Half-Filled Developments - "Advertisement for a Failing Housing Market"

From KCRA:

A new Centex Homes development in Rancho Cordova is in limbo because of a dreary housing market, the developer confirmed Thursday. The 13 homes currently under construction in the Cypress at Kavala Ranch development will be finished, but none of the other lots will be developed for now.

From Bloomberg:

When Quinn Cuthbertson looks around his new neighborhood in El Dorado Hills, California, he sees rows of empty homes and barren hillsides. A promised new school and a clubhouse haven't materialized. Cuthbertson paid $460,000 for a four-bedroom house in this northern California town named for the mythical golden city. He now suspects his neighbor spent $45,000 less. Nearby, 87 of 98 Toll Brothers Inc. home sites are undeveloped.
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"Half-filled developments are an advertisement for a failing housing market," said Retsinas, a former assistant secretary for housing at the U.S. Department of Housing and Urban Development. "It also has a spillover effect on the surrounding community."
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Brent Sease, who bought a five-bedroom home built by Miami-based Lennar in El Dorado Hills, said a park and school that were supposed to be constructed are at least two years from being completed. Across the street, red tags that say "Available" are pasted on two houses. "That's the thing I'm concerned about," said Sease, a software manager with three daughters. "It's going to be a while before they put all that in, because they're not selling homes."

From Folsom Telegraph:

Quick, where’s the foreclosure rate higher – upper-middle class Folsom or low-upper class El Dorado Hills?

It’s higher in suave El Dorado Hills, significantly higher – by 50 percent...That might reflect the fact that EDH housing prices tend to outstrip income more than they do in Folsom, according to Money Magazine. El Dorado Hills’s median income of $116,406 amounts to 17 percent of the median home price of $672,335. Folsom’s $94,180 median income accounts for 19 percent of the city’s $490,000 median home price.

From KCRA:

Placer County SPCS animal shelter leader Leilani Vierra said she has 20 animals in her shelter as a result of people suffering from foreclosures, and the numbers are growing...Now we are seeing an animal a day at our shelter, if not more, as a result of people losing their home," Vierra said.

Wells Fargo labels Sacramento area counties as "severely distressed markets" (via Blown Mortgage).

From the Wall Street Journal:

Sgt. First Class Nicklaus Skaggs is among those looking to walk away. Mr. Skaggs bought his home in April 2005 shortly after returning to California from a one-year tour of duty in Baghdad. The $455,000 three-bedroom home he and his wife purchased in Vacaville, about one hour northeast of San Francisco, is worth an estimated $285,000 today, well below the $453,000 he owes on his mortgage. The monthly mortgage payment, which jumped after its interest rate increased, is now $4,000, up from $2,980 when he bought the house.

Mr. Skaggs expects to be redeployed to Iraq again later this year. But he can't sell his home, since there are few buyers, and he can't refinance because lenders require a large down payment he doesn't have. Now, the 18-year Army veteran has decided to walk away from his mortgage. He hopes in a few years lenders see his decision as a unique situation created by the housing meltdown. "I don't think that house is going to recover in value any time soon," said the 40-year-old. "I'd just be throwing the money away."

A rise in the number of people choosing to default on their mortgages would represent a significant departure from past behavior of American homeowners, who during past housing downturns tended to walk away only as a last resort....What's different now, analysts and economists say, is that home prices have fallen so far so quickly that some homeowners in weak markets are concluding that house prices won't recover anytime soon, and therefore they are throwing good money after bad.

From KCRA:

Doug Heisch works for the Baldwin Company in Sacramento, an auto repossession agency...Heisch said the last four months have been quite a bit busier than normal. Owner Mike Baldwin's seen a 15 to 20 percent increase in repossessions this past year. Baldwin said it's obviously the downturn in the housing market, construction trade, real estate, loans, mortgages that they are seeing borrowers and consumers falling victim to repossessions.

From the Sacramento Business Journal:

Budget problems mean the city of Sacramento is "facing elimination of approximately 500 positions" in the coming year, according to a report to the City Council released Friday, or nearly one out of every 10 city jobs.

