Friday, October 01, 2010

Sacramento Real Estate Market - October 2010

Post off-topic links, observations, and stories about the Sacramento real estate market. Please read the comment policy before posting.


husmanen said...

As many of you know the rental parity metric is near and dear to me. So I thought I would share Dr Housing Bubble's latest on renting in CA.


husmanen said...

Wow. 2009 Annual per-capita income for the Sacto four county region is $27.6k.

White $33.6k.
Latino $16k.
African-American $18.7.
Asian $24.6.

Even with dual incomes and NO kids this would put pressure on current prices.

b1whois said...

husmanen, thanks for posting this, you are always a wealth of info....

Roy said...

Hi Husmanen, is that $27.6k per-capida income number for all the people who are working? thx.

husmanen said...

Roy. Good question.

Poking around at some of the links I found this definition:

"Per capita income (PCI) is defined as the average amount of money received by a residents of a given a area in a given year, encompassing such diverse sources of income as salaries, interest payments, dividends, rental income and government checks."


Interesting that 'all types' of income sources are included, e.g. government checks.

Roy said...

Well, if $27.6k is per person, then an average family with 4 people would have $10k+ imcome which is not possible.

husmanen said...

Roy. Agreed. When you include all members of a household the numbers can get large.

Since it is not my data, you might want to explore the source and see if you can come up with a more explicit definition. I imagine that there are other excluding factors, e.g. children etc.

Looking forward to what you may find.

husmanen said...

I put this on Average Buyer too, but thought I would share here as well...

Although the data is on a macro scale it has some relevance to our area:

Here's Why House Prices Will Now Drop Another 20% (Gary Shilling)

Wish we could get this type of data for our local area.

Easiest way to read the article due to the large number of graphs is to click on 'view as one page' on the bottom right.

Roy said...

husmanen said...

Roy. Thanks for sharing.

Looks like the Sacto area is doing well in the health care coverage area but not so well in the percent of home-owners with >30% of income going to a housing payment (Sacto is nearly 50% have >30% of income going to a housing payment).

I believe the article refers to gross income but not sure, it didn't say.

Here is a nice graph from the original source (WSJ):

husmanen said...

What does everyone think about the current news about the foreclosure robosigners?

Although CA is not in the same mess because we have a ‘tender rule’, which I was just recently made aware of, I was thinking about my current rental in foreclosure.

Even if the robosigners completely abused the foreclosure filing rules I don’t think it matters much in my case, since:

* My landlord still has not paid in probably over 2 years (recouped a good portion of the 20% down payment)

* Current market value of the house is 25% less than the loan amount

* The house is still overvalued by at least 15% according to rental parity

So does the halting of Ally (GMAC), and others only give false hope to those in the foreclosure loop and continue to postpone your general market recovery?

husmanen said...

Interesting article by Market Wire regarding the Rent vs. Buy Index for to 10 Cities in the US.

Sacramento comes in number five (5) on the scale of renting is better than buying with a price to rent ratio of 23. Here is their key: Rent vs. Buy Index - Interpretation Key
Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city.
Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city. The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation.
Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.

Trulia's Rent vs. Buy Index Reveals Top 10 Cities for Renting, Owning Homes

Top 10 Cities to Rent vs. Buy
Rank City State Price: rent ratio
1.New York NY 35
2.Seattle WA 31
3.Fort Worth TX 30
4.Omaha NE 25
5.SacramentoCA 23
6.Kansas CityMO 23
7.Portland OR 22
8.San DiegoCA 21
9.San Fran CA 21
10.Boston MA 20

Top 10 Cities to Buy vs. Rent
Rank City State Price: rent ratio
1.Arlington TX 7
2.Fresno CA 8
3.Miami FL 9
4.Mesa AZ 9
5.Phoenix AZ 10
6.Jcksnvlle FL 11
7.Detroit MI 11
8.Columbus OH 12
9.El Paso TX 13
10.NashvilleTN 14

Louie said...

Thanks for the info Hus, always pertinent.

My wife and I have been waiting on a BofA short sale for 3 months now, and we are starting to wonder if the bank has any intention of actually dealing with us. They did their BPO about 3 weeks ago, shouldn't we have heard by now? The listing agent appears to be incompetent, as there are multiple mistakes in the listing, and I don't have a lot of confidence that anything will get done before the foreclosure date. Although I guess a foreclosure won't be happening now. Well, in the end I'll probably be thankful it took as long as it did...

No_Rush said...


We are buyers too and we just received our short sale approval letter from BAC on friday 10/8. Our initial offer went in 7/30.

