Sunday, May 06, 2007

Sacramento Regional Real Estate Trends for May 6, 2007

I just got back from going out of town this weekend, and seeing as how dead tired I am, I'm not going to torture you all with a poorly worded analysis. So, enjoy the pretty graphs, and I'll be back to my more verbose self next week. Enjoy!





27 comments :

Bubble Sitter said...

Almost 16,000 listings. In honor of the derby, it is time to sit back with a Mint Julip and watch this listings race break from the gate and round the first turn. We may set a track record this time. June will having us watch this market head down the back stretch and around the far turn. Then it will be headed for home...."and down the stretch they come...."

It will be interesting to see who goes to the winners circle and who goes to the glue factory.

Sippn said...

So seeing some strange stuff happening (or not) ..

1/1/7-3/31/7 decent sales volume (of course less than the peak volumes of 2005-6, but decent)


Since 4/1 much slower me thinks, anyone see the same? see it picking back up again?

Reasons? taxes? subprime? sunspots? playoffs?

Fishing for your thoughts...

Gwynster said...
This comment has been removed by the author.
Gwynster said...

Sippin,

I think everyone rushed to get the last of the subprime before it was gone.

I know that when I called CW, I tried to play dumb and see if I could get a stated doc, 100% but no way Jose and my credit score is very good. If I needed to go that route, they said they'd refer me to another firm.

Now with a 720 score and money in the bank, they promised way, way more then I'd ever have imagined even with my crappy income.

My guess is that the worst of the buyers are out of the pool at this point. As the Warrenmeister said, now we get to see who wasn't wearing any knickers as the tide rolls back out

Max said...

Reasons? taxes? subprime? sunspots? playoffs?

Fishing for your thoughts...


Well, according to Lander, the m-o-m change is not that unusual. The y-o-y drops are headlines, of course.

From my various anecdotal discussions, it seems to me that the Sac market is fragmenting. Elk Grove, Natomas, and other outlying high-expansion areas are getting slammed, while East Sac, the Pocket, and SLP are still doing well. There are still a bunch of flips for sale in SLP asking for 25% y-o-y profit, and some of them are selling.

Guess the rich folks didn't get the bubble crash memo. :)

Real said...

Elk Grove, Natomas, and other outlying high-expansion areas are getting slammed, while East Sac, the Pocket, and SLP are still doing well.

Wow, who could have ever imagined that with real estate locations matters?!? Maybe some body should make up some rules on real estate(maybe 3?) that encompasses this knowledge. I wonder if those locations have a different rates of inflation as all properties will 'revert to the mean' as predicted by others on this blog....

Gwynster said...

Gawd Real, don't you have to go brush the lint of some gold coat or wax his car or something?

Sippn said...

He did say "I told you so"


"East Sac, Pocket, SLP,..." sounds like somebody talking from the Flat Earth Society.... you know, Sacramento does now extend beyond the hop fields to the east beyond CSUS a short buggy ride...

Sippn said...

On Wednesday, Countrywide Financial Corp. (CFC.N: Quote, Profile , Research), the largest U.S. mortgage lender, said it made 11 percent more home loans in April than a year earlier, though it slashed its subprime lending.


I heard they were busy picking up the slack.

Gwynster said...

Hey Agent,

I have a slightly off topic question. On the CHFA programs, what's the minimum fico score that qualifies? Do these programs require a cash reserve equal to 3 or 6 months mortgage payments? What's the current interest rate like?

I know people worry about FHA becoming the new subprime but maybe it already was.

AgentBubble said...

gwynster,

Have you seen this site:

http://www.calhfa.ca.gov/homeownership/index.htm

There's quite a bit of info on it that is surprisingly current.

Gwynster said...
This comment has been removed by the author.
Gwynster said...

Yes, found the interest rate 6%. I just can't get too excited about 6% anymore.

What I still don't know is what fico scores they take and whether they want that loan salted (it's that the term they use for 3 months worth of mortgage payments in the bank)

And everything they do requires documented income so I don't think those programs are going to bail out the market.

Sippn said...

Read the other day that FHA only had a 2% market share - a nice business but hardly appropriate for a national program. CHFA is probably in the "doesn't matter anymore" category.

