Sacramento Unemployment Hits 8.7%; Rental Occupancy Drops

From the Sacramento Bee:

Greater Sacramento unemployment jumped to 8.7 percent, up from 8.1 percent a month earlier...The region has now lost 22,400 jobs in the past year, or 2.4 percent of its employment base.

From the Sacramento Business Journal:

The highest local jobless rate was in Yolo County, at 9.8 percent. The county has a labor force of 99,900 with 9,800 unemployed last month. The county had a 9 percent unemployment rate in November.

From the Sacramento Bee:

Unaccounted for [in the employment numbers is]...the growing numbers of workers who have had to settle for less of a job than they wanted. "The pain in the economy is much greater than the jobless numbers would indicate," said economist Sung Won Sohn of California State University, Channel Islands...Jenny Beard, owner of the Express Employment Professionals office in Roseville, said the number of former full-time workers seeking part-time work is undeniably up. "I'm positive of that," she said. "We're seeing many candidates who just want to keep themselves employed."

From the Sacramento Bee:

Sacramento-area rental occupancy dropped nearly a percentage point – 0.7 percent – in the fourth quarter of 2008 compared with the year-previous quarter, according to a survey released Wednesday by Novato-based rental industry analyst RealFacts...About 93 percent of area rental properties were occupied, one of the lowest occupancy rates in the state....
...
One local analyst cited a "cacophony" of factors contributing to the drop, from overbuilding, to single-family homes turning to rentals in a disastrous housing market, to a struggling economy.

From Home Front:

Here at The Bee, we do a ton of stories on the housing market, but don't often enough explore the world of apartments that house an estimated 35 percent of the region's population...The bottom line right now: the apartment industry is slumping, too. Sales prices are falling, a few have fallen into foreclosure and buyers are waiting on the sidelines to see if prices fall more, the two said. There's still more supply than demand, which has lessened investor interest, too, in apartments.

From the Placer Herald:

Placer County’s foreclosure rate continued to gain steam in 2008, according to a year-end analysis of government records. And experts say to expect more of the same in 2009. The number of foreclosures in the just-ended period was up more than 110 percent from a year ago, with 2,552 residential properties being taken over, compared to 1,193.
...
Homes in all segments of the market – from “starter” homes to area mansions – showed up on county default rolls last year en masse, experts say. “It’s pretty much going after all of them,” said Ben Herb, president of the Placer County Association of Realtors. “Even the houses that are a million-plus have been going into foreclosure.”

From CBS13:

Loan consultant, Robert Turrietta, say that one particular foreclosed home in Sacramento's Oak Park neighborhood lost almost 75 percent of its value. "This particular home transferred a couple of years ago for around $200,000 and just recently sold and closed escrow for $39,000," Turrietta explains. Turrietta says while home prices fall, nearly half of the buyers applying for a loan are getting denied.

Related Post: Housing Bubble Casualties: Professionals 'Suckered' into Oak Park

From the Sacramento Bee:

Most of Sacramento's local banks bet small on the real-estate boom and, as a rule, they haven't been badly hurt by the bust. But according to federal filings, most local lenders have a larger stake in the commercial real estate market, where vacancies – and loan defaults – are expected to soar this year as more businesses fold.
...
[Colliers International's Garrick] Brown anticipates 5 percent to 6 percent of the region's commercial real estate properties will go into foreclosure in the next two years. That's similar to the rate of home foreclosures locally in 2007-8, according to data from foreclosures.com.

Merced breaks the -50% YoY mark. From the Modesto Bee:

Stanislaus County's median sale price was $157,500 in December,...44 percent below the $281,250 in December 2007 and 60 percent off the $396,000 in December 2005, when the bubble was at its biggest...[YoY price declines:] 51.8 percent in Merced [and] 47.5 percent in San Joaquin.
...
Richard Green, director of the University of Southern California's Lusk Center for Real Estate, said the market is being hammered by tight credit, expectations of further price declines and job losses. "If you see the unemployment rate turn around, that's when you'll start to see housing prices bottom and start turning in the other direction," Green said. "Until that happens, I'm pretty gloomy."

From the Sacramento Bee:

Sacramento County is about to announce a mid-year budget shortfall of $42.3 million....As a result the county at the Feb. 10 Board of supervisors meeting will propose getting rid of almost 200 positions on top of almost $30 million in cuts, according to an official, not authorized to speak on the budget, who had been briefed on the situation.

From CBS13:

With a skyrocketing foreclosure rate and plummeting sales taxes, Stockton has to cut $30 million from their $180 million general fund...[O]fficials say layoffs are inevitable.

From CBS13:

The recession is leaving some doctor's offices empty. More women are putting motherhood on hold and recent reports show contraceptive sales are through the roof. The data runs about two years behind, we won't know for sure until 2011, but it appears that with the economic slowdown has come something of a pregnant pause.

'Fore!'closure

From CBS13:

The sounds of 'fore' on a local golf course may soon be silenced due to a foreclosure of sorts. Like many homeowners facing foreclosure, the owners of Wild Wings Golf Course near Woodland say they can't pay their bills and plan to walk away from the property. The closure would mean homeowners who bought homes with a golf course view may soon be seeing brown instead of lush green fairways.
...
With a backyard view of course the D'Amico family is wondering what will happen to there property value. When the development started in 2005, homes were going for $750,000 plus. Now, residents fear Wild Wings will turn into weeds.

From News10:

Brandenburg Development of San Jose is behind in it's property tax payments and water bills and says the golf course loses money every month. "Brandenburg has offered the property to the County for a one-dollar donation," says homeowner Stephanie Young-Birkle.
...
But Yolo County is balking so far. The County faces a continuing budget deficit and has been laying off workers.

