"Could it get any worse for Sacramento's home builders?"
From the Sacramento Bee:
Could it get any worse for Sacramento's home builders? Publicly traded home-building giants and family builders alike endured their harshest year in possibly a generation in 2008, according to statistics being released today by the Folsom-based Gregory Group. Area home builders sold just 4,695 houses last year in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties [down 73% from the 2004 peak]....2006 Sales Forecast: 14,094 (approx.)
During the fourth quarter, average new home prices fell 10 percent from 2007, to $384,347....The capital region's new home average peaked just shy of $500,000 in the second quarter of 2006....
2006 Sales Reality: 9,588
2007 Forecast: 9,500-10,000
2007 Reality: 7,407
2008 Forecast: 7,710
2008 Reality: 4,695
Gregory Group Q4 2008 statistics
From the Sacramento Union:
Ashley Feeney said that as a Sacramento homeowner and one who works in the building industry, he was disappointed to see home prices plummet in 2008. “I’m still working, so basically my situation is okay, but having to wake up every day having the psychological tolls of the newspapers and the media reporting the pain of the nation is a little depressing,” Feeney said.From Christianity Today:
Pastor Johnny Murillo had often empathized with his congregation members at Christian Worship Center in Sacramento, California. But when one member came to his office during the 2006 Christmas season, panicked and desperate to keep his home from foreclosure, it hit too close to home. "Dude, I know what you are going through," Murillo told him. "There is a way out."From the Stockton Record:
He really believed there had to be a way out. The only problem was that at the time, he didn't know what it was. Unbeknownst to anyone else, Murillo was also facing foreclosure.
Rep. Dennis Cardoza, D-Atwater, has a plan to reverse the housing crisis and boost the economy: a 4 percent interest rate on fixed-rate, 30-year loans for all current homeowners and qualified buyers of foreclosure properties. Under his newly proposed legislation, federal mortgage giants Fannie Mae and Freddie Mac would allow homeowners to refinance their mortgages at 4 percent interest on 30-year, fixed-rate loans. That would benefit not only homeowners struggling to make monthly payments but also those who have faithfully paid their bills each month but have been unable to refinance because of lost equity.From the Sacramento Bee:
...
Carol Ornelas, CEO of Visionary Home Builders, which builds housing for low-income families and also provides mortgage counseling, said the plan wouldn't help many people in the Central Valley, though, because they still would have too-high mortgage costs even at such a low interest rate.
California will close most state offices on the first and third Fridays each month starting in February, padlocking DMV outlets and other services while reducing state worker pay to help survive a massive budget problem, according to a state Department of Personnel Administration memo...The state will save an estimated $1.3 billion over 17 months under the furlough plan. The move could have a significant impact on the Sacramento region, where the state employs 73,536 workers in Sacramento County alone, including 63,818 full time.
4 comments:
'member how all the state workers were going to keep Sacto unemployment from rising??
Unemployment is rising, some cutbacks are taking place (like the forced unpaid days off for state workers), but we still have a budget problem.
Until the budget problems are either resolved, or some real progress is made, I don't see why any state worker would finance anything (house, car, tv, anything) knowing that there are more cutbacks or layoffs coming.
Can it get any worse for home builders? I say it can and likely will. As long as job losses continue there will be more and more $$ taken out of the economy which will have effects on other companies and other employees and just continue to feed on it self.
And the end result is less people want to buy a home, less people can afford to buy a home, and most importantly, less people will get a loan to buy a home.
Less demand equals fewer sales and lower prices and more cutbacks and more job losses... Rinse, Repeat.
Reality bites.
That would benefit not only homeowners struggling to make monthly payments but also those who have faithfully paid their bills each month
Correction - Cardoza's plan will benefit homeowners who have paid their bills each month. Renters get to pay for the cost of the plan without receiving any of its benefits.
This is government intervention at its worst.
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