Max said...

CHFA is probably in the "doesn't matter anymore" category.

With all the "recapture market share" talk, I would agree. They might begin to matter again if prices drop to within their lending range though.

I heard they were busy picking up the slack.

CFC is an interesting case: they appear to be grabbing market share as fast as they can. Interesting time to be doing that...

Real said...

CFC is an interesting case: they appear to be grabbing market share as fast as they can. Interesting time to be doing that...

The time to sell is when everyone is screaming 'buy' and the time to buy is when everyone is screaming 'sell'....this holds whether talking about stocks, real estate, or just about anything. Currently, the fear over subprime has 'overcorrected' and created a lot of investment opportunities where the spread is unwarranted in the higher rated mortgage securities. I assume they are seeing these pricing imbalances as well and are taking advantage to make pretty high$/safe investments.

Patient Renter said...

"I assume they are seeing these pricing imbalances as well and are taking advantage to make pretty high$/safe investments. "

If this is how you see the current state of the market, no doubt you're "taking advantage" of the situation as well?

Real said...

If this is how you see the current state of the market, no doubt you're "taking advantage" of the situation as well?

If I worked for a large pension fund/insurance company, etc that had $100M's to invest I would in a heartbeat. As it were, I am not actively managing a mortgage portfolio so I am not able to take advantage but I do know people in a position in the above mentioned industries that are doing exactly that. The only real estate I am looking at currently (other than my house that I am currently living in Gold River) is downtown San Diego. I love the city and would not mind owning property there especially as the DT area continues to grow and attract more culture and nightlife.

Patient Renter said...

"I love the city and would not mind owning property there especially as the DT area continues to grow and attract more culture and nightlife. "

Better get in while the gettin is still good! We all know financing isn't a problem.

Sippn said...

Forget what I said about lack of activity, a friend of mine suddenly finds herself with 10-12 listings, all but one over $1 mil - juggling offers on 3 this week.... thats a lot of activity.

Its Summertime!

Sippn said...

Real - me too love SD, but it would have to be near World Famous!

Patient Renter said...

3 listings with offers with 15,951 on the market (from bubbletracking), not counting the mass of unlisted REOs... yep, things are sure picking up.

Perfect Storm said...
This comment has been removed by the author.
Sippn said...

PR - yes that data point looks bad for the overall market and it has "felt" slow for the past month but Placer Association is reprting increases MOM and YOY over 2006 in opened escrows about 6% (signed contracts)

http://lamps.pcaor.com/lamps/PCAOR_documents/April%202007%20Statistics.pdf

Sac hasn't published April yet (for us outsiders), can't wait until they start using computers.


I know, escrow fall out rate - has it increased vs March 07? NO.. vs last April 06, maybe.

Max said...

Sac hasn't published April yet (for us outsiders), can't wait until they start using computers.

They did finally update their individual sales data through mid-April. (They always publish mid-month to mid-month so we're at least two months behind at all times) Here's a terrifying anecdote:

March 2007 resale sales according to AB: 1057.
March 2007 resale sales according to county records: 3205.

Anybody want to guess what the difference here is?

Sippn said...

how does the county distinquish between resale, foreclosure, new and refinanced?

Bubble Sitter said...

Sippn,

I think you perceive the county sales activity trend correctly. 3205 transactions and only 1057 of them were done by Realtors. This implies 66% of all title changes in March were lender foreclosures. That may also mean 2 more homes are added to the vacant-for-sale inventory for every one house sold in March.

Under these conditions, it should not take too long for Patient Renter and Perfect Storm to realize their strategy is going to work very well for them.

I just had an offer accepted at $144/sf on a house at a multiple of 15.3 times rent. Not a great deal, but I can make it work at these interest rates. The funny part is a nicer, larger house around the corner just went up for sale for $10,000 less. The first lender is not going to like me when I cancel, but the second bank will be very happy. They are selling at 56% of the April 2006 selling price (A Bubblicious FIT lost the house and $130K to Wells Fargo's foreclosure.) The price is 14.58 times the rent.

The biggest danger to my strategy is that rents seem to be seriously falling now and there is a lot of rental inventory on the market in the outlying areas.