From the Sacramento Bee:

A financial dispute involving one of Sacramento's signature condo complexes apparently is turning nasty. As we hear it, officials with project investor Resmark Equity Partners LLC of Los Angeles entered the L Street Lofts building early Friday with the intention of changing locks and assuming control. Representatives of developer Sotiris Kolokotronis then arrived at 1818 L St. and tensions escalated, resulting in police being summoned.
...
What's behind the financial dispute between Resmark and Kolokotronis? It could be Resmark's concern that fewer than half of the 92 units – priced between $389,000 and $1.2 million – have been sold since L Street Lofts opened last year.

From Hovnanian earnings call via Seeking Alpha:

Ivy Zelman – Zelman & Associates

Ara, you point out some positives that referring to markets, Northern Cal and Augusta and Stockton and other areas where the market’s seen an improvement in existing home sales, you know ironically the increase in existing home sales is coming from foreclosures and dominating markets as much as 50% to as high as 75% of those existing home sale increases, and we know that through title companies and work we’ve done that half of those and maybe even more, many are being purchased by investors.

The good news is that it’s moving inventory. The bad news is that there’s for every house that’s taken off, there’s more in the pipeline to come. The other bad news is it’s taking share from your new home market and your prices, although in many cases you may not be making money now, are likely to go lower because appraisals are coming in lower because the comparables are foreclosures. So I’m really having a hard time seeing the light at the end of the tunnel that you seem to see.

From the Sacramento Bee:

Sacramento-area homebuyers flocked to mortgage offices Monday to lock in some of the year's lowest interest rates following a weekend federal takeover of mortgage giants Freddie Mac and Fannie Mae. But inside one of the nation's hardest-hit housing markets, which has seen billions of dollars in home equity erased the past two years, it was still tough to gauge the longer impact. The early consensus among local mortgage brokers, home builders and economists was that the government takeover can't hurt and might be good for Sacramento's real estate market. At the very least, some said, it averts the possible disaster of a credit meltdown and means things won't get worse.
...
Brian Jacobosky, a Folsom house hunter, said he's pleased to see rates fall after the federal takeover. But he said, "That's not going to change our game plan." His family is browsing for a home after selling a house in Arizona and moving to Sacramento. Jacobosky thinks he'll get more financial mileage from declining sales prices than fluctuating interest rates.

Still Foreclosure Central Valley

From the CVBT:

With one in every 75 Stockton area households receiving a foreclosure filing in May -- more than six times the national average – the Central Valley city leads the nation in foreclosures. For the second month in a row, California and Florida cities accounted for nine out of the top 10 metropolitan foreclosure rates among the 230 metropolitan areas tracked in the report. Seven California cities were in the top 10, led by Stockton in the top spot. Other California cities in the top 10 were Merced at No. 3, Modesto at No. 4, Riverside-San Bernardino at No. 5, Vallejo-Fairfield at No. 7, Bakersfield at No. 8, and Sacramento at No. 9.

From the Sacramento Bee:

Sales prices for existing homes are down 40 percent from their 2005 highs in Sacramento County, and similarly down 36 percent in Yolo County, 31 percent in Placer County and 25 percent in El Dorado County.

The dollar volume of homeequity loans, too, has fallen. In 2007, homeowners in the four counties borrowed $2.1 billion less than they did in 2006, according to DataQuick Information Systems. During the housing boom's peak – 2002 through 2005 – consumers in those counties collectively tapped almost $22 billion in home equity. Sometimes even those who want to spend are finding their credit lines rescinded by lenders because of falling values, says Baker of D & J Kitchens and Baths.

From the Modesto Bee:

A combination of slow sales and a desire to do something different has led Gary Robinson to close his 33-year-old business, The Yard Lumber & Fence Supply in Modesto..."The timing just kind of fits," said Robinson, who explained that though the business is viable, he didn't want to keep it going during an economic downturn, waiting for sales to improve.
...
The Yard has about 20 employees, down from about 70 a year and a half ago, when Robinson said he consciously chose to scale back the business.

From the Lodi News-Sentinel:

Roughly 50,000 homeowners throughout San Joaquin County — one third of the total — will receive notices next month showing what they likely already know: That their home values are in a free fall. Ken Blakemore, the county's assistant assessor, said the notices should arrive July 10. They're the largest number to show declining values in a generation, if not ever, the longtime county official said.

"New But Blighted Fields of Dreams"

From the Modesto Bee:

The signs are painted over. The models are empty. All building has stopped at the three Falling Leaf subdivisions in Modesto's Village I. With less than half of the planned 314 homes complete, developer William Lyon Homes has quit construction. Empty lots growing weeds remain. Falling Leaf apparently is the latest victim of the housing market downturn plaguing the Northern San Joaquin Valley.
...
Falling Leaf repeatedly cut prices. Example: Its smallest house, a 1,620-square-foot plan, was priced at $379,000 in August 2006, then dropped to $329,990 by February 2007 and dropped again to $269,900 in April 2007. By last month, the development drastically sliced prices on its remaining inventory to about $100 per square foot.

From the Modesto Bee:

Modesto home builder Harinder Singh Toor hadn't planned on being a landlord, but he's become one because he hasn't been able to sell what he's built. Now he rents out eight custom homes, some as large as 5,400 square feet. "I built this house to sell, but I haven't gotten a single bite on it in a year," Toor said about the empty five-bedroom, four-bath house on North Canyon Drive. He had hoped to sell it for $1.2 million, but he'll settle for $3,000 a month in rent, even though that will cover only about half of his carrying costs.

