Saturday, May 31, 2008
Wednesday, May 28, 2008
This is way off-topic, but nothing can quell the caffeine-fueled sense of outrage I felt this morning when I saw this:
This lot is normally $8 per day, but there happens to be a swearing-in ceremony for new U.S. citizens taking place across the street at the Sacramento Memorial Auditorium. Turns out, all of the "Priority Parking" lots were raised to $25 today, even those that are blocks away from the event.
I know many of the people attending these massive ceremonies are from out of town, so they're not aware of the very cheap parking lots all around the Memorial Auditorium. Here is a guide:
View Larger Map
Avoid the red lots, and use the green ones. If you know anyone who will be getting sworn in, please send them this post. The $25 lots were filling up fast, while the more inexpensive (but less obvious) lots were still mostly empty.
For more Downtown Sacramento parking information, visit the city web site. Oh, and arrive early. There will be a lot of you:
Tuesday, May 27, 2008
As promised, I have completed a comparison of Countrywide REO listings with the MLS. As I previously discussed last week:
Last year, I posted a comparison of REO listed for sale on Countrywide's web site with the MLS. Now that foreclosures are dominating the real estate story, the shadow inventory meme is catching fire. (Both Mr. Mortgage and Mike Morgan have recent commentaries on the topic.)This is now confirmed as far as Countrywide is concerned:
At this point, it is very difficult to piece together a complete picture of this shadow inventory, but the preliminary examinations I've been able to make seem to reconfirm the conclusion I drew last year: the banks have far more inventory on their books than they are actively marketing.
For May 17th and May 25th, only 55% of the REO listed on the Countrywide site was listed in the MLS as well. Keep in mind, this is not an indictment of Countrywide, it's an indictment of the NAR. The MLS is simply not giving us the entire inventory picture any longer.
Monday, May 26, 2008
No big changes to report this holiday weekend, so just the graphs. If you are desperate for some reading material this Memorial Day, may I suggest the following:
The Taking of Pointe-Du-Hoc on D-Day
The Battle At Qala-I-Jangi in Afghanistan
Operation Phantom Fury in Iraq
Battle of Mogadishu in Somalia
Thursday, May 22, 2008
A well-placed source who works for a large state government agency here in Sacramento sent me this age distribution graph:
My source assures me this distribution is typical for most state agencies, and it illustrates two problems. First, there will be a huge wave of state worker retirement beginning now and continuing for at least the next 10 years. Since California taxes are so high relative to nearby states, many retirees are choosing to move to Oregon and Nevada where the burden on those with a fixed income is much lower. (California is ranked the 12th highest tax state for retirees. Nevada is 36th, and Oregon is 37th.)
Look closely at the graph, and you can see why I said "at least 10 years." During the "golden era" of state government that began under Jerry Brown, the state government expanded, and several new agencies were created. This occurred just as the baby boomers were graduating from collage in large numbers, and many bright young people in their mid-20s were hired.
Flash forward 30 years, and things are remarkably different. Retiring government workers are not being replaced by recent college graduates, but by people in their mid to late 40s. (This is clearly a failure by state agencies to implement the Workforce Planning Model which addresses the age demographic issue as a problem, but cannot directly advocate the hiring of younger staff as a solution. I won't get in to the insanity that is the California State hiring process, or why management fails to hire anyone under 40 who isn't "connected" somehow. If you want the details, ask in the comments. :) This hiring of older workers will result in a continuous wave of retiring workers that will last indefinitely.
According to census figures, nearly 25% of all employment in Sacramento is provided by the state. When this retirement wave begins in earnest, I predict it will depress housing for years to come as retirees take their precious fixed incomes to other states with lower prices and tax burdens.
Wednesday, May 21, 2008
As the real estate market softened in 2007, the new owner of a three-bedroom, 1,600-square-foot house in Sacramento's Curtis Park neighborhood ran into trouble. The house that was purchased for $535,000 in January had lost equity. The owner fell behind in her payments, and eventually, the bank seized the home.The article does note that she recused herself from the housing bailout vote. FWIW, here's the listing details:
What makes this story different from the thousands like it is that the owner of this house was a member of Congress.
The story of the foreclosure of Long Beach Democrat Laura Richardson's Sacramento home is a tale of a real estate market gone sour. It is also an illustration of how far many candidates will go to seek elected office, even if it means quite literally mortgaging their own financial future.
