Moody's Economy.com: Sacramento Real Estate Market to Bottom in Q4 2009
From Home Front:
How many times have we asked this question - where is bottom of this housing market - and seen it pushed farther into the future? One more time today, comes Moody's Economy.com, pushing it out until the fourth quarter of this year for El Dorado, Placer, Sacramento and Yolo counties.From the Modesto Bee:
"To survive, you have to pare back your expenses, cut down advertising, let your employees go and ride it out," [Joseph] Anfuso [of Florsheim Homes] said. During the past two years, he's reduced his staff from 55 to 11...When housing was hot, Riverbank's Monschein Industries employed 406 people to craft cabinetry and countertops. Now only 72 remain.From CBS 13:
...
To stick it out, some builders have drastically slashed prices. When Taylor-Morrison's Carriage Lane project opened the summer of 2007, its 1,127-square-foot model had an advertised base price of $271,990. Now it's just $139,990. That's a nearly 49 percent reduction.
...
[T]he housing slump won't end anytime soon, analysts warn. "The Central Valley is not immune to the slowing national economy and the region's housing market is feeling the effects," said Greg Gross, director of Metrostudy's Central Valley division.
Other job seekers expressed frustration at what they see as a growing divide between the instability of the private sector and relative safety of government employment. "The idea that state employees are somehow exempt from feeling the pain -- I find that somewhat ludicrous," said Pat Young of Corona del Mar, a former vice president of real estate developer Pacer Communities who lost his job in 2007. "They're upset because they're being docked two days a month. I think they look rather foolish against a backdrop of people who have lost their jobs entirely."SacBee: The fastest shrinking job sectors in Sacramento
From News10:
Not bad for a day's work: In a down market, a Sacramento real estate broker made $275,000 buying a bank-owned home in West Sacramento and reselling it the same day. While other real estate professionals were struggling to stay afloat in the worst market in generations, the "flipper" was on a roll. Two months after buying the West Sacramento house, he picked up bank-owned homes in Sacramento and Rio Linda and flipped them both in a matter of weeks for a profit of $358,000.
The secret to his phenomenal success is simple: He's a crook.
21 comments:
Wait... Is the plan for a rebound in the second half of 09 gone aleady?
lol
As for the two forced days off a month, I am not sure how much it really helps. I saw a news segment showing a few businesses in Sac that were basically dead on Friday which is supposedely their busiest day.
So you save $x for having the state workers stay home, but if you add up the income tax you would have gotten back, plus the sales tax when they go buy lunch/dinner, gas tax cause they need to drive, and then the income tax from the businesses that they go to... I wonder how much is actually saved.
I would be fine with cutting the workforce if that would help, but if we fired everyone we would still have a deficit. Until we address the underlying problem of voters being able to mandate spending without paying for it we will be in trouble.
No one wants to buy CA bonds anymore so the game is over.
"Other job seekers expressed frustration at what they see as a growing divide between the instability of the private sector and relative safety of government employment. "The idea that state employees are somehow exempt from feeling the pain -- I find that somewhat ludicrous"
Ok I feel you...And as an auditor for the state, during the real estate boom, more than once, I was told that continuing to work for my state salary was "ludicrous", I continue to have the same low salary, and I did not get any bonuses during the boom, like many of the RE pros did. And now I've taken a 10% pay cut. How sorry should I feel for you?
I would suggest that at least 1/2 of state jobs are nothing more than "make jobs" or welfare for work. I talked to a guy who said he, and the people in his department could do their weeks work in 4 hours on monday. They then bs the rest of the time. Forbes has a great article this month shining light on the pension issues we have in our state. It's a joke, and it has to stop. At some point, there will be a brain drain from CA, and what we'll be left are state workers, and low income manual labor high school grads. We need to get state, county, city etc compensation, including wages, health care, pensions in line with the private sector or less. Since there is no job insecurity, and little if any education/skill is needed.
I don't underestimate the power of the $15K tax credit if it clears both houses. Someone making $70K per year who buys a home for $150,000 or more can effectively pay zero Fed taxes for the year. And if I read it right, it also means you probably can take this credit for the 2008 tax year.
For those who have not filed their taxes for '08, and have purchased a home in '08, you might want to hold off filing until all the details are revealed.
I'd wager this credit will push many fence sitters off and into real estate if it's enacted.
Spare me that prices will go lower as I would tend to agree, but if you're able to potentially put $15,000 in your pocket in the form a tax refund, people are likely to respond.
Isn't the $15,000 tax credit going to be like the existing $7500 tax credit, in that it's really an interest free loan? I'm pretty sure that with the current "credit" you pay it back $500/year for 15 years. It's still free money in that it's interest free, but definitely not as nice as getting a true tax credit.
