Monday, May 14, 2007

Elk Grove - 1 Year Later

I started tracking Elk Grove stats about the same time we sold our house there in May of 2006. I've put together some numbers that look at the big picture for the last year. I could go on and on, but I'll let the numbers do the talking...

50 comments :

Sold in '05 said...

Is this showing that Year Over Year sales numbers are now increasing? How do they compare with '05 sales? Are the higher sales numbers just reflective of higher inventory?

Who wants to call the bottom? ;)

Sold in '05

AgentBubble said...

Sales numbers increased in 1 of the 3 price categories. However, the most interesting point is that the price per square foot has dropped in every category.

Sippn said...

Looks like a little thaw.

Nice to see a market respond to prices dispite the reduced amount of loans available.

Real said...

However, the most interesting point is that the price per square foot has dropped in every category.

Price/ft^2 did drop across all categories (for sold). Looking at the data, the absolute numbers would be

$300-400K: -19.7%
$400-500K: -17.4%
$500-600K: -2.3%

However, all of the new homes have larger average square footage and as we know, smaller homes sell at a premium per ft^2 to larger homes. Adjusting for this using 2005 data, I get the below 'deflators' to make 2007/2006 apples to apples on a FT^2 basis

Numbers represent $'s/ft^2 discount over the stated size

1365ft^2 homes: -$0.065/ft^2
2000ft^2+ homes: -$0.024/ft^2

Adjusting the numbers for the larger size, I get the following apples to apples comparison for price/ft^2 drops YoY:

$300-400K: -14.7%
$400-500K: -13.2%
$500-600K: 0.0%

So, basically, the high end was unchanged with pain being felt in the lower price ranges, although to a lesser degree than on an absolute basis. What is not accounted for is the 'quality' of the homes including builder/owner upgrades and maintanence. I know that if I was a distressed seller, I would not sink a dime into the home and probably would skip normal maintanence as well....

AgentBubble said...

You should consider a job as spokesperson for NAR :-)

I was hoping the focus wouldn't be on the sold propeties, but more on the available properties. I wanted to show folks how each size range has changed over the course of a year. I think we can agree all of the sold stats, especially the 500-600K range, are useless since we're talking about 28 sales for 2006 and 10 sales for 2007.

If you were a buyer last year, you now can shop for nearly 300 sq ft more for the same price range in all 3 price ranges.

Since you want to compare apples to apples as you say, let's compare the first 5 months of 2006 to 2007 for EG. These are only sold stats too.

<1500 Sq Ft

2006
# Sales - 217
Avg $/SF - 279
Avg Sales Price - 357,669
Avg Sq Ft - 1291

2007
# Sales - 158
Avg $/SF - 257
Avg Sales Price - 320,575
Avg Sq Ft - 1259

1500 - 1999 Sq Ft

2006
# Sales - 224
Avg $/SF - 242
Avg Sales Price - 417,960
Avg Sq Ft - 1731

2007
# Sales - 174
Avg $/SF - 219
Avg Sales Price - 375,739
Avg Sq Ft - 1719

2000 - 2499 Sq Ft

2006
# Sales - 175
Avg $/SF - 220
Avg Sales Price - 485,848
Avg Sq Ft - 2213

2007
# Sales - 131
Avg $/SF - 200
Avg Sales Price - 444,079
Avg Sq Ft - 2220

2500 - 2999 Sq Ft

2006
# Sales - 95
Avg $/SF - 207
Avg Sales Price - 561,203
Avg Sq Ft - 2719

2007
# Sales - 71
Avg $/SF - 186
Avg Sales Price - 508,843
Avg Sq Ft - 2725

No matter how you slice this, you're getting more home for less money a year later. I guess the saying "It's a great time to buy" should have some footnotes attached...

Sippn said...

My mistake, reading DOM thinking thats sold stats.

Only better sales in lowest price range. ouch. More pain to go in EG.

Perfect Storm said...

Elk Grove is going down another 20% by the end of 2007.

AgentBubble said...