From the McCook Daily Gazette:

The sign proclaimed "House for Sale (bank owned)." The construction looked recent and maybe a little ticky tacky but the place was obviously abandoned, with lawn, landscaping shrubs and trees dying from drought. A house, or three, down the block was not even completed but abandoned mid-construction. The current housing financial crisis is vividly on display in and around Merced, California. It was enlightening to drive through the new but blighted fields of dreams in the town that used to be our home some 35 years ago.
...
I asked my host, Jim Glidden, what happened to the people that purchased and then abandoned all the new housing...The speculators from San Jose and other affluent areas simply abandoned their investments. The poor souls who purchased a home to live in are emotionally as well as financially strapped and either leave to rent if their job is still available or just hang on by the skin of their teeth.

From the LA Times:

[Sean] O'Toole, 40, founded the website ForeclosureRadar.com last year. The site, he said, lists every default, auction and foreclosure in California...Rather than join the rush of those mining for gold in distressed real estate, O'Toole has set himself up as Levi Strauss once did. Instead of selling jeans to prospectors, though, he is selling foreclosure data to would-be buyers.
...
[In 2002] rather than compete with thousands of speculators flipping new homes, he scoured property records to find distressed houses. Over the next few years he bought and sold 152 such properties...He's stopped buying foreclosed houses because his time and money are tied up in the website, O'Toole said. But he also said he "doesn't want to catch a falling knife" as house prices plummet. Although the foreclosure explosion is fueling his business, foreclosure sales have turned into a speculator's market, O'Toole said.

From the Daily Democrat:

Yolo County officials released their 2008-09 recommended budget Friday, which included layoffs, hiring freezes and other hard-line cost-saving elements to keep even during the lean years predicted to come. "This is probably the most difficult budget for Yolo County in more than a decade," County Administrator Sharon Jensen stated in her budget letter to the Board of Supervisors. "The economy in California is still reeling from the massive shockwaves of the sub-prime mortgage crisis and its effects on housing values, the bond market and the consumer economy." As a result, the report stated the county will have to use $8.3 million of its reserve funds to keep afloat, leaving only $8 million left for a rainy day. In addition, the county's recommended budget proposed the elimination of 118 positions or six percent of the county's total workforce.

From the Sacramento Bee:

The collapsing housing market is squeezing all local governments, but Sacramento County is feeling a special pinch. Today, county supervisors will begin deliberating on a budget that could affect almost every resident in this county. Supervisors face a $123.7 million shortfall, and so they are considering cuts to medical clinics, senior centers, youth programs (to keep kids out of gangs), domestic violence counseling, probation services and many other programs.

From News10:

Cali Krystal of Sacramento said she came to EDD to discuss her efforts to seek work...The former state office technician moved from Santa Barbara to Sacramento in December. "The cost of living was really high in Santa Barbara," said Krystal. "I thought I'd relocate back to Sacramento where a lot of state jobs are here." But her job search has fallen victim to California's tough economic times. "I've been looking for work with the state since January," she explained. "Before they did the state budget cuts, I was being called for interviews back to back. Then once the [budget reduction] bill got signed, it all just stopped."

From the Modesto Bee:

United Way of Stanislaus County warned its partner agencies that a downturn in charitable donations will result in funding delays of up to six months. Overall giving, said Tom Ciccarelli, United Way president and chief executive officer, is down about 9 percent.
...
"I've been a CEO for a long time," Ciccarelli said, "and I've never seen an economy like this. What scares me is (the) 'perfect storm' of factors." With food and gas prices climbing, and the bottom falling out of the housing market, Ciccarelli said, more people are worried about hanging on to their jobs and paying their bills.
...
At the same time, Ciccarelli said, more people are turning to United Way and its partner agencies for help. "In this economy," he said, "we're seeing, and will continue to see, an increased demand for services. "All my life, I've pretty much been a 'half-full glass' kind of guy. But this is different. We really need to get out front and plan to weather this perfect storm."

From the Chico ER:

A government agency that tracks the price of housing and has flagged Butte County repeatedly for high appreciation again indicates falling prices in this market. The Office of Federal Housing Enterprise Oversight listed declines in Butte County house prices for the first quarter of 2008 in a study released last week...The service showed that comparing the first quarters of 2007 and 2008, Butte County's housing prices were down a little more than 7 percent this year...Long-time appraiser Tom Fiscus of Chico has confirmed that his business is down. "I've seen this (slump) three or four times, but never this bad. I've seen the requests (for appraisals) dwindle."

From Bloomberg:

The California Public Employees' Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines. Sacramento-based Calpers hired Morgan Stanley to review seven land deals it made with joint-venture partners and real-estate advisers, said fund spokeswoman Pat Macht.
...
U.S. home prices will fall another 10 percent through the end of next year, with even steeper declines expected in "bubble areas'' in parts of California, Nevada and Arizona where there's already an "overhang of supply,'' Michelle Meyer, economist for Lehman Brothers Holding Inc. in New York, said in an interview.

From the Daily Breeze:

The real estate broker who bought Rep. Laura Richardson's house at a foreclosure sale last month is accusing her of receiving preferential treatment because her lender has issued a notice to rescind the sale. James York, owner of Red Rock Mortgage, said he would file a lawsuit against Richardson and her lender, Washington Mutual, by the end of the week, and has every intention of keeping the house. "I'm just amazed they've done this," York said. "They never would have done this for anybody else."

From The Hill:

The Congressional watchdog group Citizens for Responsibility and Ethics in Washington (CREW) on Tuesday fired a shot at Rep. Laura Richardson (D-Calif.), describing her financial problems as “appalling” and calling her a “deadbeat congresswoman.”...“Rep. Laura Richardson’s appalling financial dealings raise serious questions about her ethics,” Sloan said in a statement. “What kind of responsible adult — much less elected public official — only pays her bills when she’s called out by journalists?

