DataQuick: Sacramento Median Price Back to 2000 Levels

Another milestone.

From the Sacramento Bee:

Prices keep falling.

February brought the lowest median sales price to Sacramento County's housing market since December 2000 as bank repos drove a decline to $160,000, researcher MDA DataQuick said Thursday. The county median...is down 59 percent from a 2005 high of $387,000.

Statistics by county

Modesto & Stockton metros are now down 66% from peak, while Merced hit -72%.

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.
...
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.

From CBS 13:

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.

"The [Stockton] Man Who Started the Global Recession"

From Time:

Some communicable diseases can be traced back to what medical researchers call "patient zero", the first carrier of an illness and often someone who has no symptoms...The global recession has a "patient zero", a single person who set off the series of events which may lead the economy into its greatest downturn since The Great Depression and, by some estimates, push 50 million people around the world out of jobs this year, according to The International Labour Organisation. "Patient zero" bought a house in Stockton, California, in 2003 after getting a subprime mortgage. He defaulted on that mortgage 39 months later.

From the Stockton Record:

Tonight Stockton will get another dose of national attention as a foreclosure hot spot in yet another round in the TV spotlight. This time, though, say the producers of the "Deals on the Bus" series by Discovery's TLC channel,...will show a new real estate trend: People riding in tour buses in the quest to buy nice yet affordable homes in communities hard hit by the housing downturn. "It's kind of like speed dating for homes," said executive producer Carlos Ortiz of Actual Reality Pictures, an independent Los Angeles-based film company that has filmed such reality-genre programming as "Flip That House" for TLC.

From News10:

The managing broker behind a failed mortgage operation posted a rambling essay on the company's Web site describing his years of fraudulent activity and asking for forgiveness. The seven-page essay by Christopher Warren, 27, replaced the home page of Triduanum Financial which abruptly closed its doors last month.
...
Warren said WTL Financial faked credit scores and W-2s to peddle loans to investors who failed to scrutinize the files. "I made over $2.25 million, all of which was spent on 24 cars, five houses and drugs," he wrote.

From the Sacramento Business Journal:

A custom homebuilder that had been among the region’s top in revenue before the housing downturn is preparing to file for bankruptcy as it’s being investigated for fraud and other complaints. The Contractors State License Board has referred two complaint violations against Ultimate Development Inc. of El Dorado Hills to law enforcement agencies for investigation.
...
“The recession has essentially shut down residential construction and there are virtually no credit opportunities available anymore,” he [owner Kevin Javaheri] said.

From Home Front:

The Construction Industry Research Board and California Building Industry Association now reports 65,380 construction starts in 2008. It's the lowest since CIRB began keeping records in 1954 in the Eisenhower Administration.
...
It's so low that even in the lowest point of the 1990s recession - 1993 - with Southern California base closings, a defense industry imploding in the wake of the cold war ending, with job losses from San Diego to Eureka, builders still planted 84,656 houses on California soil. That's 19,276 houses more than last year.

From the Sacramento Business Journal:

The worst period in the construction industry was in 1990 and ’91, and we’re fast approaching that now. The only reason we’re not already as bad now as then is that voters approved some infrastructure bonds and that money is still available and working. As a consequence, our picture is not as bleak as, say, homebuilders. But if the state doesn’t come up with a plan by Feb. 1 and it runs out of money, our industry, and the state, could be worse off than it was in 1990 and ’91.

From the Sacramento Bee:

Fighting to avoid a bankruptcy filing and apparently unable to finish the job, the developer of the long-delayed Elk Grove Promenade shopping mall is seeking investors to bring the project across the finish line...The mall has become something of a poster boy for the Sacramento area's hard-hit commercial real estate market...The mall's opening has been postponed three times, the victim of a poor economy and Elk Grove's disastrous housing market.

From the Sacramento Business Journal:

For Ike’s Landscaping, business started spiraling downward halfway through 2008...Although Ike’s had a strong first half in 2008, [president Eric] Aichwalder said, “We’ll be down to 20 employees in the next few months.” Ike’s employed 133 last year.

The bottom line for commercial landscapers is the market’s getting tougher. “Owners are watching all their dollars because tenants are coming to them for reduced rents,” said Ken Reiff, managing partner in the Sacramento office of brokerage NAI BT Commercial.

From Inman News:

[According to Radar Logic] San Francisco had the highest [price] decline, at 36.8 percent year-over-year during the November period, followed by Phoenix (down 34.6 percent) and Sacramento, Calif. (down 32.4 percent).

From the Modesto Bee:

Rental home rents also have become a bargain throughout in the region. "The economy is driving the rental prices down," said Kris Marin, who manages about 250 rental properties in the Northern San Joaquin Valley for Tri-Tal Realty. "There are a lot of vacancies. It's hard to find good, qualified tenants if the rent is too high." So to get homes occupied, Marin said, monthly rents have fallen about $100 for three-bedroom homes and about $200 for four-bedroom homes.
...
Al Nazmi said his family members have purchased more than 20 foreclosed houses during the past 18 months..."Most Modesto investors have run out of cash to buy homes the last three months," said Nazmi, noting how few people attend the daily foreclosure auctions on the county courthouse steps. But out-of-town investors are filling the void: "I have friends in neighboring states who are buying homes in Modesto now." All those investors are turning former owner-occupied houses into rentals. Those homes now compete with apartment complexes for tenants.

From the Press Democrat:

Exchange Bank reported an $18.5 million year-end loss Friday, its first annual loss in at least five decades....The problem loans are concentrated in construction lending, largely among loans made to home builders in the Sacramento region. The bank expanded into the Sacramento area earlier this decade near the peak of the housing market. Now, with housing mired in a deep downturn, many builders are struggling to stay in business and pay off their loans.

From the Appeal Democrat:

Plummeting revenues due to the construction slowdown will lead to layoff notices for eight Yuba County employees and the deletion of 12 vacant positions.
...
[Supervisor Mary Jane] Griego noted the development boom that preceded current conditions and that she said was spurred in part by dramatic increases in housing prices in Placer and Sacramento counties. Those increases helped push development into Yuba County, she said. "We'll never see that again," Griego said of the extraordinary rise in home values in this region and the rest of California. "It was like the stars came together for Yuba County."

From the Sacramento Bee:

The economy is in such wretched shape – finishing 2008 with its worst performance in a quarter century – that some forecasters have begun writing off 2009 as well...Some analysts are rethinking predictions that the recovery would start in late 2009; now they're talking 2010...Two weeks ago, [CSU Sacramento economist] Suzanne O'Keefe said job growth could resume in Sacramento by September. Now she says it probably won't happen until 2010.

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.