When I first told my story on 9/2 I was really ticked off because BAc had just countered $50k more than our offer (which I was sure was a fair offer). When my anger wore off I decided to do some work to make the deal happen. I got a bunch of bids for repairs needed (free of course) and I paid $450 to get a full blown appraisal. I sent both pieces of info to my agent and she sent it to the listing agent for upload on to equator. After 1.5 weeks we got an acceptance through equator (meaning they just repeated my last set of numbers in their final counter offer column). I'm assuming you've already seen this spreadsheet output from the equator system. Then 1.5 weeks later they sent the approval letter. The way I see it, you can't assume the bank will budge without facts. If you and the bank are at a stalemate on price, send them something legit that shows your offer is fair. That seemed to do the trick for us. We ended up getting a 2006 era EDH house in the promontory for $118/sf. I'm pleased.

Louie said...


Thank you so much for sharing your experience. There's such a lack of first-hand knowledge out there, so hearing the details of your BofA short sale was like being trapped in a well and seeing a flashlight :) And it looks like you got a really nice deal, congratulations.

We submitted our offer on 7/8, well before you, so I'm mystified why we haven't gotten a response. Its possible the listing agent didn't actually submit the offer to BofA for a few weeks, maybe that's it.

But when we do receive it, I'll be sending in a detailed list of repairs and inaccuracies, as you did. I haven't seen the Equator spreadsheet, I just searched for it online but couldn't find anything. Can you pass anything along on that, like a useful link?

Thanks again, any advice you could offer is great. Do you think you could give me the MLS number of the home you bought? I'm thinking about going into the listing agent's office, and it would be helpful if I had a concrete example with dates to show them that this is taking longer than it should. If you're not comfortable with that I completely understand. Thanks again, enjoy your new home!

husmanen said...

No_Rush. Thanks for sharing, first hand information is highly valuable and helps the rest of us become better armed for more efficient and effective negotiations. $118 sq/foot is awesome! Your perseverance paid off. ENJOY!!

I too was not familiar with Equator and poked around a little on the Internet and found out it used to be REOTrans.

Here is a little blog about the Equator evaluation tool that is used by banks to evaluate offers and make the sale of REOs and SSs smoother.

You can sign up for Equator and look at the REO homes in your area:

husmanen said...

Here is a training presentation from BofA regarding short sales and using the Equator system, from the point of view of an agent.

b1whois said...

i registered with and tried to get details by selecting "view". it just routed me to the welcome page. i sent an email to thier support peeps, so we will see if they answer.....anyone else having this problem?

No_Rush said...


Equator's true inner workings can only be seen by the listing agent and BAC (for a given property). You can only sign up as a buyer to see REO listings.

The link to the agent guide to equator that Husmanen posted is the best thing you'll get.

If you open that pdf you'll see what appears to be a spreadsheet on page 22 of 37. It's a partial view of the offer/counteroffer worksheet. Assuming BAC does not reject your offer, that worksheet is what you'll get back from BAC. What you'll see is your first offer in the first column, BAC's counter in the second column and then you'll write in your numbers in the next column (you need to put in the same numbers to accept BAC's counter or new number to counter their counter). Every line can be countered! Work it the numbers out with your agent and then fax it. The listing agent will enter your numbers back in to equator for another round. But expect BAC to give you three days to do this after they took a month.

From what I have read, it wouldn't surprise me of the time it is taking BAC to respond to you. Our offer was the only one in and I knew it went in on 7/30. Try to get a clear answer from the LA.

I had offered to do a conference call with me, my agent and the LA but was turned down. I figured we would work against the bank as a team but the LA didn't want to do that. So I'm not sure a visit to your LA will work out. It's worth a try though.

Our deal is MLS #10028550.

Good luck!

Louie said...

No_Rush and Hus,

thanks for that document and explanation. No_Rush, you said "Assuming BAC does not reject your offer", would they flatly reject an offer without countering? It seems like if the listing agent accepts it, they should (and are oblidged by law, I believe) to negotiate in good faith. Would they tell us immediately if they rejected our offer? The price had been cut by about 15% 2 weeks before we submitted our offer, which was another 5% below that. Its possible the bank thought it was too low.

I think I will take your advice and try to pin down the date that the LA actually submitted the offer on Equator, hopefully this person knows how to take a screen shot at least. Again, I don't have a lot of confidence in the listing agent, how can I find out if they are doing their job, or is there a way to go over their head at the bank level? Thanks again, this is why I love this site.

No_Rush said...


Unless you know the bank was involved in setting the listing price, which is highly unlikely, the listing agent was the only one involved in setting and adjusting the asking price to obtain offers. The LA's actually wait certain periods of time between adjustments so the bank will ultimately trust that the agent is acting responsibly in trying to sell the bank's asset. However, the listing price and the price at which the bank is willing to sell are NOT the same. Needless to say the bank usually counters higher. This is what happened to me. That's when I had to do my homework and send in a file of data showing the bank was dreaming.

I've heard that banks sometimes flat out reject offers. I'm not saying this would happen to you, but it's just a possibility you need to plan for.

I sometimes thought the LA for our deal was not doing a good job either, but through dumb luck or efforts she didn't tell us's in escrow. It's just another risk with short sales.