From KCRA:

'When you put on a super sale, people show up and buy'

From the Sacramento Bee:

[W]ith 12,000-plus "For Sale" signs in the region, the market hasn't yet reached bottom, said ReMax's [Randy] Dunham. At month's end there were 12,606 homes for sale in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based researcher TrendGraphix. The peak in August 2007 was 16,262.
...
"Borrowers are more cautious about what they can afford," said Michele Dillingham, a senior loan consultant at Sacramento-based Vitek Mortgage. "A lot of people are buying at below what they would qualify for. They saw what happened (with foreclosures) and don't want it to happen to them."

DataQuick stats by county
DataQuick stats by zip (or xls)

From Home Front:

Is this sustainable?

I asked veteran Sacramento real estate Carlos Kozlowski of Coldwell banker and his opinion was: yes. Kozlowski believes there is enough pent-up demand to absorb all the thousands of bank repos still to come on the market this year as rising numbers of people continue to lose their homes to foreclosure.

"Prices are not going up. Prices will stay somewhere about where they are until this inventory is absorbed," he said. Then will come the new wave of buyers: the foreclosure refugees allowed back in the market with new federally-backed mortgages. "People who lost homes a year or two ago will be able to buy in 18 months," he said.

From the Daily Democrat:

Yolo County home sales for April almost equaled those of a year earlier, although prices are still nearly 27 percent below last year's figures.
...
It's premature to say that April's numbers signaled a potential housing rebound in California, one of the nation's hottest markets during the boom, said DataQuick analyst Andrew LePage. Uncertainties include whether the economy gets stuck in a recession, whether the credit crunch persists, and if foreclosures continue to rise, he said. "I think we're a ways from seeing much of a rebound in home values," he said. "When you put on a super sale, people show up and buy."

From the Appeal Democrat:

Thousands of local residents will receive cuts to their property taxes this summer as a shrinking housing market pulls home prices far below the heights their owners paid in a once white-hot Central Valley market. Though the reductions will return more money to residents, assessors say it will chip away at already-thin police, fire and school budgets in the 2008-09 fiscal year, which starts July 1.
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The heaviest blows in Yuba County will be felt in the communities that sprang up or grew quickly in the first half of the decade, according to Brown — especially Plumas Lake, East Linda, the eastern foothills and Wheatland. The Linda Rural Fire District, whose area includes the 5-year-old Plumas Lake, now relies on property taxes for 80 percent of its revenue, he said.

So abrupt is the rollback that Yuba County officials predict a decline in the total value of residential parcels — a county first.

'Relying on Luck' in Folsom

From the Central Valley Business Times:

Five of the top ten [California] counties for foreclosures last month were in the Central Valley, led by San Joaquin County with 1,000 homes going on the auction block, a 700 percent increase over the number a year earlier. Stanislaus County is ranked third in the state on a per capita basis with Sacramento County fourth, Yolo County fifth and Merced County seventh, according to the computations by ForeclosureRadar.

From the Central Valley Business Times:

The Stockton metro area in the Central Valley had the nation’s second-highest home foreclosure rate last year among the nation's 100 largest metro areas, says a new report from RealtyTrac Inc. of Irvine, a foreclosure information company. With 4.866 percent of its households entering some stage of foreclosure during the year, Stockton saw a total of 22,184 foreclosure filings on 10,608 properties, up 271 percent from 2006, RealtyTrac says.
...
Other California metros with foreclosure rates in the top 20 are Riverside-San Bernardino at No. 4, Sacramento at No. 5, Bakersfield at No. 7, Fresno at No. 14 and Oakland at No. 16.

From the Sacramento Bee:

The city of Sacramento is sending out additional pink slips to 12 workers in its Development Services Department today, for a total of 28 full-time employees this month.
...
Development Services, which found itself in the red this year, has taken the first significant hits, said Director Bill Thomas. His department handles building permits, planning and inspections, among other tasks. "When you get a housing slump, we're the first to feel impacts," Thomas said.

From Bloomberg:

When Mary Kamanu paid $409,000 for a house in Folsom, California, she never imagined that three years later it would be worth about 20 percent less and she would have to pay the bank more than $80,000 just to sell the place. "I'm completely upside-down on my mortgage, like a lot of people,'' said Kamanu, who wants to move 12 miles away to live with her fiancé in a suburb of Sacramento. "I know I'm going to have to come up with a big chunk of change.''
...
Kamanu refinanced her house in May 2007 and owes $415,000 on her mortgage. Homes in her neighborhood now sell for about $330,000, she said...Kamanu said she doesn't want to put her life on hold until the housing market improves. She's planning a sunset wedding later this year on the beach at Folsom Lake, about half a mile from her property, even as she waits for a buyer.

She said she's willing to sell the three-bedroom, two-bath, 1,272-square foot house fully furnished and include two wide-screen televisions to entice a buyer. The home has a fireplace and a two-car garage. "I'm hearing it might be a year or two before the housing market comes back, and I can't wait that long," said Kamanu, 38. "I'm relying on luck, hoping that someone will come along and fall in love with the house, like I did.''

Sacramento Real Estate "A Little Too Rock n' Roll"

From the Central Valley Business Times:

Central Valley cities are among the most likely places in the nation to see home prices decline in the next two years, according to a report Tuesday from the PMI Group Inc. (NYSE: PMI), a Walnut Creek-based writer of mortgage insurance. The most likely place in the country is Naples, Fla., in PMI’s opinion, but Stockton and Merced are tied as the fifth most likely locations for price declines. PMI says the two Valley cities have a 91 percent chance of price declines...[#8] Sacramento was given a risk score of 73, up from 49, by PMI.