"Serious Trouble" Ahead

From News10:

A big presence in the Northern California home-building industry says it could be shutting down some projects. John Laing Homes spokeswoman Linda Mamet confirmed to News10 Wednesday the homebuilder is "reviewing operations based on market conditions and will determine whether sales will continue. Some offices may be closed. It is not clear on whether all or part of the Sacramento area operations will be closed."
...
Sacramento real estate consultant Jake Allen says the company appears to be in serious trouble. "I think it's a very sobering sign of the times, when we see a large, national builder like John Laing Homes that is essentially on the ropes at this point in time and looks like fighting for their life."

From the CVBT:

There’s a smidgen of good news for the Central Valley in the latest PMI Mortgage Insurance Co.’s “risk index.” The region, where the mortgage meltdown started more than a year ago, is surpassed by many Florida cities that PMI estimates will have the risk of lower house prices two years from now. Still, virtually every metropolitan area in the Central Valley is ranked at better than a 90 percent likelihood of further price declines.
...
Merced (High) 95.4
Modesto (High) 96.5
Sacramento (High) 96.3
Stockton (High) 96.6

From the CVBT

The Stockton metropolitan area in the Central Valley led the nation in 2008 in per capita foreclosures, according to a report from RealtyTrac Inc. of Irvine, a foreclosure information company. Stockton’s foreclosure rate last year was nearly double that of 2007, says RealtyTrac, up 99.16 percent. There were 21,127 homes in some level of foreclosure in Stockton last year, or 9.46 percent of all homes.
...
Sacramento was ninth, says RealtyTrac, with 39,876 homes foreclosed or 5.20 percent of all units.

From CNN Money:

[RealtyTrac's Rick] Sharga thinks that as many as 70% of the bank-owned homes listed on RealtyTrac's site have not yet been posted on multiple listings services (MLS), the industry databases of homes for sale. Those homes are less likely to be sold because most real estate agents won't know they're available. "Either banks are overwhelmed and can't get the houses on the MLS quickly, or they're deliberately slowing down so they don't have to take markdowns to actual home values on their books," Sharga said. Either way, it has the effect of underestimating the foreclosure inventory problem.

From the Sacramento Bee:

Facing a projected $8.6 million shortfall in the current fiscal year alone, the city of Folsom on Tuesday took the first step toward effectively throwing out the current budget and adopting a new 18-month spending plan that would take the city through June 30, 2010. The proposed plan calls for the elimination of 55 positions – including 39 layoffs – and service cuts. Folsom joins other area municipalities looking to cut because of the recession.

From the Sacramento Bee:

Faced with losing 43 jobs, including a dozen police and firefighter positions, Lincoln's remaining city workers also have been asked to take a two-year pay freeze.

From the Sacramento Bee:

Roseville city officials announced Monday a voluntary employee buyout program to close a nearly $4.5 million budget gap. The city has been freezing positions and cutting costs since March 2007, but another 40 to 50 positions must be eliminated, City Manager Craig Robinson said in a letter to employees.

From the Sacramento Bee:

The city of Sacramento is more than $11 million short of balancing its books, meaning more cutbacks are likely in the coming weeks. Mayor Kevin Johnson said Monday that "the outlook is not good" for a city that already made significant cuts in recent weeks.
...
Asked if it is likely city officials will need to make midyear cuts next month – either through layoffs or reductions in services and programs – Johnson said, "I think we will have to."

Fortune on Sacramento Real Estate: 5th-Worst Market in 2009

Fortune Magazine says the Sacramento real estate market will be the 5th-worst market in 2009, with the median home price projected to decline 22%. However, Fortune expects prices to rise in 2010, albeit only 2%. (hat tip DJ)

High jobless rates and low population growth are helping burst the capital city's inflated housing market.

Stockton is #2.

From the Sacramento Bee:

[Average Buyer:] Back then (early 2007) I interviewed several agents. They all said the same thing: "Oh, it's just going to kind of ebb a little bit and go down." I'm thinking, "How can that be?"...That's when I kind of went looking for alternative answers and the experts in the field. That's when I found some of the other regional blogs and found an alternative view.

[Jim Wasserman:] What was that?

[Average Buyer:] They were more bearish on the market. They were saying things which were not mainstream at all at that point. That was the point before Wall Street, before pundits started acknowledging that things were going to happen. I read the Wall Street Journal every day. In August 2007 everyone was saying, "Oh, it's just a little shaky. Things are good now." Then it was spring (2008) and we start losing Bear Stearns. And it was, "Oh, we're over it now and we're into summer." They just keep having this false sense of delusion.

From the Sacramento Business Journal:

Not everybody is a fan of Sacramento’s vacant building ordinance, which was approved in August 2007. “The city is creating a perfect storm for themselves with this new ordinance,” said Bruce Slaton, a real estate agent who works in south Sacramento. “If a house has $20,000 in fees and $30,000 in fines on a property that’s worth $40,000, the deal just doesn’t work,” he said. “The city might end up getting a lot of these handed to them by the banks.”

In some cases, he said, potential sales of foreclosed homes don’t work because the house was cited for violating the city’s dangerous or vacant building codes. “By the time the banks get these homes back from the trustee sale, they’ve got thousands of dollars of fines and fees on them,” which some banks try to pass through to the buyer, Slaton said. “And if the city doesn’t relax some of these fees, it precludes a lot of buyers from doing anything with them.”

From the Sacramento Business Journal:

The Sacramento Metropolitan Statistical Area, which includes Sacramento, Arden-Arcade and the Roseville area, saw its occupancy fall to 93.8 percent in the third quarter compared to 94.3 percent in third-quarter 2007, according to TRI Commercial’s apartment advisory team.

From the Sacramento Bee:

Five Sacramento County ZIP codes had median sales prices below $100,000 in November, according to property researcher MDA DataQuick.

From the Modesto Bee:

"It comes down to just the sheer volume of problem loans in your area," said Rick Sharga, senior vice president of RealtyTrac, which monitors foreclosures nationwide. Sharga predicted the [Northern San Joaquin Valley] region will continue to lead the country in foreclosures through 2009.
...
Mike Zagaris, president of Modesto-based PMZ Real Estate...is concerned that many current owners are giving up their homes because they've lost so much equity. "I'm being told by my people in the trenches that the vast majority of those facing foreclosures now have no interest in redoing their loans. They just want out," Zagaris said. "If that's true, there's no stopping these foreclosures."

From the Modesto Bee:

The recession dug deeper into Stanislaus County last month, sending the jobless rate to a nearly 10-year high of 12.4 percent, the state reported Friday. It was the county's highest monthly rate since the 12.8 percent of January 1999 and the worst November since the 12.5 percent in 1997.
...
The collapse of the housing market in the past three years bears much of the blame. Real estate agents, builders and people in related businesses have lost jobs. "Those industries, of course, are related to the housing and credit crisis," said Liz Baker, a labor market analyst for the EDD.
...
Still, the overall numbers...are well down from the early and mid-1990s, when unemployment sometimes hit the high teens.