Lots more pain Sippin....Elk Grove seems like the dead zone right now. Any other guesses for similar price drops? I'm thinking Natomas and the Annatolia area in Rancho Cordova.

Patient Renter said...

"You should consider a job as spokesperson for NAR :-)"

That's what I was thinking. He'd make Lereah look like a saint.

Gwynster said...

Any chance we'll see Woodland or West Sac go the way of Elk Grove? It seemed like there was good downward momentum for a while but it slowed down.

maybe it's just spring wishing.

Perfect Storm said...

Any chance we'll see Woodland or West Sac go the way of Elk Grove?

I have no doubt in my mind, both these areas will be getting nailed. Were in a slow motion housing implosion, give it time, we have all the elements in place. Just waiting for the recession to hit and all hell to break loose.

AgentBubble said...

"Any chance we'll see Woodland or West Sac go the way of Elk Grove?"

I'll work up those numbers for you and post them here shortly.

Gwynster said...

Thanks AB!

Can you tell I've given up on Davis?

The other thing that is killing me is that there is a short sale or foreclosure around the corner from me though I don't see it on the MLS. It's the 600 block of K street.

We're also seeing quite a few homes that are just vacant! No signs, nada. There could be a shadow market here and I just haven't found the listings.

I checked the HUD listings and there was nothing for CA and yet Durham NC had pages and pages. Now people are leaving here (either relocating or dieing) for NC and yet we have no HUD and they have 40?

"Something is rotten in the city of Davis."

AgentBubble said...

gwynster,

Don't blame you for giving up on Davis...lol.

I looked at the West Sac stats, and even comparing the first 5 months of 05 vs. 07 just didn't give me enough data to make a compelling argument one way or another. Woodland is really the same way unfortunately. Just not enough data to really support any findings. Here are the sales stats for Woodland:

01/01/05 - 05/15/05
Total Sales - 233

01/01/07 - 05/15/07
Total Sales - 109

I'm not real familiar with Woodland, so maybe I'm missing a zip code or something. I used 95695 and 95776.

Sorry I couldn't provide you with more info.

Patient Renter said...

agentbubble: Did that auctioned house in Folsom close yet (the one where they would accept top 4 bids over 350, etc.)? I can't find the address.

AgentBubble said...

patient renter,

I can't find it either! I searched through this forum and Sac Landing, but can't find any mention of it. I know we talked about it, but I just can't figure out where the discussion is....If anyone else finds it, please let us know. I'm interested in finding out too. Thanks.

buying time said...

PR -

Last week during my screen scrape 1053 Smith Way Folsom was still pending.

Real said...

You should consider a job as spokesperson for NAR :-)

That seems like a very odd statement to make. I posted:

price/ft^2 drops YoY:

$300-400K: -14.7%
$400-500K: -13.2%
$500-600K: 0.0%

your numbers were:

<1500 ft^2 = -7.9%
1500 - 1999 ft^2 = -9.5%

....so, your numbers actually show less of a decline than my numbers but yet somehow I am 'spinning' so I should work for the NAR? All I do is post data using correct math - no spin involved. Sometimes, I really do wonder how far the US has fallen behind in Math and Science....

AgentBubble said...

Not all real estate agents simply attended 3 classes and obtained a license. Some actually went to college. Imagine that.

I've never directed a condescending tone your way, and would appreciate the same courtesy.
I actually wasn't criticizing you or your numbers, as the smiley face should have implied.

You interpreted the data a different way that I intended. As I stated, I was merely trying to show that, as a buyer, your options look much different (and better) based on different price ranges. Buyers shop based on price of the house, not on price per square feet. RARELY do they shop on square feet alone. I've never had a client say "I want a house between 2000 and 2200 square feet." It's always "show me what I can buy between 300 and 350K.

My main point is that regardless of price or size, you're getting more house for less dollars a year later. So, the client that wanted a house between 300 and 350K has better options now than a year ago.

Real--Please accept my apology if I offended you by the NAR commnent. It was tongue in cheek and not an insult by any means. You've always contributed solid information on this (and other) blogs, and although I don't necessarily agree with your comments at times, I find them thought provoking. If you'd like to discuss this further offline, please feel free to e-mail me at agentbubble at gmail dot com.

