Wednesday, January 28, 2009

High-End Immunity? Not So Much.

From the Sacramento Bee:

Even as new legislation, moratoriums and alternatives such as short sales and loan modifications have slowed foreclosures, another wave could begin this year, many warn, as new categories of risky housing boom loans reset in higher-end neighborhoods. "The last 60 days it's really become palpable. More El Dorado Hills and Sierra Oaks agents are seeing more people request homes for sale with short sales," said Mike Lyon, head of Sacramento-based Lyon Real Estate.
...
Lyon said he recently told the Placer County Association of Realtors it will take another four years to work through the region's housing slump. Partly, he said, that's due to projected waves of resetting Alt-A loans...and so-called pick-a-payment loans, also known as option ARMS...."I think it really gets back to those Alt-A's," he said, explaining rising stresses in capital-area neighborhoods that have considered themselves immune from the housing crisis.
From the Stockton Record:
The [state] law mostly just delayed defaults, said Jerry Abbott, president and co-owner of Grupe Real Estate in Stockton. "It's a pause in the storm," he said. "It's going to be more of the same in 2009."

While most previous foreclosure problems arose from adjustable-rate mortgage resets, he said, a new layer of foreclosure woes is arising from homeowners who have lost work because of the recession.
From the Sacramento Bee:
Strategic Investment Partners...scooped up 187 home lots and 35 unfinished homes, buying half of a repossessed Elk Grove subdivision named Monterey Village. The announcement this week...is a new sign of money looking beyond the capital region's housing bust to better days.
From the Stockton Record:
...[D]emand for apartments in San Joaquin County has been getting softer in the recession....[According to RealFacts] average apartment rents in the county slipped by 0.6 percent....

Randy Thomas, a Sperry Van Ness commercial real estate broker in Stockton who specializes in the Northern California apartments market, said the apartment rental market is getting softer because of the increasing number of "shadow" properties - rental houses - out there.
...
[A]n increase in the number of foreclosure properties converted to rentals has slowed demand for apartments [Norbert Huston, a Stockton real estate broker] said. "It's very hard for us right now to raise rents when the market has softened," he said.
...
While the decline in rents and occupancy is good news for renters, it's less welcome news to those who have invested in rentals as income properties....
From News10:
[Sanjay] Varshney [dean of the College of Business Administration at Sacramento State University] said the severity of the recession has been unexpected with the "complete collapse of the financial system" occurring in less than two months.
...
He said at the core of the collapse is an astonishing level of dishonesty, from financial institutions and the real estate industry, to homeowners taking out loans they knew they couldn't afford.

11 comments:

sacramentia said...

"scooped up 187 home lots and 35 unfinished homes," This seems crazy to me. I'd like to see a viable business model that *adds* housing units. Finishing off the first 35 maybe, but then what?

Jacob said...

Sit on the land long term and use it way down the road?

He said at the core of the collapse is an astonishing level of dishonesty, from financial institutions and the real estate industry, to homeowners taking out loans they knew they couldn't afford.


OMG No Way!!!

sacramentia said...

I've always played honest, so the dishonesty was astonishing to me, and I've lost a fair share for not knowing about it sooner. Bastards.

Deflationary Jane said...

http://www.sacbee.com/ourregion/story/1578506.html

Loretto High School to close

"We had no choice. We just didn't have enough students," said Sister Helen Timothy, school president. "This is a decision that we've been thinking about as a reality for the past 24 months."

patient renter said...

That admission by Mike Lyon is pretty damning, coming from an industry guy. All of the other local industry folk are looking for recovery late this year or next.

Jacob said...

Well like previous busts I expect we won't see a bottom in housing until unemployment peaks. When we start adding jobs again then the bottom may occur within a year.

But we are still losing jobs at an alarming rate...

Cow_tipping said...

Whaaaaa I thought under 200K the market was great for rentals. No ... really ... rentals that sell for 200K and can be rented out for 2000 a month - really, that is the only ones that make sense.
I thought rental demand was going to be through the roof as all the foreclosure residents now scramble for rentals. No, hah isn't that really odd ?
Cool.
Cow_tipping.

lexi said...

Arnold just got the judge to approve state furloughs twice a month. Now comes the next wave
of defaults on cars, homes and credit cards. How does that help
the state?

sold2soon said...

Just watched an ad for REDC, they have another home auction coming up. Has anyone had any experience with home auctions or heard any feedback? I heard that they don't give full disclosure and even if you win a bid, the bank still has to approve it, but that was long ago. I am wondering if their treatment of buyers has improved as desperation has set in?

Cow_tipping said...

Foreclosures auctions are a scam. They make most of the $ from processing fees and nothing ever gets really sold. Much like the realty trac's membership fees for looking at foreclosures. These are things only Casey Serin and his ilk fall for.
Cool.
Cow_tipping.

Lander said...

That admission by Mike Lyon is pretty damning, coming from an industry guy.

Yes, it's especially significant since over the last 2-3 years his press releases have often described the so-called "core" areas as holding up.