Uh-oh. Last time the media said something was not as bad as the 1990s, all hell broke loose.

From the Modesto Bee:

The Northern San Joaquin Valley has been hit especially hard in the economic downturn because of foreclosures and other fallout from the housing market collapse. Agriculture and related fields have been relatively strong, but even they can be hit by the economy's troubles. Roberts Ferry Nut Co., which sells almonds and other items in Christmas gift packages, has seen a roughly 15 percent drop, co-owner Dan Mallory said. "I just don't think the consumer has the same buying power as before," he said.

From the Associated Press:

Robert Ecker was bored with retirement, so he went back to work as a housing appraiser in Stockton. He trained four other appraisers during the real estate boom — all of them are now out of the business. "Since the real estate market closed down, I grew a beard and now I'm doing this," said Ecker, dressed in the trademark red suit with white trim. "The older kids are asking for clothes now, rather than gifts," he said. "Most of them are asking for one gift."

From Stockton to Miami, from ritzy Las Vegas to gritty Detroit, cities with the worst real estate markets led the U.S. economy into recession. Skidding home prices and soaring foreclosures have magnified the broader woes of unemployment, stock market turmoil and hard-to-get loans. Holiday shoppers are making a list, checking it twice, and then scratching off the nonessentials.

Stockton: $250,000 Off Peak

From the Stockton Record:

TrendGraphix said the median sales price fell from $190,000 in October to $175,000 last month in San Joaquin County. That compares with a $200,000 sales mark in January 2002, when TrendGraphix began tracking sales as the market was well into the start of a six-year boom.

That's a whopping $250,000 price cut from its $425,000 peak in September 2005.



From CNNMoney:

The worst performing market in the nation [according to Zillow.com] was Stockton, Calif. The average home price there plunged 32.3% year-over-year to $210,179 in the first three quarters of 2008. Almost as bad were nearby Merced, down 31.2% to $167,282, and Modesto, was was off 30.4% to $197,368 in the same time period.

[Zillow's Stan] Humphries expressed surprise that these areas are still performed so poorly. "I would have thought that they would have produced some more positive trends by now," he said, "but we are seeing no slowdown."

From the Christian Science Monitor:

The housing market in California's Central Valley...is showing signs of new life...Buyers are out in force. Here in Lathrop, Calif., and in nearby Stockton – the nation's foreclosure capital – home prices could be bottoming out..."At this point, I don't think you'll see more price declines in Stockton," [says ForeclosureRadar's Sean O'Toole].
...
A recent NAR survey found 20 percent of buyers are investors, but Stockton-area real estate agents put the investor share at one-third or more...The pricing floor provided by these investors, however, has broken through several times when the number of new listings exceeded the ability of investors to absorb them, he [real estate agent Jim Muthart] says.
...
Strong rent prices are key to a good return, and rents have softened recently, says Muthart...[D]on't assume each foreclosure equals a new renter, argues Caroline Latham, CEO of RealFacts, a rental data-tracking firm. Many families who are foreclosed on will move in with another family or move to a cheaper region, not rent. "We are seeing a return to the notions that [investors] had in 2005," warns Ms. Latham, referring to the buying frenzy in the run-up to the housing bubble peak. "They think they'll be able to rent it and come out smelling good."

"Rogues in the Real Estate Industry"

From the Sacramento Bee:

You would think people with mortgage problems have enough trouble. But rogues in real estate always find new ways to inflict more. Last year it was foreclosure rescue schemes that robbed desperate people of their homes. Now, it's loan-modification firms taking cash advances from struggling borrowers and disappearing.

Home Front has heard countless stories from struggling borrowers of phone calls offering to mediate with banks for $2,000 to $4,000 or more. Many are so desperate and confused they pay for what they can do themselves or get for free from nonprofit loan-counseling firms. Some say they have paid their advance fees, then can't reach the firm.