Real said...

Real--Please accept my apology if I offended you by the NAR commnent. It was tongue in cheek and not an insult by any means.

Bubble - I was not offended, I am just an asshole. I would have thought my posting style would have made that abundently clear by now :)

BTW, I agree with your assessment as to how people classify what types of homes they are interested in - it is by price band. However, I believe a large part of their buying decision is based on price/ft^2 and nobody wants to be the guy that offers above comps unless they can convince themselves that the property truly deserves a premium. What I was trying to say in my post (which I did poorly) is to show that there appears to be different trends forming by neighborhood and by pricing band. Subprime really seems to have hit the $200-$300K price band driving up inventory and lower median prices, etc as they are making up a larger share of the total volume. In my opinion, this tends to overstate the weakness of the 'market' as the problem areas are very concentrated (by price and geography). As for the renters looking to buy, I doubt they are looking at this $200-$300K price band and probably not looking at Elk Grove, Oak Park, or Natomas - but they are projecting the trends for those areas onto the market as a whole. As a result, I feel their conclusions about prices falling by 50% so they can buy in Davis or other desireable areas are wrong. You can feel free to disagree - you will be wrong, but that is your right...

AgentBubble said...

As for the renters looking to buy, I doubt they are looking at this $200-$300K price band and probably not looking at Elk Grove, Oak Park, or Natomas - but they are projecting the trends for those areas onto the market as a whole. As a result, I feel their conclusions about prices falling by 50% so they can buy in Davis or other desireable areas are wrong.

We agree on this completely. I'm only using Elk Grove because that's the area I'm most familiar with and one that I feel is tremendously overrated. Prices aren't going to fall 50% anywhere in my opinion. That would go beyond a recession and just ain't gonna happen.

I am interested to see what the lenders come up with to fill in the subprime void. I was talking to a mortgage friend the other day and his boss said he went to a meeting where 100 year mortgages were discussed. Pull up an amortization schedule and tell me the likelihood of that ever happening.

Patient Renter said...

"I am interested to see what the lenders come up with to fill in the subprime void."

The answer might be that there simply is nothing to fill the void. How do you fill the void left by loans that should have never been made?

AgentBubble said...

That's a lot of potential money for the lenders to give up on that easily. When you really look at the difference in payment a 40, 50, or even 100 year loan makes, it's easy to see that extending the mortgage period won't be the answer. Consider P&I on a $400,000 mortgage at 6.25%:

30 - $2,462
40 - $2,270
50 - $2,179
100 - $2,087

Mortgage balance after 10 years:

30 - $336,950.65
40 - $368,831.10
50 - $383,959.82
100 - $399,319.45

Gwynster said...

I looked at the am tables for the 40 and 50 yr and decided they probably wouldn't fly.

What scares me is 40 with a 10 yr teaser. I could just see that if the industry is desparate enough.

Sippn said...

Real - you're laying claim to a title that might be in high demand around here...lol.

Darth Toll said...

"Subprime really seems to have hit the $200-$300K price band driving up inventory and lower median prices, etc as they are making up a larger share of the total volume."

This is the Marie Antoinette defense. You are arguing that weakness in this band is not indicative of market distress as a whole because the people with money are still buying in the more desirable areas. What you are forgetting, of course, is that we are still in the 2nd or 3rd inning of this bust and that there will be a vicious accompanying recession very soon. The signs of a consumer-led recession are already very visible if you know what to look for (retail earnings for example). So, in a perverse way you are right, but for the wrong reasons. Once the recession (depression?) really gets going, $200K will easily get you into one of the fancy neighborhoods that you describe, but the irony is that most people still won’t be able to come up with it and will still be priced out.

Real said...

http://www.sacbee.com/142/story/182858.html

"Yolo County posted a 4.2 percent gain in sales prices, the region's only year-over-year increase.

That reflects price appreciation in Davis, said Mike Lyon, head of Lyon Real Estate. Lyon said Davis and older neighborhoods like Land Park, Curtis Park and McKinley Park have seen prices rise up to 6.7 percent from this time last year.