From the Central Valley Business Times:

The pace of home foreclosures in the Central Valley and across most of California is quickening, a foreclosure information company says Tuesday. There was a “gargantuan jump” in Notice of Default filings in December and “we’re already observing a record pace of auction sales in January,” says ForeclosureRadar of Discovery Bay...“Many analysts fail to understand the delays inherent in the foreclosure process, and I believe we have yet to see the real impact from the ARM resets that began in earnest last October.”
...
For the Central Valley, ForeclosureRadar’s figures for December’s NODs and sales are:
• Merced County: 373 NODs; 215 sales
• Stanislaus County: 1,033 NODs; 381 sales
• San Joaquin County: 1,402 NODs; 542 sales
• Sacramento County: 2,145 NODs; 972 sales
• Yolo County: 130 NODs; 59 sales

From the Sacramento Bee:

Eight U.S. financial institutions and two California foundations have contributed $4.6 million to help mortgage counseling agencies beef up California staffs increasingly overwhelmed by borrowers trying to avoid foreclosure, a statewide housing group announced Monday.
...
The positions will be spread across California's 80 federally certified nonprofit counseling agencies. Many new staffers are likely to land in Sacramento, said Alan Fisher, the coalition's executive director. "Sacramento is one of the places that has been hit hardest, and we think they could come up large in our effort," said Fisher.

From KCRA:

Kylee Roe bought this Sacramento duplex when the market was red hot...And after years in rock radio, Kylee started working in real estate. Lately, that's been a little too rock n' roll! "My salary's down 40% for the year. So, I've already been behind, and that's enough. So they say I don't qualify.

Kylee says she's now catching up with the help of a chapter 13 bankruptcy agreement. But she's worried about the next jump in her adjustable rate mortgage...due in June. "It's gonna up my payment by about $600 a month, and there's no way I can keep my house."

So Kylee says she tried to talk to her lender, countrywide, about fixing or freezing her interest rate. She says she knew her previous financial problems techically disqualified her, but....

From the Bakersfield Californian:

A developer's bankruptcy case -- one with ties to three projects in Bakersfield -- will be moved to a Sacramento courtroom from New York state, a federal judge ordered Monday. The change of venue is considered good news for a roster of construction companies owed money by subsidiaries of Dunmore Homes Inc., a once-prominent homebuilder from the Sacramento area. A group of construction firms requested the change, saying they had a hard time accessing court proceedings across the country. All of Dunmore's projects are in California.

From the Sacramento Bee:

A building moratorium is likely for Sacramento's fast-growing Natomas basin after federal flood-control officials said Tuesday they will designate the area as having a high risk of devastating flood damage because of inadequate river levees.

DQNews July 2007 Results (Take 2)

Let's try this again. Year-over-year (yoy) change in median prices for the 4-county area (resale single family residences and condos as well as new homes):

• El Dorado: -0.94%
• Placer: -6.52%
• Sacramento: -11.10%
• Yolo: -5.37%
  

Sacramento County's median price has now declined 14 consecutive months on a year-over-year basis. The number of California counties with yoy declines has doubled since last July (from 11/32 to 22/32). Five counties registered double-digit drops.

"A New Hit" on the Sacramento Housing Market

From the Sacramento Bee:

...[H]omebuyers are also finding fewer loan products available to finance their buys, say Sacramento-area lenders. They claim widespread investor concern over the rising risks of loan defaults and foreclosures is shrinking the pool of money for home loans. "There's a lot of product this week that's been taken off the shelf," said Brent Wilson, mortgage strategist with Sacramento-based Comstock Mortgage.

No one is sure how long this surge of credit tightening will continue. But it signals a new hit on a Sacramento-area housing market already coping with rising defaults, slow sales, excess supply and downward price pressure in many neighborhoods.

Also from The Bee:

All over the capital region, home builders are trying smaller lots and shaving extras to bring down prices. But some El Dorado Hills architects are unveiling the ultimate, a return to something not seen here in years. It's the $150,000 house. This is not as far-fetched as you might think. Prices for new small-lot houses already are dipping to $230,000 in parts of the region.
...
[B]ased on what we know to be true on sales of homes now, $150,000 is very achievable," says Kerrin West...West believes "the market for this is huge." "We've got so many folks priced out of the market," she says. "Also, on the flip side, people are making too much money to qualify for low-income housing." Should builders eventually sign on, these could be the first $150,000 new houses seen in the region since the earliest days of a housing boom that began to take shape in 2000.

From CNN Money:

...[M]otivated sellers may have to slash prices to move properties. Already, in Sacramento, 48 percent of sellers have discounted from their original listing price. Some 47 percent of Orange County, California sellers have dropped their price and more than 45 percent of sellers in both Boston and Phoenix have done the same.

From Bloomberg:

The 9,000 unsold houses sitting empty in Northern California's Sacramento and Yolo counties aren't just a headache for owners: They're a threat to public health. The danger is in their yards, where deserted swimming pools, spas and ponds provide prime breeding grounds for mosquitoes. That heightens the risk of West Nile virus....

About 1,200 of the empty houses are known to have swimming pools, said Greg Vlasek, director of government relations for the Sacramento Association of Realtors.
...
Real-estate agents are being drafted to help combat the spread of the sometimes fatal virus. Health officials asked agents to report vacant residences with standing water, in what the National Association of Realtors says is an effort unique to the Sacramento area.
...
More than 1,000 homes have been reported since the program began in May, Brown said. The average time a single-family home sits on the market in Sacramento was 52 days at the end of June, according to the Sacramento Association of Realtors. The selling time tripled in the past three years.

DQNews July June 2007 Results

Change in Median Sales Price from July June 2006 (resale single family residences and condos, new homes)

El Dorado: -0.82%
Sacramento: -11.17%
Placer: -4.33%
Yolo: -4.39%

About [edit] A year ago, this blog noted that 11 counties registered year-over-year price declines. Now 25 out of 32 counties have joined California's depreciation club (whose founding member was Placer). Nine counties made the exclusive double-digit depreciation list.