The California Department of Real Estate cites an "explosion" of for-profit loan-modification firms as the foreclosure crisis deepens. Former lenders and real estate agents have retooled, and jumped to the newest way to generate income.
~~~
It's just one more example of rogues in the real estate industry who are always adapting to the newest problems people are having. Honestly, this is an industry that is going to have years of an uphill fight to rebuild trust.

From the Modesto Bee:

Foreclosure filings fell nationwide in November, but they spiked dramatically in the Northern San Joaquin Valley, statistics released today by RealtyTrac show. Lenders repossessed 1,641 homes last month in Stanislaus, San Joaquin and Merced counties, and they warned 2,727 additional homeowners that foreclosure was imminent if they didn't pay up.

From the SF Chronicle:

The recession that has already devastated the Central Valley has started to hurt the Bay Area, causing job losses that will continue through 2009 when the economy should begin a slow and weak recovery, according to a bleak forecast issued today. "There is no suggestion in the data that we are near that bottom," was the somber message of the UCLA Anderson Forecast, a quarterly look at the state economy conducted by the university's business school.
...
"The inland areas have been hardest hit by the housing downturn and are being hardest hit by the pullback of the retail and the wholesale sectors," he [economist Jerry Nickelsburg] said. "Here you're talking about areas of the East Bay and the Central Valley."

From USA Today (hat tip Jeff):

[H]ome values have fallen so sharply since hitting a historic peak in the spring of 2006 that many Americans are wondering how much more prices can sink. As painful as the decline has been, history suggests home values still may have a long way to drop and may take decades to return to the heights of 2½ years ago. "We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff, president of investment firm Euro Pacific Capital of Darien, Conn. "These were lifetime peaks."

The boom in home prices — fueled by heavily leveraged loans built on low or even no down payments — made it easy to forget that housing values had been remarkably stable for a half-century after World War II, rising at roughly the same pace as income and inflation. Prices soared in most of the country — especially in Arizona, California, Florida and Nevada and metro areas of Washington, D.C., and New York — during a brief period of easy lending, especially from 2002 to 2006. That era's over.

"New Year Bodes Ill for the Central Valley" Economy

From the Sacramento Real Estate blog:

Prices have fallen yet again...Sacramento county is now at $122.69 a square foot, a drop of 34.3% over last November...Median price has also fallen for the same period - here we see a fall of 40.3% year over year. Median price last November was $293,000 and is currently $175,000.

From Sacramento-based Foreclosures.com:

The nation's foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the 2009 Outlook from ForeclosureS.com....

"Recovery is underway. Affordable is back in the housing market," says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com. "In 2009, housing will not only recover, but we'll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market. With 4.5% fixed mortgage rates, housing prices lower than they were 'pre-housing bubble', commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009," adds McGee.

From the CVBT:

The New Year bodes ill for the Central Valley as the global recession deepens, says a new economic analysis by the University of the Pacific. “While home prices are beginning to find a bottom and real estate sales have surged with low prices, the outlook for the agriculture industry, trade, transportation and other key service sectors have weakened substantially in the past three months,” says the report written by Jeff Michael, director of the Business Forecasting Center at the Eberhardt School of Business at Pacific in Stockton.

From the Sacramento Bee:

Get ready for two years of 9 percent unemployment. California and Sacramento's jobless rate will top 9 percent sometime early next year and won't fall below it until early 2011, according to an economic forecast released Tuesday by the University of the Pacific. The higher unemployment is the obvious result of a deepening recession as the economy moves well beyond the initial job losses in construction and mortgage lending. "We're out of the housing thing and into a pretty severe … traditional structure of a recession," said Jeff Michael, director of UOP's Business Forecasting Center.
...
Michael said the Sacramento area figures to lose 2 percent of its jobs next year, a significant downturn.

From the Modesto Bee:

In preparation for slower times, Pacific Southwest Container of Modesto has laid off an undisclosed number of employees. The container manufacturer...joins a growing list of San Joaquin Valley companies that have scaled back their staffs to reflect slowing business...[A]s consumer confidence wanes and people buy less, there is less need to make and ship the goods that once flew off store shelves.
...
Initially, the decline in the valley housing market triggered job losses in real estate, finance, construction and other, related industries. As the economy continued to slow, the ripple effect has forced other businesses, including The Bee, to trim workers. Jeff Michael said he isn't surprised to hear of Pacific Southwest Container's layoffs. The director of the University of the Pacific's Business Forecasting Center said it is part of a coming wave in the manufacturing sector. Goods that people can put off buying will take a hit, Michael said.

From the Tracy Post:

As a soft housing market and rising food and fuel costs eat away many folks’ disposable income, the ancient art of bartering has become an increasingly common way to get what one wants.
...
Out-of-work Tracy carpenter Donald LaMmond, 42, can’t afford Christmas presents this year for his two daughters, ages 7 and 11, so he’s trading his handyman skills for board games and dolls to put under the Christmas tree. The contractor and his real estate agent wife, Kimberly LaMmond, 39, represent a pairing of two of the hardest-hit professions in today’s economy — definitely a source of stress for the couple, who sold their home 2½ years ago for much less than the loan that paid for it. "We’re both learning how to update our resumes, to get back out there," he said. "And we’ve applied to McDonald’s and Wal-Mart, but it’s hard to get out there — other people want those jobs now, too."

Another One Bites the Dust

From the Sacramento Bee:

Chicago-based Kimball Homes, a significant home builder in the Sacramento region since 1995, announced Tuesday it will close its business in coming months. The announcement comes eight months after the builder, once among the nation's largest, filed for Chapter 11 bankruptcy...Kimball Hill has projects in Rancho Cordova, Natomas, Elk Grove, Galt and Stockton.

From MarketPlace:

Home prices fell more than 10% in the third quarter in nine central California communities [according to IHS Global Insight]. The Central Valley communities of Merced, Stockton, and Modesto have seen property values fall to less than half their 2005 value. Twenty-nine metro areas in California, Florida, and Nevada -- at one time among the most overvalued -- have seen price declines in excess of 30%.

From the Modesto Bee:

Nearly 33 percent of Stanislaus homes and 40 percent of Merced County homes had their property taxes lowered this year because of value declines...Next year assessments will drop again, providing perhaps half of all Stanislaus homeowners a tax cut, said county assessor Doug Harms. He said next year he likely will review assessments for all homes purchased since 1990, which is when prices peaked before the last big housing market slump.
...
Despite the high cost [in penalties], last year 8.6 percent of Stanislaus County's property taxes -- around $36 million -- were delinquent. Ford said that was the highest rate on record, though he doesn't have statistics from the Great Depression.

Over 10,000 Jobs Lost in Sacramento Region, Unemployment Jumps to 7.9%

From the Sacramento Business Journal:

California and the Sacramento region’s jobless rates both increased a half-percentage point, reaching the highest levels since 1994....The Sacramento area’s jobless rate increased to 7.9 percent, from 7.4 perent in September and 5.5 percent a year ago, according to the state report.

From the Sacramento Bee:

[T]he Sacramento region has lost 10,200 jobs in a year, a 1.1 percent decline. The state has lost 101,300 jobs in a year, a 0.7 percent drop.

Interactive Map: Unemployment by County

From News10:

Stacy Brown of Sacramento hasn't missed any [house] payments, but said she's worried about the months ahead. "Our hours are being cut due to the budget, so I see my salary decreasing so I just want to try to keep ahead of the game," she said. She was among dozens waiting up to three hours to meet with their lenders.

From News10:

Mike Lyon of TrendGraphix said to get ready for another 10 percent price drop over the next four months. It could very well dip to 2001 pricing, he said.
...
Lyon predicted the median home price will bounce above $200,000 in the coming months but says that won't be because home prices are increasing. Instead, he expects foreclosures on larger move-up homes to increase, especially in newer subdivisions in the foothills. He believes those homes will have foreclosure pricing in the $300,000 range and up, thereby increasing the median price of homes in the area.

From the News-Review:

Ray Davis won’t ever refute a moniker bestowed upon him — “the eternal optimist” — because the chief executive officer of Umpqua Bank sees signs of financial recovery, even in these troubled economic times. Take the housing market in Sacramento, Calif., for example, where the average selling time for a home went from 18 months in September 2007 to now less than five months, Davis said...“People are bidding on foreclosures which says we’re hitting bottom in Sacramento,” he said....

From the Sacramento Bee:

Bank repossessions again accounted for the majority of home purchases, especially in Sacramento County, the largest sector of the region's real estate market. DataQuick said two-thirds of the county's sales involved bank repos. "The bad news is there's a lot of foreclosures in the market. The good news is they're selling," said Pat Shea, Sacramento regional manager for Prudential California Realty. "Teachers, policemen, nurses – they can all buy houses now."

Interactive Map: Sacramento Home Price Trends By Community

From the Appeal Democrat:

Yuba County's $175,000 median price in October was 34.5 percent below a year ago, MDA DataQuick reported Thursday...Median prices in the county have fallen 50.2 percent since their November 2005 high of $351,500...Sutter County's October median price was $183,000, down 29.7 percent from the same time last year....Median home prices are now 46 percent below their December 2005 peak of $339,000.

From the Modesto Bee:

Stanislaus County homes sold for a median $161,500 last month....Home prices have dropped a staggering 59.2 percent below the $396,000 peak hit in December 2005...Merced County is even worse. Median-priced homes there sold for $136,750 last month....Merced prices have plunged 64.3 percent since peaking at $382,750 in December 2005...San Joaquin County home values...are 55.7 percent below their November 2005 peak of $451,500.

"It's impossible to say when the bottom will hit," said John Knight, professor of finance and real estate at the University of the Pacific. "I never anticipated such a huge drop in housing prices so quickly."
...
[F]or "prudent consumers who waited to buy," [basically ignoring everything the UOP folks have said for the last three years] Knight said, "there are some tremendous opportunities now. Prices really cannot go much lower ... because it's becoming less expensive to own than to rent. That provides kind of a floor to housing prices."

"Great news: Home prices have fallen!"

From Fortune:

With declines of 30% or more California markets like Sacramento and San Bernadino, home prices and rents in those areas are approaching equilibrium, according to Deutsche Bank analyst Lou Taylor, who compiles a valuable quarterly survey housing costs in 55 urban markets.

As home prices continue to fall, Taylor predicts that dozens of grim markets could reach equilibrium by year end. "We're getting back the affordability levels of 1999, before the bubble began," says Taylor.