Bob
From what I read, the $15K credit will supercede the $7500 credit with the proviso that the home must be owner occupied, and you must own the home for at least 2 years. I didn't pick up that there was a repayment schedule.
Now all this could change once the haggling is done between the houses but the Senate version appears to be real gift to recent and prospective homeowners.
One of these programs that's been shotgunned at the American public will have a positive effect on our real estate market...this might be the one if its structured right.
The trick is you have to be able to buy to get the credit in the first place. It also locks out investors as the credit has restriction on it similar to securing a FHA loan (not that I mind this a bit).
In fact, securing FHA backing is still the problem as properties that will pass FHA are overpriced for the most part and anything in the affordability range is distressed or in a demilitarized zone.
As long as FHA is the funnel buyers have to squeeze through, this is a nothingburger like the last credit.
Starting to see some really good listings in Granite Bay that even I can finally afford.
I'm not biting yet, though.
Correction...I don't think this credit applies if you bought in '08. However, if you buy in '09 you can take the credit from your '08 tax returns. This is a first time buyer program and you cannot have owned a home in the last 3 years.
Again, this could all get modified once the two house start haggling.
DJ...I didn't read anywhere about FHA reqs. Where did you find that?
One of these programs that's been shotgunned at the American public will have a positive effect on our real estate market...
I'm not as sure. How is this different than any other subsidy, in that prices would simply adjust by a comparable amount?
MlS #90009959
3 br 2 1/2 Bath in Westlake built in 2002, 1872 sq ft. listed at $155,900.
Looks we're breaching $85 per sq ft.
DD,
I was in a hurry. I shouldn't have said FHA as that has a wide spectrum of limits on funding that don't apply here. We don't know much about it in terms of how strict it will be in total but we do know that it is aimed specifically at owner occupied purchases with FHA-like eligibility conditions.
I do understand their thinking though. A first year credit would act like a mortgage interest deduction before you'd built in a full years credit. However as far as demand goes, a 1 yr credit just front loads some demand but not enough to sizably reduce inventory when you figure in all current funding constraints.
try this link:
http://www.econbrowser.com/archives/2009/02/kash_mansori_on.html
But this also could backfire. What happens if banks tack that 15k credit into their pricing models which further prices out FHA buyers? We recreate late 06 and 07 buying environment where almost nothing moved for 18 months. Slowing down the absorbtion rate would be a nasty side effect.
See what I'm thinking?
I get it DJ...and very possible. The first time homeowner is key to any program. The Feds are juicing demand which is exactly what all this stimulus is about. The credit, if enacted as the Senate version, will effectively allow those buying the lower end to live a year basically mortgage free. Throw their 4.5% targett rates on top of this and it probably gets the uptick they're looking for...think dead cat bounce. As far as the banks hiking prices, the market, being as anemic as it is, will take care of that.
As of yesterday, we learned that the new bailout figures on the table will add another $3 Trillion more on the liability side of the govt balance sheet with no better transparency than the previous $1.5 Trillion that's been handed out.
Does anyone else see the sense of panic watching these lawmakers scramble to come up with ways to delay the inevitable?
What an ever-moving target. Looks like the $15K tax credit passed by the Senate is history...
http://news.yahoo.com/s/ap/20090211/ap_on_bi_ge/congress_stimulus_336
"Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said."
I wonder if the 3 Repubs that moved over, will support the bill now?
Does anyone know where a link is to the bill the Senate just passed? I wonder what 'Effectively' really means in the article.
Crooks in real estate? No way! LOL
A bottom in Q4/09? Maybe, but I doubt it. That's also a long way away, I wonder what the economy and stock market with look like then? I wonder how many million more workers lose their jobs between now and then? I wonder if those jobless folks will really care about a bottom in real estate, and if they will be buying then?
KTM - some good points, but there's others in the private sector who also didn't get pay increases or bonuses during the boom times. And most of us don't have pensions, like state workers do. And ironically, those in the private sector who don't have pensions are forced to fund pensions for those of you in the public sector. What about health benefits in retirement? We won't see that either, but again, we're forced to subsidize the health care premiums of those in the public sector. It's a scam to me all around!
Well this stimulous bill will do little to help home sales after killing that $15K credit. That sucks, it might have actually gotten me off the fence, even if it only helped me to get a tax break I otherwise won't ever see.
The bailout bill also won't save the auto industry: The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.
I think we should go back to allowing deductions for personal interest, like the good ole days.
Housing tax credit now $8000 with 3 year owner occ requirement.
Angelina, I'll predict one thing, we haven't seen the bottom yet.
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