of troubled borrowers face losing their homes even six months after lenders have eased their monthly payments, one regulator said, a discouraging sign for reversing a tide of foreclosures.
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[I]nstead of spending so much time focusing on trying to modify these loans, perhaps we need to look at the problem from a different perspective. How do we transition these borrowers out of homes they can't afford, with as little pain as possible, and in turn give qualified borrowers the incentive to buy up the inventory? Unless the lenders or investors or government officials are willing to simply throw the loan out and give away an awful lot of house to an awful lot of borrowers, modifications, and certainly "mass modifications" which a lot of government types are pushing, are just exacerbating the problem.

From the CVBT:

U.S. Rep. Dennis Cardoza, D-Merced...says the Treasury Department should immediately look into expanding the [4.5 percent fixed rate] program to all American homeowners...Homeowners who have been responsible and paid their mortgages every month should receive the benefit of a lowered mortgage, as well as those who need assistance meeting the demands of their mortgages, he says. "By lowering the monthly payments, we will essentially be giving each homeowner a stimulus check by putting more money in their pocket and without placing a burden on the Treasury or the taxpayer,” says Mr. Cardoza.

From the Stockton Record:

[N]ew numbers from Irvine-based RealtyTrac, which tracks the foreclosure market, indicate that the number of single-family homes actually repossessed by banks and mortgage companies is growing at a faster pace in San Joaquin County. In the first six months of this year, a total of 5,643 houses were repossessed countywide, RealtyTrac said. Compare that with 10,478 from January through October. That means the monthly average of repossessed homes is up from about 940 per month in the first six months of the year to more than 1,200 per month so far in the second half of the year - a nearly 28 percent jump.

From the Sacramento Business Journal:

Kobra Properties won’t bother to save 16 of its most troubled assets as it starts bankruptcy proceedings, the founder and president said in documents filed in the case. The plan to abandon 238 acres — mostly unfinished office, retail and restaurant projects — of its 900-acre real estate portfolio is part of Kobra’s strategy to emerge from bankruptcy as a more viable property developer...The abandoned assets will likely be repossessed by lenders and eventually offered for sale, and could be purchased at a steep discount by investors hoping to profit from one of the worst real estate reversals in decades.
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“I have determined that certain real property assets of the debtors’ bankruptcy estates are unnecessary for the debtors’ reorganization and have no value to their respective estates,” company founder and president Abe Alizadeh said in court papers. “These assets are burdensome, of inconsequential value and have no equity or value.”

From the Manteca Bulletin:

More than 80 percent of the record 1,044 existing homes in Manteca that have closed escrow so far this year are foreclosures. That means owner-occupants and investors alike lost their homes because they couldn't make the payments. And for the most part it wasn't due to job loss or a catastrophic event such as a major illness. They simply borrowed more than they could afford and did it so with low introduction periods where interest - as well as sometimes part of the principal - was deferred for two to three years. They were betting prices would continue to increase and being able to refinance. The foreclosures are bad news for those who got caught in what is looking more and more like a Ponzi scheme where the last ones in on the housing bubble that expanded beyond reality by liar loans.