From the Modesto Bee:

Great news: Home prices have fallen! At least that's great news for people buying homes. New statistics show home affordability has soared in the Northern San Joaquin Valley as plummeting prices enable more families to attain the American dream...The National Association of Home Builders/Wells Fargo Housing Opportunity Index calculates that nearly 60 percent of homes sold in the region during July, August and September were affordable to local median-income families.
...
The affordability index, however, is only as good as the data it's based on, and some question whether the income statistics used are current. The index, for instance, calculates that the median- income Stanislaus family earns $56,500 per year. But many workers in the region have lost jobs this year, and unemployment is rising. "Income numbers often lag," cautioned Dr. Stephen Endsley, a Modesto real estate investor. "It may look like we have housing affordability, but do we really consider unemployment? First-time buyers have to have confidence before they go out and buy, but many of them have questions about (the stability of) their employment."

From the Stockton Record:

The City Council on Tuesday approved The Grupe Co.'s $3 billion plan to build 7,000 homes in a massive subdivision on a Delta island on the city's northwest side.
...
Two people spoke against the proposal Tuesday, saying the city is unwise to expand into the Delta and to approve vast housing plans while Stockton is in a foreclosure crisis. "It cannot help but further depress the housing market," said one of the speakers, Ann Chargin.

From the SF Chronicle:

Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties. According to public records from eight counties in three states, Wu and his wife own at least 19 homes and vacant lots worth more than $2.4 million...Records show that Wu and his wife, Jie Zheng Wu, went on a property-buying spree starting in 2004...In California, they bought a modest home in Elk Grove (Sacramento County)....

[A]uthorities said they are looking into whether Wu's financial situation had been affected by his foray into real estate before the nation's foreclosure crisis.

Blog commenters eat real estate "experts"

Calling Market Bottom (Again)

From the Sacramento Bee:

"Sacramento is well into the first phase of the housing stabilization process, which starts with sales recovering on a year-over-year basis," [DataQuick's Andrew LePage] said.
...
Discounted foreclosures were 65.8 percent of September sales in Sacramento County, according to MDA DataQuick. Foreclosures were half of sales in the Los Angeles region and 42 percent of those in the Bay Area during September, the firm said.

DataQuick sales/price stats by county
ADDED: by zip [pdf]

From the Appeal Democrat:

Local median prices were down last month compared with September 2007, declining 31.5 percent in Sutter County, and 36.8 percent in Yuba County. Both counties were well under the $200,000 mark — the only counties in the Sacramento region in that range — coming in at $190,000 in Sutter County and $175,000 in Yuba County.

From the Modesto Bee:

The clearance sale in real estate continued last month, with another jump in the number of homes sold and a continuing drop in prices. Stanislaus County's median sale price was $179,000 in September, down 40 percent from a year earlier, MDA DataQuick reported Tuesday...In Merced and San Joaquin counties, the number of sales also soared last month compared with a year earlier. Each had a 47 percent drop in the median price, to $140,000 in Merced and $191,500 in San Joaquin.
...
Craig Lewis, president and chief executive officer at Prudential California Realty in Modesto, said the foreclosure wave appears to be waning. He said prices could bottom out in three or four months. "The next 90 days is the best time to buy in the last 10 years," he said.

Bottom out in three of four months? How can that be when prices bottomed out back in June 2007?

Craig Lewis, president of Prudential California Realty...said [Stanislaus County] median home prices have fallen from $414,000 in 2005 to $359,000 now, and it takes nearly three months to sell the typical home. "First-time home buyers have the ability to buy now, but … they're sitting back and waiting because they think the price will go down more," Lewis said. He doesn't agree. "I certainly feel we're at the bottom of the market."

From CNBC:

[What] strikes me is the positively bewildered expressions on the faces of the chief economists of both associations. These poor guys are tasked with telling everyone when its all going to get better, and the fact of the matter is they just don't know. Don't get me wrong, these are supersmart guys, number crunchers with decades in the business, but as NAHBs David Seiders said, the risk in housing right now is just so high that it makes forecasting extremely difficult.

From the Wall Street Journal:

[Bill] Knoff's house has traveled the arc of the local market. Built on vacant land in 2002, it sold for $280,000. Its original owner unsuccessfully tried to sell it in 2006 for $450,000. Mr. Knoff bought it out of foreclosure in March of this year for $320,000. Today, based on local sales, he figures the house is worth about $220,000. Mr. Knoff paid nearly half of the purchase price in cash, so most of his equity has been wiped out. But he said he believes in taking responsibility for such choices. "The government can buy up troubled mortgages. But it should kick the people out of their houses," said the 61-year-old information technology manager. "Why should I pay for someone to buy their house?"
...
[T]he bottom still may not be in sight. Home prices in California could end down as much as 60% from peak values, according to recent research from both Barclay's PLC and J.P. Morgan Chase & Co. Towns like Los Banos may have further to fall. According to the city and a local title office, roughly 2,000 of 10,000 homes in the town are in the foreclosure process. The city expects that number could grow before the crisis passes.

Interactive map thingy

From the Sacramento Bee:

Ward Smith of J. Smith & Sons Inc., a home-entertainment business in Natomas, said business already was slow because of the soft housing market. Then, when the stock market faltered, things came to a near complete halt. "The phones became eerily quiet for no good reason," he said. "Well, maybe there is a good reason. Everyone's (saying), 'We'll wait and see until we know what's really going on.' "
...
Prominent real estate broker Mike Lyon also knows what it's like when the phones stop ringing. The president of Lyon & Associates said things got very quiet when the stock market went into its downward spiral. "It was kind of like 9/11, to be honest with you," he said.

From the Sacramento Bee:

[CEO Gary] Pruitt said skeptics wrongly assume the vast majority of McClatchy's decline in revenue is due to a permanent migration of business to the Internet. Instead, he said, most of the problem is due to the economic downturn. McClatchy will "return to revenue growth when the economy resumes growing," he said. As evidence, he noted that McClatchy's biggest problems in the past two years have emerged in California and Florida, where the real estate market has crashed the loudest. But now McClatchy's papers in the Carolinas are experiencing somewhat similar declines as economic woes have spread to those states, he said.

DataQuick: Repo Sales Soar, Prices Plummet

From the Sacramento Bee:

Still-falling sales prices and a rush to buy discounted bank repos pushed Sacramento home sales still higher in September, reaching their greatest levels since June 2006, property researcher MDA DataQuick reported today. But analysts have their eyes on next month, wondering if fresh public fears of an economic slowdown might have caused some buyers to pull back.
...
Sacramento County's $201,00 median September sales price for new and existing homes combined is 34.4 percent below the same time last year, and 48 percent below its 2005 peak of $387,000. Sales were up 126.4 percent from the same time last year.

From the Sacramento Business Journal:

Home sales are up dramatically over last year because of fire-sale prices on foreclosed homes. But the foreclosure rate itself shows no sign of slowing. Mortgage-loan delinquency in the city of Sacramento, for example has risen from 0.82 percent in mid-2006 to 5.48 percent now, according to credit information company TransUnion.

From the Manteca Bulletin:

Three years ago not a single existing home that closed escrow in Manteca sold for under $320,000 in October. This October it is a drastically different story. Of the last 43 homes to close escrow through Tuesday in Manteca all but three ended up changing hands for less than $320,000.

From the Sacramento Bee:

Sacramento's share of the $3.92 billion national [bailout] pie is larger than that of 20 states, according to the Sacramento Housing and Redevelopment Agency...About 40 percent of the money will be used by SHRA to buy houses, fix them up and sell them to new buyers."The city and county are becoming (real estate) flippers," said Sacramento Mayor Heather Fargo....

...$32 million won't go very far, said Cindy Cavanaugh, assistant director of housing policy for SHRA. She said the money will likely be enough to fix up and sell 234 houses in the county and 178 in the city.

Flippers.gov

From the Sacramento Bee:

The federal government soon will send Sacramento city and county nearly $32 million to help fix up foreclosed properties -- a tool to prevent deterioration in neighborhoods hard hit by the housing crisis. Sacramento received one of the largest allocations in the nation....

City and county officials today detailed a plan that includes paying developers to buy foreclosed properties, restore them and either rent or sell them. In an effort to spend the money more quickly, the county and city also would become real estate flippers. About 40 percent of the money would be used by SHRA [Sacramento Housing and Redevelopment Agency] to buy and restore properties then sell them directly to buyers.

From the Sacramento Bee:

The supply of competing single-family house rentals is still growing, says Janet Regan, a broker with Citrus Heights-based Horizon Properties, who manages 450 rental homes for clients. Investors are buying bank repos and renting them out, she says. Homeowners who left the region but can't sell their homes are renting theirs, too. "They don't have them on the market because the market is horrendous," Regan says.

From the Modesto Bee:

Apartments, of course, aren't the only rental option for Modesto families these days. There are thousands of rental houses in the city, and their numbers are increasing daily as investors scoop up bargain-priced foreclosed properties. "We have a flood of investment homes on the rental market now," said [Debra] Clover, whose company manages more than 300 of them.
...
Many of the families who had been living in those [foreclosed] homes have left the county, Clover said. "When these people -- especially those who were commuting to the Bay Area -- lose their houses, they don't stay here to rent. They move closer to their jobs," Clover said.

From the Stockton Record:

Hank Klor, a Stockton-based tax and financial adviser, spoke to a 49-year-old single mother who owes nearly $250,000 on two mortgage loans, recently had her income drop by a third and can't make her paycheck stretch over all the necessities anymore. With her home worth only $140,000 to $150,000 because of falling prices, refinancing seems impossible. She might seek to have her loans modified, get the lender to agree take a loss on a short sale or, Klor said he told her, "You need to look at the possibility you may have to walk away from your home."

From the Sacramento Business Journal:

Year-over-year, the capital region lost an estimated 9,800 jobs, or 1.1 percent of the total. There were 3,700 fewer construction jobs; 3,700 fewer retail trade jobs; 2,900 fewer leisure and hospitality jobs; 2,200 fewer financial jobs; 1,300 fewer government jobs and 1,000 fewer manufacturing jobs than in September 2007, when the local jobless rate was 5.4 percent.

From the Stockton Record:

Hayward-based department store chain Mervyns LLC is expected to announce today that it is filing for Chapter 7 bankruptcy protection, a move that means shutting the doors of its 175 retail outlets, including two in San Joaquin County.
~~~
[N]ine are in the greater Sacramento area....