California Breaks 90s Foreclosure Record; Another High For Sacramento

From DQNews:

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 17,408 during the second quarter. That is the highest number in DataQuick’s statistics, which go back to 1988. That was up 57.8 percent from 11,032 for the previous quarter, and up 799.2 percent from 1,936 for last year’s second quarter. The prior peak of foreclosure sales was 15,418 in third-quarter 1996....
...
Roughly half, 54.6 percent, of the homeowners in default emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was 88.0 percent.

From Bloomberg:

The number of defaults resulting in foreclosures is the highest since DataQuick began keeping records. The previous high was in early 1994, when about 30 percent of defaults resulted in foreclosures, Karevoll said.
...
Homeowners received 53,943 default notices, more than double the 20,909 filed a year ago....Last quarter's default level was the highest since the fourth quarter of 1996, when 54,045 notices were recorded in California...The number of default notices sent to homeowners in California...has averaged 34,172 quarterly since DataQuick...began tracking the data in 1992.

From the LA Times:

When the increase in housing stock over the last decade is taken into account, foreclosures are running roughly equal with the 1996 peak.
...
"We're clearly in for a worse third quarter and an even worse fourth quarter," said John Karevoll, chief analyst at DataQuick Information Systems, which compiled the data.
...
Karevoll said the default numbers reflected a wide regional disparity. They were at record levels in Riverside, Contra Costa, Sacramento and most Central Valley counties, where many of the state's first-time buyers live.

From the Sacramento Bee:

Sacramento County, with 1,662 foreclosures and 3,840 notices of default, had the region's greatest share of foreclosure related activity.

"It's like that book, 'The Perfect Storm,'" said Sacramento real estate agent Carey Covey, a specialist in marketing homes repossessed by banks. "All the factors have come together to create this situation."

Sacramento County:

• Notices of Default (NOD) Year-over-Year Change: +184%
  
• Foreclosures Year-over-Year Change: +850%
  

Placer County:

• NODs: +127%
  
• Foreclosures: +659%

Yolo County:

• NODs: +201%
  
• Foreclosures: +10,200%

El Dorado County:

• NODs: +158%
  
• Foreclosures: +2,125%

'Right Now There is Fear About Housing'

From the Sacramento Bee:

Lengthy housing slump expected

Here's the forecast from two more experts on the housing market: The slump is likely to continue through the rest of this year and most of 2008.
...
"I think we're going to be dealing with this all the way through 2008," Countrywide Home Loans Executive Vice President Jack Haynes told Sacramento home-building industry representatives Wednesday.

"We think it's going to take until mid to late 2008," Timothy Sullivan, president of San Diego-based Sullivan Group Real Estate Advisors, told the gathering. The two spoke at a downtown Sacramento seminar about the economy and the housing market, and how home builders can weather it.
...
Year-over-year declines [for existing homes] were 2.1 percent in Sacramento County and 6.5 percent in Placer County, the two biggest segments of the area's housing market. Yolo County posted a 4.2 percent gain in sales prices, the region's only year-over-year increase...New homes, though, continue to show double-digit annual declines of 22.3 percent in Sacramento County and 12.5 percent in Yolo County. [Median price for all sales was -7.0% in Sacramento County].
...
Many in the real estate business have said the loss of 100 percent financing and some riskier subprime loans for people with spotty credit histories has eliminated up to 30 percent of would-be buyers.
...
Sullivan of Sullivan Group Real Estate Advisors blamed the market slowdown on tighter lending rules as well as the lack of urgency among other buyers. "Right now there is fear about housing," he said. "There is fear you can't win at housing."

DataQuick Sales/Price Data by County [pdf]
DataQuick Sales/Price Data by Zip

Zacramento

From the Sacramento Business Journal:

Median home values in the Sacramento area dropped 7.4 percent in the first quarter from a year ago [and down 9.2% from peak], the latest evidence the housing market slowdown continues in the region.

Yolo County endured the region's largest decline in value, at 13.2 percent to $394,990, according to Zillow.com, an online real estate tracking company in Seattle.
...
Sacramento County had the region's second-largest drop at 8.1 percent to $354,681. Existing home prices in El Dorado and Placer counties fell 6.4 percent and 3.5 percent, respectively.
...
All 35 communities in the four-county region -- from Antelope to Woodland -- reported declines in price. [Also, all but one neighborhood in the city of Sacramento suffered price declines, according to Zillow.]

Click here to compare to other price indexes.

Not So Soft Landing: Sacramento Median Price Down By Double-Digits YOY

March 2007 median price statistics from DataQuick's dqnews.com (and archived here):

• El Dorado: -13.72%
  
• Placer: -7.79%
  
• Sacramento: -10.53%
  
• Yolo: -12.59%
  

Statistics are for resale single-family residences and condos as well as new homes. Percent change is from the same month last year or "year-over-year" (yoy).

Significantly, this was the first time Sacramento County's median price breached the negative double-digit threshold for this particular price measurement. It was also the 10th consecutive month of yoy price declines.

Click here to compare with other Sacramento housing market price indexes.

'I didn't figure they'd go up this fast.'

Sacramento County Default Notices, Q1 2007 per DataQuick: 3,234

• Change from Q1 2006: +185%

From the LATimes:

The number of Californians losing their homes to foreclosure rose in the first three months of the year to the highest level in a decade, a real estate information service said today, providing grim evidence that the shake-out in real estate is nowhere near over. Foreclosures totaled 11,033, up 802% from the placid levels of early 2006, according to DataQuick Information Services in La Jolla.
...
"I figured they'd go up," said DataQuick analyst John Karevoll. "I didn't figure they'd go up this fast."

