Tuesday, January 29, 2008

Anecdotal Bay Area Retail Photos Part 2

I was on the Peninsula today, and I visited a Pep Boys in Mountain View, an OSH in Sunnyvale, a Kmart in Redwood City, and a Home Depot in San Carlos. All the stores had more staff than customers. OSH and Kmart were the worst, with maybe a 3:1 staff to customer ratio between the hours of noon and 3PM. Ouch!

Also, check out the photos I took of the big gasoline tanker accident today. (Unrelated I know, but I had to share them :) As of late Monday night, north 101 is still closed. Apparently they have to replace part of the roadway because of the spilled fuel. Glad that's not my commute!

Pep Boys: Mountain View

Orchard Supply Hardware: Sunnyvale

Kmart: Redwood City

Home Depot: San Carlos


A Look at the Last 30 Days

Just for grins, I thought I'd compare the last 30 days of sales for Sacramento County to the same period over the last 2 years. The numbers below shouldn't come as a surprise to anyone, but they do show the acceleration in price declines. Interesting to note is that the average/median home size did not change very much. And yes, I know the dates below are more than 30 days, I just made it that way so it's easier to look at :-)

2005/06 = December 29, 2005 - January 29, 2006
2006/07 = December 29, 2006 - January 29, 2007
2007/08 = December 29, 2007 - January 29, 2008

# of Sales
2005/06 - 1121
2006/07 - 836
2007/08 - 666

Avg Sales Price
2005/06 - $391,898
2006/07 - $372,890
2007/08 - $275,330

Median Sales Price
2005/06 - $355,000
2006/07 - $345,000
2007/08 - $259,950

Avg $/SF
2005/06 - $252
2006/07 - $227
2007/08 - $165

Median $/SF
2005/06 - $255
2006/07 - $219
2007/08 - $155

Average SF
2005/06 - 1599
2006/07 - 1676
2007/08 - 1679

Median SF
2005/06 - 1437
2006/07 - 1542
2007/08 - 1536

Also worth noting, for the month of January 2007, we had 1,318 sales. At present, for January 2008 we have 847. This comparison is for the 4 county area, not just Sac County.

Anecdotal Bay Area Retail Photos Part 1

I'm visiting the Bay Area this week, and I thought y'all would be interested in some stark, barren retail establishments I've visited. These are by no means scientific, or meant to be representative in any way.

These were taken at the Target off 152 in Gilroy. True, they were taken at 2 in the afternoon, but I've just never seen a Target this empty before at any time of day.

More to follow.

Sunday, January 27, 2008

Sacramento Regional Real Estate Trends for January 26, 2008

Moderation in the market stress indicators continued this week, as total SIT losses, SIT market share, and SIT inventory all showed little change:

These trends are in stark contrast to the reports of acceleration in foreclosure activity during the fourth quarter of 2007. This, combined with the new, creative ways people are finding to try and offload their debt, I am becoming more convinced that these SIT indicator "improvements" are merely the result of folks giving up on the market altogether. Why keep paying on a house you have no hope of ever paying off?

There have been several good discussions this weekend on the sea change in borrower psychology that is taking place, and I encourage those who haven't already to check out both Mish and Calculated Risk:

New Trend: "Intentional Foreclosure"
Changing Social Attitudes About Debt

As for this blog, I'm trying to find some good data to help me get ahead of this trend. Obviously, if the banks dump their REO onto the market, any spike in FIT listings would be coincident at best. Stay tuned.

Friday, January 25, 2008

Interesting Conversation

I was chatting with a co-worker friend of mine and of course the discussion turned to housing. (Those who have known me a while are sick of the subject, believe me. :) The conversation went something like this:

Him: So where's your house at?
Me: I'm down in Elk Grove. We got a sweet deal on a huge place.
Him: Really? How much did you pay?
Me: Oh, we rent. It's costing us $X per month.
Him: You rent? Oh, you're sooooo lucky!

No way this conversation would have happened even six months ago.

Wednesday, January 23, 2008

Interesting Find

Came across this post in a classifieds section on a local Elk Grove community website:

I removed the appliance from my home that is currently in foreclosure and my new place comes with a brand new one.

The dishwasher is about 1.5 years old and In perfect running condition and looks new. Very Quiet

KitchenAide 24in Dishwasher
Comes with original handbook/Paperwork

Retail: $699
Your Price: $300

Pictures to come shortly.

Contact me: krista@XXXXXXXXXXXXXX.com
or PM ME, or leave a post

Monday, January 21, 2008

Sacramento Regional Real Estate Trends for January 19, 2008

I'd like to focus this week on the market stress indicators, since there still appears to be a disconnect between what is being reported in the media, and what we're seeing in the MLS. To put it simply, REO inventory is not showing up:

A word of explanation: "Flipper inventory" in this context is defined as a houses that were bought within the last two years, and are now being offered for sale. "Flippers in trouble" are flippers who are selling at a loss, based on their previous sale price. Since a foreclosure shows up in the county tax records as a "sale", any REO house that a bank is listing in the MLS would show up as a flipper in this context.

We should expect flipper inventory to begin increasing as banks become desperate to sell their REO inventory.