From the Sacramento Bee:

Sacramento unemployment rose to its highest level in more than a decade...Sacramento-area unemployment rose a half-point to 6.4 percent, the state's Employment Development Department reported Friday.

Stockton Median Home Price Down 31%; Anderson Caves to Rebate Demands

From the Stockton Record (hat tip spacebar):

According to TrendGraphix, the median selling price in San Joaquin County slipped from $325,000 in September to $319,000 last month. That was down almost 25 percent from a high of $425,000 in July 2006. Stockton's median selling price slid from $279,000 in September to $264,000 in October. That was down almost 31.4 percent from a high of $385,000 in January 2006.
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Broker Bob Riggs of Riggs & Associates GMAC Real Estate said most of those looking and buying are investors and speculators looking for great deals...A traditional sale to a family moving into a house remains a rarity, he said.
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Dave Thurman of Dave Thurman Real Estate in Stockton said the market still hasn't stabilized, because buyers feel they can buy only below market value...Thurman also bemoaned the ongoing negative news about the county's real estate market, which he said kills momentum. There is the positive news, he said, in that it's a great time for a first-time buyer to buy a home with prices between $100,000 and $150,000 less than two years ago.

From the Tri-Valley Herald:

On Oct. 22, Paseo West homeowner Dave Cantrell, a spokesman for the current homeowners, met with Anderson Homes owner Larry Anderson and chief financial officer Craig Barton. As a result of that meeting, the homeowners were offered a rebate, which they agreed to take. They also signed a confidentially agreement that precludes them from discussing the settlement. I'm not going to retire on it, Cantrell said of the payment. But what the heck — it helped take a little of the sting out if it.
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Anderson initially refused the homeowners request for a rebate prior to the auction. In a letter to Cantrell he wrote, In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased. After the auction, that sentiment apparently changed. Cantrell said he thought Anderson went into the auction expecting to get 90 percent of their asking price and that the price difference was not going to be as bad. But at the Oct. 13 auction, homes sold for about 70 percent of the original asking prices. After they saw that difference, they wanted to save face, Cantrell said. They took a big hit, but not as big as us.

From the Vacaville Reporter:

Plans for an auction of homes Sunday in Vacaville has perturbed several residents of a local upscale housing development, who are concerned about the potential effect on their property values. With help from Accelerated Marketing Partners, Pleasant Hill-based developer DeNova Homes is auctioning 18 of the houses in its Meadow Woods subdivision.
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"We expect anywhere between a $200,000 to a $300,000 decrease in our property values overnight," said Meadow Woods resident Brian McLean...[T]he minimum selling prices in the auction range from $450,000 to $650,000 and the previous pricing on these homes ranged from $718,000 to $939,900.
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"Anderson ended up going back to the existing homeowners and providing a good-faith rebate in that situation," McLean said, adding, "We're asking (DeNova) to step up to the plate and live up to the slogans." In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction. The response from Sanson was brief. "I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter," he wrote.

From the Stockton Record (hat tip spacebar):

The San Joaquin County Sheriff's Office on Tuesday arrested five people and was searching for two others in the theft of appliances from vacant homes. The arrests were aided by Global Positioning System devices that the home builder KB Home had begun installing in appliances after a rash of similar thefts, the Sheriff's Office reported.

From the Associated Press:

Wachovia Corp. on Wednesday defended its $24 billion purchase last year of one of the country's largest mortgage lenders [Golden West], saying it "didn't anticipate" a housing-market slump that has led to delinquencies, defaults and bankruptcies at mortgage lenders nationwide. But general bank president Ben Jenkins added that "no one else did" either.
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Last week, the bank said in a filing with the Securities and Exchange Commission that "the expected credit deterioration will likely be focused in certain geographic areas that have recently experienced dramatic declines in housing values." At that time, Wachovia's Chief Risk Officer Don Truslow said two areas of concern were in certain markets in California and Florida. Jenkins on Wednesday said the markets in California affected are the state's Central Valley and Inland Empire.