'You have a lot of sellers waiting for a healthier market'

From the Sacramento Bee (updated link):

Sacramento-area unemployment went up two-tenths of a point, to 7.4 percent, largely due to a massive decline in state government jobs. Unemployment hasn't been this high in Sacramento since January 1996.

From the Sacramento Business Journal:

The metro area lost more than 4,000 government jobs from the previous month, and others sectors lost jobs that typically grow during August, the latest data from the Employment Development Department showed Friday. The Sacramento region fell to an estimated 903,800 wage and salary jobs, down 4,500 in a month and 9,900 from August 2007.

From the Sacramento Bee:

"I've never seen anything as concerning as this," said George Hudak, a 74-year-old retiree in El Dorado Hills. "I don't know whether it's a self-fulfilling prophecy or what, and I think a good deal of the panic out there is a result of what's being publicized on TV and in print. "It just seems that since the housing market started going to hell, everything I read every day in the business section of the Sacramento Bee was bad stuff. And I don't know how much of that resulted in things getting worse."
...
Russ Fehr, Sacramento's city treasurer, said news is bad in just about every aspect of municipal finance -- from revenue generation to funding projects to investments. "I'm afraid, I truly am," Fehr said. "It wakes me up at four in the morning."

From the Sacramento Bee:

Today, there are almost 5,000 fewer homes for sale [on the MLS] than in August 2007. That's when the region set its newest inventory record of 16,262 for-sale signs. Analysts say it's not just sales that have done the trimming. It's the determination of sellers to wait out this market. "To me that speaks of the number of people who don't want to compete with foreclosures," said Andrew LePage, analyst with MDA DataQuick. "You have a lot of sellers waiting for a healthier market, hoping for one in the not-too-distant future," he said.

Last year, real estate agents feared inventory might reach a disastrous 25,000 this year. They got lucky so far instead.

Or maybe not.

From the Sacramento Bee:

Investors again made a big splash in the market. One in five escrows closing last month in Sacramento County were by investors, said Andrew LePage, an MDA DataQuick analyst.

