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.








5 comments :

Anonymous said...

Can anyone see what this home was recently purchased for. It was a forclosed property that sold. Previous purchase was 424K

9504 Sara St
Elk Grove, CA 95624

Wadin' In said...

9504 Sara Street sold on 12/19/07 for $220,000. The buyer got a $182,000 loan. The seller was US Bank, probably one of their MBS investor portfolio we all hear about, for which they are the trustee.

The house previously sold on 9/13/06 for $424,000. That price, for 1386 sf, was over $300/sf. Possibly a mortgage fraud, cash back deal. Never the less, the new price is almost a 50% decling, and it's not even '09. Now where have a heard that before....50% decline by 2009....PR?

Patient Renter said...

"Now where have a heard that before....50% decline by 2009....PR?"

That's Perfect Storm's mantra. He took a lot of heat a couple years ago when he was first saying that. Now it looks like it's going to come true.

smf said...

I think the moderation we are seeing now stems from one thing, let me see if I can explain it well:

The flippers with less carrying capacity were the first ones to exit. These cheaper homes are those than can be seen to be 50% off right now.

The next flippers to fall are those who had bigger means and bigger stakes in the market. They are not budging (much) right now, hoping that the market will be ready to turn around soon.

If these people price (priced to market) their properties at 50% off, as some properties have, their losses would be staggering.

They have been able to hang on for a little longer, and that is why we see the higher priced areas median not fall so much.

These higher priced areas are not falling because of higher demand, but because those with stakes there cannot face reality of such immense $$ losses.

Max said...

These higher priced areas are not falling because of higher demand, but because those with stakes there cannot face reality of such immense $$ losses.

I think we have a total capitulation/market failure event taking place. These sellers aren't even trying to sell their houses any more, they're just walking away.

If you aren't terrified now, you will be after you visit this site:

You Walk Away