I hope it works out!

husmanen said...

I just learned how to identify the investor and servicer on a home loan.

Just click on:
| Search by Property Address/Borrower Details

|Search by Property Address Only

My rental has been kicked around three times in the last three years. Orginally Fannie Mae, then an unknown and now Deutsche Bank.

This could be good for anyone wanting to get a handle on the players for a short sale purchase, strategic default etc.


husmanen said...

Saw this on the Daily Show a few nights back, but just got the link:

Mortgage Bankers Association Strategic Default


Gman said...

Did anyone else see the Sac Bee article today on new home sales. Only 288 new homes sold for the entire quarter for the sac metro area. In 2004, new-home sales in the region totaled 17,155. This is beyond brutal and I just dont know where this is going to end.

Read more:

tbfolsom said...

My wife and I have been waiting patiently for MTH (middle to high-end) housing segment to hit/near the bottom. We are interested in the Folsom (American River Canyon) or EDH (Promotory) area. Do you think it’s a good time to buy now or should I wait another year or two? From all the short sales and foreclosures in these areas, I believe the price correction in the MTH segment still has a way to go. Thoughts?

husmanen said...

tbfolsom. The housing market does not turn on a dime and waiting one or two years will probably only benefit you.

One of my key metrics is rental-parity, the areas you are looking rentals range from $1800 to >$3000 per month.

The specific areas you are looking at are definitely moving towards their long term trend line, which is down from current prices.

Aside from the metrics, the two areas you are looking at have vastly different 'cultures'.

One older, more established, little to no Mello Roos or HOAs, lots of trees, good schools and a little hard to get to.

While the other is new, high Mello Roos and HOAs, newly planted trees, great schools and easy to get to.

husmanen said...

Oh, I was assuming ARC NORTH in my rental parity and comparison.

husmanen said...

Home rescue event story. I met someone that went to the event and had quite an experience.

First, they were impressed with the efficiency of the production and how they were able to get so many people through the process.

Then they were impressed by all the stories of how people were able to game the system to remain in their home for extended periods, even after non-payment. I think the record they heard was 48 months (which was whispered from a bank representative on a given tactic).

After jumping through all the hoops and providing their info, they were requested to fax paperwork to a given number. First number was disconnected then the second number stated that it was NOT a fax number ...

So they have not paid in over 6 months, no NOD, lots of paperwork, faulty fax numbers and over ten different contact persons they are still cruising.

I bet their savings account is growing by the day. Indirect market stimulus.

wimpyVO2max said...

Story bubbling up about MERS, the shell company created by the big banks to launder mortgages, is being sued for fraud and could owe California billions:

Barry Ritholtz at Big Picture also has a long item about MERS (60% of all mortgages but zero employees):

husmanen said...

wimpyVO2max. There seems to be many layers to the story. A good conversation and write up can be found on Piggington's site:

Foreclosures May Be Just a Sideshow in Paperwork Scandal


"...This puts into legal question the ownership of the loans in all those mortgage-backed securities.

And importantly, it may open the door for purchasers of mortgage-backed securities -- those would be the folks who lost enormous amounts of money by providing the financing for all the reckless lending that took place earlier in the decade -- to challenge the legality of the securities they purchased and try to recoup some of their losses...."

husmanen said...

Data Quick numbers are out for September 2010.

Looks like the median in EDH has stabilized a little, but I suspect the mixture of homes continues to change as larger more upper end homes are now coming down, thus the price per sq/ft.

Folsom continues to slide in price and sales.

In both cases the number of sales seem pretty low, even for the off season, but I don’t have this data handy to actually compare. Here you go:

……………………Median Price 2010

………………………Median Sales 2010

$157sq/ft in Sep 2010 for EDH
$171sq/ft in Sep 2010 for Folsom

Roy said...

tbfolsom, we are in the same boat. I have being looking around MTH homes in similar location as you for two and half years. I have given 3 offers, but every time I got approved or rejected, I had the feeling that price was getting down. And I was right. So, just have more patient. My feeling is it won't reach the bottem at least until next year this time.

FYI. My friend just got approved by bank on a 4880 sqft house in Serrano area for $485k. This is the new benchmark for that area, less than $100 per sqft. The house market still has a long way to go before tunning back!

husmanen said...

Anyone here with experience receiving an NOD?

Did it come by Fedex or registered mail or?

As a renter I believe ours went to the 'owner' and we received a copy via Fedex.

Any other stories....

husmanen said...

No Rush. I was at a party this last weekend and I was speaking with some friends (a couple), that it turns out are mutual to you and I.

My conversation with ‘M’, the husband, and I discussing my latest home search in their area … Talus Ridge. M said his wife J’s friends just moved into a home and J mentioned a few details, I put 2+2+2+2+2+2+2+2 together and low and behold I believe we have mutual friends.

It truly is a small world.