Prices/Sales by County

From the Modesto Bee:

Merced County homes sold for a median $150,000 in August. That's down 47 percent in one year and 60.8 percent from the December 2005 peak...Stanislaus County median sales prices fell to $185,000 in August. That's a one-year drop of 41.3 percent. Even more depressing, it's 53.3 percent below what homes were selling for at the building boom's December 2005 peak...San Joaquin homes sold for a median $207,000 in August. That's down 44.1 percent in one year and 54.8 percent from the November 2005 peak.

From the Appeal Democrat:

Figures released Thursday by MDA DataQuick showed median price declines of more than 30 percent for homes in Yuba and Sutter counties for August compared with August 2007. Sutter County's home price dipped below $200,000 to a median $190,000 last month — well below the $275,000 figure reported for August 2007. MDA DataQuick figures showed homes in Yuba County dropped to $178,000 in August. That's down from $274,000 for August 2007.

From the Sacramento Bee:

The turmoil washing over Wall Street has created waves that reach all the way to Sacramento's locally owned banks and credit unions. Money flowing into conservative havens favored by smaller players has cheapened the value of investments such as government-backed securities. Commercial real estate loans are losing value. Credit remains tight. "All banks are struggling to some extent with credit issues," said Anker Christensen, chief financial officer of Sacramento-based River City Bank. "No one is untouched."

Still, bank executives and finance experts agree that smaller players are generally in better shape than big banks right now...[O]fficials with River City and El Dorado Savings said that they've seen an uptick in new accounts recently, although they wouldn't disclose details. Both attribute the business to disenchantment with their bigger rivals.

From the Sun Post:

A six-story office complex and bank headquarters that was supposed to dominate Manteca’s skyline has been set back at least two years due to troubles in the real estate market and financial industry. The Oak Valley Community Bank has decided to pause construction on its 96-foot-tall office building at 1455 Moffat Blvd. until the local real estate market picks up, the bank’s Executive Vice President Rick McCarty said this week.

From the New York Times:

Many Americans are discovering an unfortunate twist to the housing crisis: even after selling a home and moving away, they might have to keep paying on it for years, even decades.
...
[B]anks are agreeing to let some short sales go through. But instead of writing off the unpaid portion of the debt, they want homeowners to sign a note promising to pay some or all of the balance due. This was the situation confronting Mike and Linda Kelly, who needed to sell their house in the foreclosure-plagued Central Valley of California when Mr. Kelly got a new job 75 miles away.

The Kellys owe $300,000 on their house...but the best offer they could get gave the bank $220,000. CitiMortgage said it would approve a sale at that price, but at the last minute told the Kellys they needed to pay $166 a month for the next 20 years, a total of $40,000. “When you are ready to participate in the loss, feel free to call me,” a Citi loss mitigation specialist, April Easter, wrote to them in an e-mail message.

'If you make $2,500 a month, you certainly should be out there looking to buy a home'

From the San Diego Union-Tribune:

Consumer belt-tightening has led some diners to curtail their visits to fancier eateries, providing a new stream of clients for Rubio's, [president Dan] Pittard said.
...
In addition, Rubio's has been finding its own islands in the storm, opening stores in metropolitan areas that have been hit hard by the mortgage crisis, such as Sacramento.

But one of Rubio's best-performing new restaurants is in Rancho Cordova, a well-to-do Sacramento suburb that has so far avoided being dragged down by the wave of foreclosures and unemployment.

“Even in metropolitan areas that have been adversely affected by the subprime crisis, some trade areas are just fine,” Pittard said. In other words, there are some islands out there. All you have to do is look for them.

From the Sacramento Bee:

As the economic downturn deepens in Sacramento, three more area employers have instituted layoffs in recent weeks. The cutbacks are all in Rancho Cordova – at Aerojet, Wachovia Bank and failed mortgage lender IndyMac Bank – and affect 247 workers in total, putting further pressure on the metro area's economy.

From InsideBayArea.com:

San Joaquin County set a record with 18,158 defaulted tax bills, reaching an 8.5 percent delinquency rate.

From the Modesto Bee:

"Qualifying for loans has never been tougher," said Paul Carroll, owner of Carrollton Mortgage Co. in Modesto. "We have to prove everything now." Lenders no longer approve "no documentation" loans, which were common a few years ago. Now borrowers must demonstrate they can afford loan payments, verify their income and have decent credit scores.

For those who qualify, Carroll said home prices are cheap and mortgage rates are low: "If you make $2,500 a month, you certainly should be out there looking to buy a home."

Many investors are doing just that, and their loan rates also have dropped about half a percent since last week. "I'm setting up investor pools to buy a lot of houses, and I mean a lot of houses," said Mike Zagaris, president of PMZ Real Estate in Modesto.

'More Than a Rough Patch'

From the Sacramento Bee:

New data show Sacramento homeowners continue to take a big hit as the nation's foreclosure crisis churns through a second difficult summer. One of every 145 households in Sacramento, El Dorado and Placer counties faced foreclosure in July – 5,290 properties – according to Realtytrac, Inc. data service, saddling Sacramento with the 11th worst foreclosure rate in the country.
...
All this, along with sinking home values and a bad economy, has Sacramento resident Leovardo Lopez, a pool builder, on edge this weekend. The 42-year-old Lopez's work hours recently were slashed. He was lucky; most of his co-workers have been laid off, but he fears he will not have a big enough salary next month to make his mortgage payment. Worse, the home he bought in 2005 is worth $150,000 less than he paid.

From the Modesto Bee:

"I'm looking for anything. I just need to make a living," said [Jerry King] the former Beck Properties home warranty representative..."First, I was looking for the same pay. Now, I'm looking for anything. I just need to make a living."
...
Despite increased worker productivity since the 2001 recession, workers' wealth has not increased, Berkeley economist Sylvia Allegretto said. But they are feeling the economic bust..."The labor market has hit more than a rough patch as job loss has occurred in each month of this year," Allegretto said.

From the Modesto Bee:

As the economy shrinks, enrollment at community colleges is expanding. Modesto Junior College's enrollment ballooned almost 4 percent over last year to 18,474 students.
...
"They're living in a different day and time financially. I don't think I've ever talked to so many people who have lost everything," [MJC counselor Kim] Bailey said. The Northern San Joaquin Valley's jobless rate hit 11.3 percent in July. At the same time, the region lost 3,000 homes to foreclosure. Economists say the housing market collapse is having ripple effects on the economy and forcing layoffs.

From the Stockton Record:

[Joe] Anfuso said Florsheim has sold houses in the past two months to perhaps four or five buyers who decided to buy new after finding the foreclosure market more difficult than they expected or discovering that the homes were "more challenging" than they expected. "The competition (for foreclosures) is fierce," he said. "You have people who have bid five, 10, 15 times and are getting beat out. They start asking, 'Is it really worth it?' Our agents are fielding a lot of questions from people who are looking at that market and don't like that process."