"I'm putting location, location, location back in my vocabulary,"


Wow - who you have thought this would occur? That guy should win a medal or something....

Real said...

Oh, an one other thing...

http://www.sacrealtor.org/documents/about/statistics/April2007.pdf

Existing Home Listing Inventory

April 2007 - 5,313 (-4.3%)
April 2006 - 5,549

Also, they show a MoM decrease from March. Why is this number so much different than what is shown on this site (+14.5% YoY)? That amounts to a 20% difference in inventory % and I think the number sets tell completely different stories about how the market is shaping up this year. Also, the data by zip code is pretty interesting - mature zips are decreasing in listings by a large % and the newer zips continue to climb (Elk Grove). Pretty much exactly as I saw the market recovering - desireable areas in 2007 and less desireable (meaning market overall) by 2008.

Max said...

Also, they show a MoM decrease from March. Why is this number so much different than what is shown on this site (+14.5% YoY)?

I think you're misreading their stats (which is easy to do, since they're not very clear). From what I can gather, the monthly data does not include total standing inventory.

If you check the "Year to Date" stats, you'll see that our data is a lot closer to SARs. I suspect that they include pending sales in their "Listing Inventory" figure, which is why it's a lot higher.

Max said...

Pretty much exactly as I saw the market recovering - desireable areas in 2007 and less desireable (meaning market overall) by 2008.

I really think the jury is still out. There are just too few listings/closings in these "recovering" zip codes to make the m-o-m data reliable.

Also, I don't see how you can have recovery at the high-end before the low-end recovers.

Real said...

I think you're misreading their stats (which is easy to do, since they're not very clear). From what I can gather, the monthly data does not include total standing inventory.

Max, I am not as concerned with the absolute number for 2007, what I am questioning is the relative number compared to 2006. According to the link, inventory DECREASE YoY, while you are showing a 14.5% INCREASE YoY. Obviously, I am looking for guidance on the inventory problem and when one set of data says it is going up another set of data shows that it is going down YoY, it is hard to make factual arguments when the 'facts' are in flux and disagreement.

Also, I don't see how you can have recovery at the high-end before the low-end recovers.

You can in this case as the 'disappearing' buyers wiped out by subprime are mainly in the lower priced homes ($200 - $300K range). Also, homes that require long commutes get hit by downturns as buyers don't save a much money as before by commuting and their natural preference is to live as close to where they work as possible because very few, if any, people enjoy a 1+ hour commute.

My argument is that the the desireable areas really did not have a significant decrease in price - more of a flattening - as total sales decreased. As there are many less 'motivated' sellers in these neighborhoods, the prices did not need to come down because people were not being forced to sell. Also boosting the prices is the fact that they are not competing with builders as the desireable areas are built out already so there is not a flood of new homes hitting the market down the block from a seller. Given the dynamics of the Sac market over the last 4 years (risky loans, expansion of commuter suburbs), it is not surprising that desireable areas near the city core have stablized and are now increasing in prices - it is the logical outcome. I really don't think anybody would predict Natomas and Oak Park (low end) would be the 1st areas to recover - except maybe Patient Renter with his debunked 'revert to the mean' argument. Desireable areas always rebound first - location, location, location....

AgentBubble said...

"Yolo County posted a 4.2 percent gain in sales prices, the region's only year-over-year increase."

Doesn't take into account condos or new home sales...Add that in and it's actually a 1.7% drop. See the chart here.

Pretty much exactly as I saw the market recovering - desireable areas in 2007 and less desireable (meaning market overall) by 2008.

What are the desireable areas that you are referring to? East Sac, downtown/midtown, Davis? Any others? I'm not asking to be a smartass, I am actually just curious ;-).

AgentBubble said...

Existing Home Listing Inventory

April 2007 - 5,313 (-4.3%)
April 2006 - 5,549


This figure represents the number of houses that were for sale on April 1st and still for sale on April 30. It's sort of a standing inventory. They're actually working on changing the name of that statistic since it's so confusing.