This isn't happening. In fact, flipper inventory has been on the decrease since mid-2007. Even as overall market stress began to rise exponentially, the banks held inventory off the market, either unable to cope with the surge of volume, or unwilling to further stress the market with more inventory.

Now, even Sellers In Trouble inventory appears to be reaching a top, even as dollar losses continue to rise. Also, average days since last sale for SITs continue to rise:

So what does this all mean? Honestly, I have no idea. While I firmly believe that REO inventory must return to market at some point, it is possible that the banks will hold off selling as long as possible so they can avoid recognizing losses. Combine that with sellers not bothering to list their house at a loss before mailing in the keys, and you could see a reduction in market stress indicators even as things deteriorate further. In other words, I'm losing patience with the FIT indicator.

All the "traditional" metrics are still keeping with their trends. Each week brings a new two-year low on asking prices, and inventory is at record levels for this time of year. I'll leave you with an email I received from Agent Bubble today. Here's hoping everyone's stock portfolio is sufficiently hedged!

Oddly enough, inventory for the 4 county area is RISING, not declining right now. We're are 15,281 listings. There was a drop at the end of December that spilled into the first week of January, but it's now steadily rising again.

Tomorrow should be an interesting day for the DOW. With the other world markets taking dives today, I wouldn't be surprised to see trading stopped tomorrow if it starts in a downward spiral early on...Interesting times ahead.

Tuesday, January 15, 2008

Craigslist Trolling

Time for another edition of Craigslist Trolling. What makes these stand out to me is the incredible short-sightedness of some of the sellers. 2007 vehicle? Blue Man Group tickets?! Who shells out $600 for a two hour show when they can't keep a roof over their heads?!

1996 Explorer registered til Dec. 2008: Clean title interested in selling ASAP. I simply dont use this vehicle anymore, and need CASH to help w/ mortgage.
'97 isuzu rodeo 4x4 V6 runs perfect!: must sell to pay for new mortgage payments. ASAP
need clothes!!! size large: Oh yeah, our roof is leaking, and month past on our house payment.
Michael Parks Framed Prints MAKE OFFER NOW: Family needs to sell art collection to pay bills asap.
Nissan 300zx Twin Turbo - $12000: have no more money to take it to a shop and have it worked out due to my crazy house payment.
1.37 CARAT Diamond engagement ring: if not sold willing to go to you TODAY or TOMORROW. We need to pay the bank by Monday.
2007 Toyota Tacoma Double cab: excellent condition, need to sell due to mortgage issues, I love this truck, it was special ordered by me.
Dirt Bike 2006 Yamaha WR 450 - $3500: Mortgage is why I'm selling her, she's a great bike.
99' Chevy Dully: Mortgage comes first and couldn't afford it any longer. Take over loan. Only 82,000 freeway miles
Collectibles-Vintage nic nacs: i really need help paying my mortgage...
Blue Man Group 1st Row: 2 Tickets(2 seats side by side), Spectacular seats! Must sacrifice to pay mortgage.

Sunday, January 13, 2008

Sacramento Regional Real Estate Trends for January 12, 2008

The Sacramento Area real-estate market is in quick recovery mode after the normal end-of-year slowdown. Inventory remains at record levels for January, with 14,873 active listings in the four-county area. Lower-priced inventory remains at high levels as well, and the sub-$200K level is showing a nice recovery spike:

The rate of increase in troubled inventory slowed in Sacramento County, but there were jumps in other counties. Placer and Yolo saw larger increases in both SIT market share and SIT inventory:

Finally, asking prices trends continued their overall downward trajectory, with only Placer showing a tiny weekly increase. Week-over-week changes showed expected behavior, with "new" listings returning after after the holiday break. So far, 2008 looks to be one of large inventory and lowering prices.

Friday, January 11, 2008

Countrywide Bought: BofA To The Rescue

The gods must be smiling on Angelo Mozilo. I wonder if he got a "get out of jail free" card to help grease the wheels on this deal? Let the layoffs begin!

Oh, and for the record, my 2008 predictions are still in place. How much money does BAC have to lose on this deal so that my prediction educated guess can be right?

Bank of America to buy Countrywide Financial

Paying $4 billion, entirely in stock, to become nation's top mortgage lender
By Alistair Barr & Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- Bank of America Corp. said on Friday it's buying Countrywide Financial Corp. for $4 billion, confirming rumors that first emerged Thursday, in a move that will make it the top mortgage lender and loan servicer in the U.S.

The stock-swap deal will put an end to the independence of the troubled California lender headed by Angelo Mozilo, and represents an increase from the Charlotte bank's first investment into Countrywide (CFC).

"We believe this is the right decision for our shareholders, customers and employees," Mozilo, Calabasas, Calif.-based Countrywide's chairman and chief executive, said in a statement.

Terms call for shareholders of Countrywide to receive 0.1822 of a share of Bank of America (BAC) stock in exchange for each share they own.

At Thursday's close, that values Countrywide at $7.16 per share -- lower than the $7.75 closing price after news leaked of a possible deal.

Countrywide shares fell 15%, or $1.22 in pre-open trading Friday, to $6.53.

Tuesday, January 08, 2008

Sacramento Regional Real Estate Trends for January 5, 2008

Just the graphs this week since I'm already pretty late, except to mention that the first inventory data point is 14,868. (I have markers turned off so the trend line will only show when there's >1 data point.)