Greg Paquin, president of the Gregory Group, a real-estate information and consulting service in Folsom, said builders can be competitively priced against foreclosures, but most people don't seem to realize that yet.

From the Sacramento Business Journal:

Salt Lake City-based Woodside Homes, the Sacramento region’s 15th largest builder in 2008 based on sales volume, has announced it will file for Chapter 11 bankruptcy reorganization by Sept. 16, Big Builder Magazine reported Thursday.

From the Modesto Bee:

[Patty] Amador, whose 20-year-old Modesto mortgage company is among the region's largest, will share her concerns about recent changes Congress made to mortgage finance requirements. She said the valley's large number of foreclosures have lowered home prices, which has enabled sales to "bounce back" because first-time home buyers now can afford homes.

"Many of these buyers have the ability to qualify for loans and make payments on safe, fixed-rate mortgages. Unfortunately, few have the funds necessary for the down payment or closing costs," Amador said. "Recent legislation has not only eliminated a widely used financing tool, known as Nehemiah, but will also increase the amount of required down payment along with the monthly payment as a result of increase mortgage insurance requirements."
...
Many first-time buyers...depend on down payment help to become homeowners, Amador said. "Now is not the time to be taking away financing tools, nor increasing costs to borrowers, if we are going to come out of this 'crisis' anytime soon," Amador said. "If we back financing tools with prudent underwriting, we can bring this market back without the risk of a reoccurrence of bad loans to the wrong borrowers."

50% Off Peak For Stockton & Modesto Metros; Merced Down Nearly 60%

From the Modesto Bee:

This spring, median-income families could afford about half the homes sold in Stanislaus, Merced and San Joaquin counties. Compare that with three years ago, when the region's families could afford only about 3 percent of the homes sold. That's the upside of the housing downturn.

The downside is that home prices keep declining: July's median sales price plummeted to $190,000 in Stanislaus County. That's less than half what houses were selling for in December 2005, when prices peaked at $396,000.
...
San Joaquin's median sales price fell to $220,500 in July [down 51.2% from the $451,500 peak]. Merced's median fell to $155,000 [down -59.5% from the $382,750 peak].

From the Sacramento Business Journal:

The sharp fall in median home price in Greater Sacramento has helped drive up affordability....About 55.7 percent of all homes for sale in the four-county metro area were priced so that a family making the median income in the region could afford them, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. That was the highest affordability rating among any California market in the study, and was even better than the U.S. figure of 55 percent for the second quarter of 2008.

From the Appeal Democrat:

In Yuba County, sales in July climbed 43.3 percent above a year earlier. The $183,500 median price was down 33 percent from the same period last year. In Sutter County, sales jumped almost 26 percent while prices were off 30 percent from July 2007, at $203,000.

From the Sacramento Bee:

The cosmetic surgery industry is in need of a lift. Soaring unemployment, high gas prices and the mortgage crisis have left consumers with less discretionary income. For plastic surgeons, that means fewer patients are coming in for elective procedures.
...
"Now financing (companies) are becoming more difficult in who they approve," said [Dr. Shahriar] Mabourakh [of the Folsom Plastic Surgery & Laser Center]. The Folsom doctor started seeing a decrease in calls from prospective patients in December.

The Scarlet Letter

From the Sacramento Bee:

To some analysts, the region's rising sales – mirroring those elsewhere in inland California – suggested a path toward stability that could set in next year.
...
"I think in the Central Valley we're getting closer to the bottom. I still think it's going to be 2009," added Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate in Los Angeles. "But I think prices are bottoming out in Sacramento, the Inland Empire and some areas around Fresno."

Caution abounds, however. Much rides on unemployment, which is rising in California, availability of credit, resets on a new wave of troubled loans and the pending loss of down payment assistance gift programs, analysts said.

DataQuick data via Home Front:
-By County [doc]
-By Zip [xls]

From the Sacramento Business Journal:

The price-per-square-foot of the average house in Sacramento County dropped to $141 and to $191 in El Dorado County, representing an overall regional decline of 33 percent from a year ago, according to Trendgraphix Inc., a real estate data tracking firm connected with Lyon Real Estate. Michael Lyon, CEO of Lyon Real Estate said bank-owned properties make up 63 percent of all sales and the inventory of those properties inventory continues to grow.

From the Sacramento Bee:

The housing market has collapsed. Growth pressures? Poof! Yet Elk Grove – or at least a large number of its council members – still continues the curious push to balloon the city's boundaries. Elk Grove is seeking to expand its "sphere of influence" over 10,536 acres south of the city, including parts of the Deer Creek and Cosumnes River floodplains.
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Why this push? Why now? It's hard to say. There's no immediate need for Elk Grove to add rooftops. The city has scores of empty houses. What Elk Grove needs is new jobs, centrally located, so the city can evolve into a real city.

From the Modesto Bee:

The Modesto Bee offered buyouts Monday to all its full-time employees. The announcement comes four days after The McClatchy Company, which owns The Bee and 29 other daily newspapers, announced a companywide one-year wage freeze. "Unfortunately, the economy continues to worsen, and we must reduce expenses further," Publisher Margaret Randazzo said in an e-mail to employees. This is the second buyout The Bee has offered employees this year.
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These actions follow last month's announcement that The Bee will cease printing in Modesto...That change will cost 33 full-time employees and 127 part-time employees their jobs.

A bit of déjà vu courtesy of InsideBayArea.com:

As the mortgage meltdown forces more homes into foreclosure in the Bay Area, some of these properties are being picked up by investors who are putting them back into the rental market...[A]s investors buy foreclosed homes and rent them out, the number of available rental properties is likely to increase, which could lead to lower rents down the road, observers say.
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"We are starting to see a trend. Investors are picking up the homes and turning them into the rental market right away. ... We have not seen the foreclosures drive up rents anywhere right now" [said Eric Weigers, deputy director of the California Apartment Association.]...Foreclosure activity involving investors who are turning the homes they buy into rentals is indeed increasing the rental stock, said Steve Edrington, executive director of the state Apartment Association's northern Alameda County chapter..."I think we are in this transitional point where rents are going to slow down and sales of houses are going to pick up a bit because there is less inventory out there," he said. "The (foreclosed) homes are being bought and rented out and not being sold for owner-occupancy."

From the Stockton Record:

Stockton City Council tonight will consider an ordinance that will require vacant homes and other empty buildings to be posted with 24-hour contact information for the owner or local property manager on a street-facing, weather resistant, 4” x 6” sign. “Stockton has become a center for the foreclosure crisis,” says City Manager Gordon Palmer. “Our code enforcement officers have had a significant increase in the number of cases they are handling. This ordinance will help us quickly determine who the property owner or manager is and work with them to resolve problems and concerns before they deteriorate.”