The default and foreclosure totals varied widely by area. Generally, the places with the cheapest housing--such as the Inland Empire and Central Valley--fared the worst.

From News10:

Some 3,400 Sacramento County property owners faced foreclosure in the first quarter of 2007, up nearly 200 percent from the same period last year. In sheer volume of defaults, Sacramento County is in the top ten nationwide. The figures from Fair Oaks-based Foreclosures.com represent filings from lenders against homeowners who've defaulted on their loans. A notice of default is the first step before the homes can be sold at auction.

The hardest-hit county in California based on percentage was Yolo, with a nearly 400-percent increase from the year before. San Joaquin, Solano and Yuba counties all experienced at least a 200-percent increase in defaults.

'It's Kind of a Tough Market'

From the Sacramento Bee:

For two months, it looked like Sacramento might finally be climbing out of its housing slump. Then the bottom fell out of the subprime loan market and threw home sellers a curve.

"It's kind of a tough market," said Pradeep Gosai, who relisted his $529,000 house in Natomas this week after turning down offers last year that were "different from what we wanted." "Now it's a lower price than last year. I hope we make it," he said.
...
Builders and real estate agents attribute the unexpected March slowdown to negative publicity from the subprime lending industry meltdown and tightening of lending standards that eliminated would-be buyers.

Sacramento real estate agent Carey Covey said many first-time buyers no longer qualify for today's more demanding loans. Across the nation, lenders battered by rising defaults and foreclosures are again requiring down payments from buyers and detailed proof of income.

"They actually wanted the buyers to have a pretty good credit history and a job and some income coming in," said Covey, who now is trying to sell 42 properties repossessed by the banks.
...
March closings represent sales started in December, January and February before extensive publicity about imploding subprime lending firms and tougher new lending rules.
...
DataQuick Information Systems reported this week that the median price of [all] homes fell from February to March in five of eight area counties -- dropping by $20,000, to $460,000 [-13.4% yoy], in El Dorado County, for example, and by $15,250, to $340,000 [-9.3% yoy], in Sacramento County....[M]edian sales prices of existing homes remain about 6 percent lower than last year in Yolo and Sacramento counties and about 7 percent lower in Placer.
...
The inventory of resale homes on the market continued its seasonal rise in March, according to Sacramento-based TrendGraphix, raising the specter of further price declines and fierce seller competition ahead. TrendGraphix reported 12,500 listings -- 1,090 more than last month -- in El Dorado, Placer, Sacramento and Yolo counties, while the Gregory Group showed new home builders have 4,268 houses in their unsold inventory, a 15-week supply.

"Inventory is still the elephant in the living room," said Gold River real estate agent Randy Dunham. "That's why we've had an almost 1 percent drop in values each of the last six months."

Price/sales chart
Inventory graphs
Price by zip chart

From the Sacramento Business Journal:

New-home sales rose 30 percent in the first three months of the year compared with the same period in 2006, a sign that aggressive pricing might be continuing to lift Sacramento homebuilders out of the depths of the slump.

New-home inventories, however, crept up after falling last quarter for the first time in two years, according to a report released today. And homebuilders aren't certain what the fallout will be from the subprime mortgage meltdown as lenders are floating fewer loans to homebuyers with questionable credit.

"Pricing is down, and that's part of the reason why sales are up," said Greg Paquin, president of the new-home analyst The Gregory Group, which tracked the first quarter new-home sales figures for the six-county Sacramento region.

The average new home in the region sold for $465,100, down 6.3 percent from a year ago. His figures show the median home price has dropped even more -- 9 percent to $423,900. Homebuilders have dropped those prices to compete for buyers.
...
He noted there were a record 390 separate new-home projects within the six-county area selling homes and competing for buyers. So while sales numbers were up, the overall sales rate for the region has stayed level for the past six months. The region's new-home inventory -- everything from a completed home to a lot ready for construction -- increased by 8.7 percent. Analysts believe inventory is key to a turnaround because a large supply gives buyers plenty of options and increases competition, further dropping prices.
...
What does all this mean for the rest of 2007? "That's anybody's guess," [Doug] Pautsch [Sacramento division president for Centex] said. "This year should be similar to last year. It's not going to skyrocket."

Sacramento Housing Market Statistics

More DataQuick median price numbers for February via dqnews (and archived here):

• El Dorado: -1.34%
  
• Placer: -5.38%
  
• Sacramento: -6.98%
  
• Yolo: -10.00%
  

Data is for resale single-family residences and condos as well as new homes.

Since Placer County became the first California county to register a price decline back in January 2006, the 4-county region has largely dominated the California depreciation club. In February 2007, that distinction passed to Merced County, which registered a 14.67% decline.

Significantly, February was the first month in which all listed Central Valley counties chalked up year-over-year (yoy) price declines, with Kern County finally succumbing:

• Fresno: -6.33%
  
• Kern: -1.83%
  
• Madera: -5.27%
  
• Merced: -14.67%
  
• San Joaquin: -7.11%
  
• Stanislaus: -9.38%
  
• Tulare: -4.09%
  

Here are February results from the California Association of Realtors. This data is based on MLS single-family homes sales in the Sacramento region.

• Change in median price (yoy): -1.2% [8th month of yoy declines]
  
• Change in median price (from peak): -5.2%
  
• Change in homes sold (yoy): -17.5% [23rd month of yoy declines, 18th month of yoy double-digit declines]

Here are the Sacramento Association of Realtors (SAR) results for February. Figures are for MLS single-family home sales in Sacramento County and West Sacramento. Additional statistics are available here.