While being elevated to Congress in a 2007 special election, Richardson apparently stopped making payments on her new Sacramento home, and eventually walked away from it, leaving nearly $600,000 in unpaid loans and fees.
Richardson took out a mortgage for the entire sale price of the house -- $535,000. The mortgage amount was equal to the sale price of the home, meaning she was able to buy the house without a down payment, even though the housing market was beginning to turn.
A March 19, 2008 notice of trustee's sale indicates that the unpaid balance of Richardson's loan, which is held by Washington Mutual, is more than $578,000 –$40,000 more than the original mortgage.
The Curtis Park house is not Richardson's primary residence. She also owns a four-bedroom house in Long Beach, in her Congressional district. Real estate records show she purchased that house in 1999 for $135,000. An estimate from Zillow.com puts the current value of that house at $474,000.
"The neighbors are extremely unhappy with her," said Sharon Helmar, who sold the home to Richardson. "She didn't mow the lawn or take out the garbage while she was there. We lived there for a long time, 30 years, and we had to hide our heads whenever we came back to the neighborhood."
3622 Curtis Dr
Sacramento, CA 95818
And here's the Notice of Trustee's Sale:
Before the big I5 closure disrupt the trend, I thought it would be good to revisit the traffic trend data I posted three months ago. Although overall traffic is up slightly since March, both I5 and 99 show year-over-year traffic volume declines:
Although 99 saw a slight rebound, traffic began declining in April once again, and seems to have leveled out at around 137,000 vehicle miles traveled per week. That's about a 3.5% decline from last year:
Traffic patterns will be heavily disrupted for the next few weeks by the I5 repairs, but I hope to return to this dataset at the end of summer once things return to normal.
Tuesday, May 20, 2008
"Borrowers are more cautious about what they can afford," said Michele Dillingham, a senior loan consultant at Sacramento-based Vitek Mortgage. "A lot of people are buying at below what they would qualify for. They saw what happened (with foreclosures) and don't want it to happen to them."Hmmm... Let me get this straight. Borrowers come into Vitek seeking a loan, qualify for more than they're comfortable with, so they borrow less?! This is a company that still offers stated income and interest-only financing by the way.
We have a major psychological shift taking place here, when lenders are offering more debt than customers are willing to take.
Sunday, May 18, 2008
It's déjà vu all over again. MLS inventory has been falling since mid March, and has crossed the 2006 level at 14,485:
This MLS inventory drop seems to be a nationwide occurrence, but there are reasons to believe that the MLS (and the NAR stats by extension) no longer represent a complete enough picture of the market.
Last year, I posted a comparison of REO listed for sale on Countrywide's web site with the MLS. Now that foreclosures are dominating the real estate story, the shadow inventory meme is catching fire. (Both Mr. Mortgage and Mike Morgan have recent commentaries on the topic.)
At this point, it is very difficult to piece together a complete picture of this shadow inventory, but the preliminary examinations I've been able to make seem to reconfirm the conclusion I drew last year: the banks have far more inventory on their books than they are actively marketing. Countrywide has 330 Sacramento area REOs on its site for a total asking price of $66,539,243. However, only 136 are listed in the MLS! I'll be digging into this data a little deeper later in the week.
As for the rest of the data, I think incessant_din said it best in the comments:
What I see is that the inventory is stable, but the SIT portion is stable and huge. Most stats seem to be stable, which might well be an inflection point or a bottom (or top, depending on your POV). If I were an investor, I would wait a couple of months to get a direction on the market. A flat market makes it hard to make money.
Thursday, May 15, 2008
Wish I could say I'm glad to be back, but that was the most relaxing honeymoon. :) I see there's been some interesting developments while I was out of wi-fi range... I'll have more to say after the data run this Saturday; in the meantime here are last week's graphs. (The data server never takes a vacation.)
Tuesday, May 06, 2008
Sales for the 4-county surrounding area faired pretty well for April. We are showing 2,147 sales, which is the highest number of sales since June of 2006. Just for fun, I also compared the sales numbers for April 2006 to April 2008. Here's what I found:
Avg $/SF - $257
Med $/SF - $249
Avg $/SF - $159
Med $/SF - $150