I just did an MLS search for Sac County and West Sac and total inventory is 10,539.

From 4/1/06 - 4/30/06, there were 3,537 listings entered into MLS for Sac County according to my stats and 3,758 entered from 4/1/07 - 4/30/07.

From 4/1/06 - 4/30/06, there were 490 listings entered into MLS for El Dorado County according to my stats and 574 entered from 4/1/07 - 4/30/07.

From 4/1/06 - 4/30/06, there were 340 listings entered into MLS for Yolo County according to my stats and 367 entered from 4/1/07 - 4/30/07.

From 4/1/06 - 4/30/06, there were 1,068 listings entered into MLS for Placer County according to my stats and 1,112 entered from 4/1/07 - 4/30/07.

Gwynster said...

Davis has a couple of large clouds looming over it's head.

While Measure X was defeated in 06, planned developments in the Cannery lots and the Measure X location are back to being actively discussed. I'll do some more reach and get back to you on those but they are very big projects so lots more housing units coming online to the public.

The other thing Davis property owers are worried about is UCD's Village West. 1130 homes built in 2 phases starting now plus housing for 4000 more students. Multiple unit property owners in Davis are nervous.

Now there one more statistic Davis needs to worry about. UCD is going to be loosing about 1/2 of it's staff and faculty to retirements in the next 4 yrs. I haven't met a single person who says they are staying in Davis after they retire and I have been asking. That's a lot of boomers all trying to sell all at once in a small market.

So while Davis looks prime and contained now, Davis owners and their zero growth plan to inflate prices is rude wakening.

East Sac may stay prime but Davis's days are numbered.

Real said...

Doesn't take into account condos or new home sales...Add that in and it's actually a 1.7% drop.

That helps explain it. Actually, that just supports my claim about older 'established' (meaning completely built out) neighborhoods having flattened and now are heading up. By including condo's (usually under $300K) you drive down the median price along with the builders shifting from building higher end homes to lower end homes (22% drop in median new home price in Sac YoY). New homes sales are down 33% which will further prompt builders to cut back on new construction - this along with having to rebuy land options and higher gov. fees will dry up the supply in new homes over the course of the next 12 months. Existing homes in desirable neighborhoods continue to increase in price - just like I said they would.

Anonymous said...

real,

Are you really that hopelessly clueless about how median prices are derived? First of all, do you know what a median is? A median is the price at which half of the market is higher and half is lower. Therefore, if volume tanks for the lower end market, what happens to the median? It goes up. Does this mean that house prices are going up? Sorry, it doesn't.

The same dynamic has been playing out for the entire Bay Area, which could be considered more desireable in general than Sacto (by the numbers, not my opinion!) Medians in the BA are still flat to generally up. Does this mean that prices haven't tanked hard? No, it doesn't. All it means is that the people with money are still buying, and everybody else isn't. This is known as median skewing and is a very well understood concept for anyone that had been following Real Estate for more than a few months.

Prices will not flatten in desireable areas, they will drop hard and have been dropping hard. Sorry to burst your bubble, so to speak.

Sippn said...

Don't know, seeing gas prices pushing up prices in close in high end neighborhoods.

Real said...

Are you really that hopelessly clueless about how median prices are derived? First of all, do you know what a median is?

That is how median is derived? Shit, and all this time I was thinking they were picking numbers out a hat....

Therefore, if volume tanks for the lower end market, what happens to the median? It goes up.

On this point, I suggest that you actually read my posts before trying to reply. I stated that condo's and new home sales LOWER the median price as they sell for less than existing homes. If they maintain the same % of total sales but drop in price (which is what happened in April), the median for the New Homes + Condo's + Existing Homes DECREASES - exactly like I stated. Now, looking at existing homes (which is what I actually care about - I live in an established neighborhood), the prices are flat to up since Q4'06.

Prices will not flatten in desireable areas, they will drop hard and have been dropping hard.

This statement denies reality and hurts your credibility. Existing homes resales in desirable areas are up from Q4'06 and some areas are showing increase YoY. You can try to put your head in the sand all you want, but it does not change this fact. Please read the article that I linked to - prices are UP.