• Change in median price (yoy): -1.5% [8th month of yoy declines]
• Change in median price (from peak): -6.4%
• Change in homes sold (yoy): -14.7% [21st month of yoy declines, 18th month of double-digit declines]

The SAR sales graph has been updated. Click to enlarge.



Interestingly, in SAR's press release [pdf], the organization acknowledged the impact the sub-prime implosion is likely to have on the Sacramento housing market.

The Association of REALTORS® is aware that the widely publicized restructuring in the sub-prime lending market will likely have a dampening effect on real estate sales, at least in the short term. "Being entangled in risky loans and a declining market is clearly painful for lenders as well as mortgage borrowers,” said [SAR President Tracey] Saizan. "More disciplined lending policies will be good in the long run for home buyers and the mortgage bankers who serve them."

Given the mortgage meltdown, will sales peak in March as they did last year?

Want more? Julie Jalone has TrendGraphix's press release for February. Based on the press release and the information available at golyon.com, the average price per square foot in Sacramento County declined 5.0% from last year and 9.4% since peaking in September 2005. Pending sales dropped 8.5% from the prior year.

Location (Negative), Location (Negative), Location (Negative)

For the first time in the current housing bust, every reporting zip code in Sacramento County showed a price decline in January from year ago levels. The following graph shows the percentage of zip codes registering price drops based on the median price per sq. ft. of resale single-family detached homes. Click to enlarge.



Agent Bubble has been kind enough to provide average price per sq./ft. data for all residential MLS listings in Sacramento County (for January):

• Change in price since last year: -9.9%
• Change in price since 2005 peak: -12.0%
  

Meanwhile, the California Association of Realtors released their price and sales data for January 2007. The data is based on MLS single-family homes sales in the Sacramento region.

• Change in median price since last January: -3.4%
  
• 7th month of year-over-year (YoY) price declines
  
• Change in median since price peak: -8.6% (down $34,110)
  
• Change in homes sold since last January: -20.9%
• 22nd month of YoY sales declines, 17th month of YoY double-digit declines

DataQuick's dqnews.com also has January's city/county numbers for combined sales (resale single family residences and condos as well as new homes). Yolo County continues to lead California in year-over-year price declines.

• El Dorado: -6.81%
  
• Placer: -9.01%
  
• Sacramento: -6.25%
  
• Yolo: -22.50%
  

January's DQ stats are archived here.

Hope in Sacramento? Sales, Prices, Pendings Down; Inventory, Foreclosures Up

From the Sacramento Bee:

How does the capital region's housing market look so far this year? Not unlike last year -- but with a bit more hope that the free-fall in prices and sales may be ending.

The new year opened last month with the fewest escrow closings for a January since 1998, according to property researcher DataQuick Information Systems. The firm reported similar slides to 1990s levels in the Bay Area and Southern California.
...
DataQuick reported 2,522 buyers of new and existing homes picked up the keys last month in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties -- down from 2,999 the same time a year ago.
...
Median sales prices, meanwhile, continued a months-long trend of falling below the same month a year earlier in seven of eight capital-area counties. Only Nevada County saw higher sales prices than in January 2006.
...
Sacramento County reported a median January sales price of $345,500 for all new and existing homes, down 6.6 percent from the same time last year. In December the year-over-year decline was 9.1 percent. Likewise, Placer County's median $423,500 median sales price was down 10.8 percent from January 2006. In December prices were down 18.2 percent from a year earlier.
...
January also ended with 10,971 existing homes for sale in El Dorado, Placer, Sacramento and Yolo counties, according to Sacramento-based real estate researcher TrendGraphix. That's nearly triple the number of homes for sale in January 2005 and a major contributor to falling prices, analysts say.
...
Many in the real estate industry predict that a housing recovery could take hold during the year's second half. But others worry that too many homes for sale and growing foreclosure activity could prolong or worsen the region's housing slump.

Sacramento's Zindex

From Zillow Blog:

Overall, across the U.S. areas Zillow covers, home values showed their first year-over-year (YoY) decline since the start of the data series in 1997, with the Zindex recording a slight decrease of 0.48% from its Q4 2005 level (see the figure below). This is substantially down from the year-over-year increase of 5.0% in Q3 and the quarter-over-quarter (QoQ) change of -4.8% for Q4 is significantly off the 2.4% QoQ increase in the prior quarter.

Performance varies widely by metropolitan area as seen in figure below showing year-over-year appreciation rates for the top 25 largest metro areas. Seattle, Portland and Charlotte appear to be booming with YoY increases above 11%. Greenville, Sacramento and Boston are lagging with YoY decreases greater than 5%.

You can download the Sacramento spreadsheet here [xls]. Some highlights:

YoY Zindex Change

• El Dorado: -4.81%
  
• Placer: -5.97%
  
• Sacramento: -6.74%
  
• Yolo: -8.64%
  
• Sacramento (city): -6.75%

The spreadsheet also contains information by city and neighborhood.

• Cities in the region with a negative Zindex: 84%
  
• Neighborhoods in Sacramento (city) with a negative Zindex: 90%
  

What is a Zindex?

The Zindex home valuation index is the median Zestimate valuation for a given geographic area on a given day.

How does it differ from the median sales price statistic?

One popular method is using the median sale price of homes over a certain period of time, such as a month. While interesting, this measure is problematic because it is influenced by the mix of housing sold in the period of time associated with the metric.

For example, if high-end homes were not selling very well, but mid-range homes were, then the median sale price will be lower than it should be. It will not be an accurate reflection of the "general" level of home values because the median is taken from the set of mid-range home sales that happened in the period, ignoring the high-end homes that didn't sell. The median sale price would be a perfectly accurate reflection of home values in an area if every home were bought and sold in the particular time period. Since this is highly unlikely, the median sale price is biased to the extent that the homes sold in a given period are not completely representative of all the homes in the area.