Medians in the BA are still flat to generally up. Does this mean that prices haven't tanked hard?

Please enlighten me on how 'hard' prices have tanked in the Bay Area. People that live in good neighborhoods still get multiple offers and property moves fast. For those int he ghetto areas of Palo Alto, things have slowed. This is the same trend as Sacramento and pretty much every other city. People with money are less effected by downturns - this is news to you?

All it means is that the people with money are still buying, and everybody else isn't.

Okay, so if people with money are still buying, do you expect that to drive up prices in desirable neighborhoods or drive them down as those with money flock to buy a $200K home in Oak Park or Natomas? Think real hard about this before typing a response.

Your whole argument is logically inconsistent and I suggest that next time you read what you write before posting because this attempt sucked.

Real said...

From the Lander's propaganda board:
Patient Renter said...
"We are tracking Gold River, have seen a house where a wished 150K profit is now turning into a loss."

That can't be possible. According to Real, Gold River is holding tight.


Purchased 10/06 for $690K
For Sale 5/07 for $699K

Talk about prices tanking....if this is your best shot at talking down the market in Gold River, I suggest that you try a little harder next time.

Anonymous said...

"Now, looking at existing homes (which is what I actually care about - I live in an established neighborhood), the prices are flat to up since Q4'06"

You seem to have a knack for looking at the data in a very unique and exactly wrong way. Big picture is: housing sucks and is going down, and will for many years to come. To the extent that the lower end of the market is moving with volume in a given month, then yes medians will be lower overall (duh?) This is true regardless of market conditions.

How low do you think a condo or a new house in a good neighborhood can go before it effects the pricing of the existing homes nearby? $50K lower? $100K lower, $300K lower? You would answer that it will never have an impact, but the reality is at some point it will have an impact as people will say, "hey, I can get a new house over here for so much less than that old house." Sellers can have crazy wish prices for a long time but they will eventually get pummeled into submission by the market, and/or just lose the house to the REO man once the reset kicks in.

You may fantasize about a scenario where the low-end of the housing market can crash and burn, with no bleed-through effect on the upper-end of the market, but this just isn't in the cards. Look at any housing bust throughout the history of time and show me where the higher-end wasn't dramatically affected. And don't talk about the uber-rich ultra high-end mansions because these won't go down that much at all. I'm talking about stuff that was priced in the $700-800K range at the height of the bubble - pure bubble fantasy pricing. By the time the bust is over, these will get a 60-70% haircut. So the uber-rich will still have a $2M mansion that might have been $2.5M at the top, but that $800K McMansion will now be $300K. See how this works?

"Okay, so if people with money are still buying, do you expect that to drive up prices in desirable neighborhoods or drive them down as those with money flock to buy a $200K home in Oak Park or Natomas? Think real hard about this before typing a response."

Down. Housing is still moving in good areas, but at a much slower pace than last year. Volume changes always precede pricing changes. You should know this right?

Also, you are totally ignoring the coming recession (which has already started and is directly related to the housing bust) and how this will have a serious negative impact on the housing market in a vicious cycle.

Anonymous said...

BTW, real, I used to argue with guys like you all of the time over on Ben's board - guys that would deny even the existence of the bubble in true David Lereah fashion. These guys have now been totally discredited as being full of BS from day one, and now the trolls have basically gone into hiding, or have been converted to reality. At some point, you will have to choose one of the above, and hopefully it will be the latter.

Real said...

By the time the bust is over, these will get a 60-70% haircut.

Also, you are totally ignoring the coming recession (which has already started and is directly related to the housing bust)


Next time, can you please lead off your post with these assumptions? That way, I can quickly identify you as being mentally challenged and not waste my time replying to you. Seriously, where do you people come from? I bet in the 1980's you were predicting the movie Mad Max would become reality.

Real said...

Anonymous - I just want to say sorry to you for my previous response. You have every right to your opinion regardless of how assinine or market defying I believe your theory is. I strongly believe that in time you will see the error of your ways and I will let the market prove my point rather than dismissing you as a kook.

Anonymous said...

Are you saying there is no recession? If so, you are the kook, and you need to take the red pill immediately.

The gubbermint's official GDP figure of 1.3% is very close to recessionary as it is. And that assumes a vastly under-reported inflation rate. So, as long as you don't eat, drive a car, go to school, go to the doctor, live in a house, use electricity, use water, etc. then inflation is benign. Otherwise, we are in a severe recession right now and are headed for the greater depression.

But please, go on in your Kudlow-Bushbot fantasy world believing that everything is just fine and that the American economy is the greatest on earth, instead of being the biggest debtor-nation manipulated sham on earth. That's a much happier place than the real world. BTW, I like your comment about Mad Max and that could most certainly happen. Hmmm...come to think of it, we could get $5/gal gas pretty soon.

Patient Renter said...

"Purchased 10/06 for $690K
For Sale 5/07 for $699K"

Wow, this is amazing! Someone bought a house a few months ago and is attempting to flip it for a higher price? Clearly prices are going up, what great news! Who cares if it's merely an asking (wishing) price, everyone knows flippers never lose, right?

Gwynster said...

Anon,

Arguing with Real is slightly less entertaining then banging your head into a wall repeatedly. Most of the regulars just ignore him and hope he goes away.

Real said...

Patient Renter - I really, really enjoy your posts. First you post:

"We are tracking Gold River, have seen a house where a wished 150K profit is now turning into a loss."

That can't be possible. According to Real, Gold River is holding tight.


Then, when the numbers are revealed for the purchase and selling price (which shows AN INCREASE), you do not say - wow, Real was right - Gold River IS HOLDING TIGHT. Instead, you once again show that you are math challenged and post the following reply:

Wow, this is amazing! Someone bought a house a few months ago and is attempting to flip it for a higher price?

I really don't know what to make of this response - your comments don't even address the question anymore. You seem to be losing your grip on reality. I know having me (and the WSJ) prove your faith in the debunked Shiller theory to be misplaced must have sent your world spinning out of control. However, you need to pull yourself together and try to maintain the little dignity and credibility that you have left. As I believe I told you in the past - when you are proven wrong, either admit that you were wrong and move on or have the common sense to simply keep your mouth shut. That is free advice...but I suggest that you take it.

Patient Renter said...
This comment has been removed by the author.
Patient Renter said...

"Then, when the numbers are revealed for the purchase and selling price (which shows AN INCREASE)"

Real, man, you need to calm down and read your own post again.

"Purchased 10/06 for $690K
For Sale 5/07 for $699K"

To most people from planet earth, "For Sale" would mean that the house is FOR SALE. It hasn't sold. A higher asking price isn't considered a general increase in prices. Do you seriously not get this?

mktwatcher said...

The debate over whether the 200-300K market will hurt the higher end market is interesting. I have a couple of observations.

First, most of the higher end market is "buy up" buyers who depend upon their existing home equity for down payments. Trouble in the low end market will affect these buyers, who will elect to stay put for a few more years.

I agree that prices in established neighborhoods are more stable. However, the post about retiring Davis professors could also be applied to Sacramento. The State is projecting a possible loss of 30-40% of its workforce due to retirement within the next 7 years. Many of these people were able to buy in the desireable established neighborhoods of Midtown, Land Park, East Sac, etc. during the 80s-90s. It is possible that there will be an uptick in inventory in these areas when these workers cash out their equity and head out of town. Unfortunately State wages have not kept up with Sac housing costs and it is unlikely that current State workers like myself will be able to afford this housing at its current value. Are there enough new high-income jobs to absorb this inventory?

I was in LA during the 90s and, based on my observations during that recession, Sac housing will go lower. The full impact of REOs and short sales has not yet been felt. However, housing there did not go down 50% by any means. The most I remember it going down was 25-30% in some areas of the San Fernando Valley. If housing in Elmhurst, Tahoe Park or Curtis Park goes down 10-20%, which I think is possible, I am hoping to be one of those 200-300K buyers next winter.