Saturday, August 08, 2009

Sacramento Regional Real Estate Trends for August 8, 2009

Summary Of Changes for Sacramento County

Week of 2009-08-08
Since 2009-08-01
Since 2008-08-09
Median Asking Price
Average Asking Price
Average Asking Price Per SQFT
SIT Inventory
FIT Inventory
New Listings
Price Drops
Price Increases

Four County Inventory Levels

Inventory on 2009-08-08: 11327

Asking Price Levels

Price Inventory Levels

Asking Price Distribution

Troubled Inventory Levels

Flipper Market Share

Sellers In Trouble Market Share

Sellers In Trouble Days Since Last Sale

Asking Price Average Percent Loss

Asking Price Total Dollar Losses


Weekly Inventory Price Changes

Weekly Inventory Price Changes


Anonymous said...

is it just my web browser or has nobody posted on your blog in weeks?

Max said...

Yeah, it's been pretty dead around here. My posting has been light also; too much happening in my life, and not enough in the bubblesphere. Summer is the slowest time on the blog anyway.

Darth Toll said...

The stories about "shadow inventory" keep popping up:

Mish has several good links in that story above. Some sources in the linked articles say there are 700K shadow inventory units, but nobody knows the real number. I guess the banks are trying to feed the market what it can absorb and also avoid taking losses. We have discussed these issues before, but as long as this shadow inventory exists, there can't be a meaningful recovery, imho.

The shadow inventory may be much higher than that if you include underwater sellers that want out but can't get out and so are waiting for higher prices (laff!)

Max said...

The Deutsche Bank report forecasting 50% of all US mortgages being 100% LTV or underwater by 2011 was a huge revelation. The analyst may be guilty of linear extrapolation, but with negative wage growth and huge unemployment, it's hard to fathom where any house price increases would come from.

As CR says, the end of cliff diving doesn't mean a return to growth.

patient renter said...

Yea, summertime - people are busy taking non-vacations or whatever. Life intervenes :)

We talk a lot about shadow inventory, but I haven't seen much discussion over what could actually prompt banks to have to unload their inventories? I'm starting to think they might just hold onto these things indefinately. Certainly there is no pressure being laid on them by officials to liquidate their inventories.

Bryan said...

So long as they remain solvent...and have enough liquid. It's surprising that they could leverage that.

I suppose it's a gamble, a judgment call: dump now driving down prices even more and take what you can get on that, or hold on to an asset which becomes even more perishable when not in use, hoping to get a higher return a few years down the road. But again, taking the second option requires a decent backup.

Max said...

Certainly there is no pressure being laid on them by officials to liquidate their inventories.

There is some pressure building. Even if prices have stopped falling, REO bleeds cash through tax payments and deterioration. When the banks are levered 12:1 based on fictional Level 3 asset valuations, a 1-3% per-annum bleed will completely exsanguinate the banks eventually.

On the defaults where the banks refuse to foreclose, how many years of back taxes need to accumulate before the counties take possession through tax lien sales? Especially as the munis become more desperate for cash?

Take my word for it: the new paradigm for the FB is "stay in the house as long as possible because the bank will never throw you out."

patient renter said...

Ah good points Max. About your new paradigm, I'm wondering how unversally that might or might not apply. I have some friends who may test the scenario soon, but they're not sure how far to go with it. Realistically, nobody wants to be thrown out without having made proper plans ahead of time.

Max said...

I have some friends who may test the scenario soon, but they're not sure how far to go with it.

I suspect, but cannot prove, that one reason the economy is doing so well lately, is people are redirecting their spending away from onerous mortgage payments into other things.

Tactically, if your friends are taking the ruthless default route, they should bank every cent they "save" by not paying the mortgage, and play for time.

Also, research the bubblesphere. Different banks are taking different tacts with REO; some are holding forever, others are liquidating rapidly. If they're lucky, their note is held by a soon-to-be failed regional like Corus or Guarantee, which means an additional delay while the FDIC sorts it out.

They could easily get a couple of years for free if they're lucky and they play their cards right.

patient renter said...

Well I know they're not quite that fortunate :) The holder is HSBC, servicer is Wells. I haven't researched how that might effect things yet.

Anonymous said...

"Patient Renter said...

I'm starting to think they might just hold onto these things indefinately."

I heard that after mark to market rule was relaxed, the banks could unload these properties in relaiton to profits so they would not be technically insolvent. So for example, if (thanks to new loans) a bank profits 50Million in a month, it will unload say 10 Million in REO, posting a 40Million net profit.

The irony of this is that if the economy really improves and banks are making say 4X as much, they can now dump 4X as much REO.

Which begs the question, if the 4X REO dump causes the economy to deteriorate again, banks will make less profits, and again slow down on the REO dump.

So my guess is yes, the banks will hold onto it a long time - especially if someone is living there, paying some minimal amount and preventing waste.

Long and short of it. Dont expect a flood - it will never come.

Buying Time said...

"Yeah, it's been pretty dead around here."

Speaking for a non-perma-bear, differences in opinion are not always well tolerated on the bubble sites...hence I lurk more than post now.

However I heartily agree with the CR quote.....the end of cliff diving doesn't mean growth.

The sky can only fall for so long...eventually it hits the ground.

Darth Toll said...

"Dont expect a flood - it will never come."

Anony, you may be right on that point. I've hoped for a long time that the banks would dump, not so I can bottom fish as I'm not really in the market right now, but more because the banks desperately need to clear all of the bad debt so that we can get an actual sustainable recovery going.

Sure, some banks (many?) will fail, but they will fail anyway. And if a massive dump occurs, these problem banks will fail sooner rather than later, thereby costing the taxpayers less by avoiding more frivolous TARP-style bailouts that just thrown good money after bad. This is basically an argument against going down the Japanese zombie-bank road that led to 2 lost decades (and counting) in Japan of no growth, slipping in and out of recession. We are headed there.

Sadly, the pigmen banksters that basically own everything appear to be in favor of the "lost decades" approach via game-playing and hiding the sausage.

Anonymous said...

"Sadly, the pigmen banksters that basically own everything appear to be in favor of the "lost decades" approach via game-playing and hiding the sausage."

Im actually beginning to think that may not be such a bad thing. Go back to Sept - Mar period when it seemed like the world was going to end. The govt had 2 choices:

1. Let it happen - get a massive, quick rundown followed by a sharp turnaround GDP drops say 15-20% then grows 5% a year.

The problem is, there is a small (say 20% risk) that things will not work out well socially. A rapidly deteriorating economy coupled with a "do nothing" government is never stable. Citizenry gets angry, riots break out, the republic itself is at risk.

Again, not saying it would happen, but in my view a 20% risk is unacceptably high. Remember, this country is only 250 years old - a blip compared to ancient empires that lasted thousands of years. If they could fail we could too.

Bringing us to option (2). Throw money at the problem, cause a much shallower bottom, together with lethargic growth for 15-20 years.

Sounds bad, but think of how much more "stable" this is. The citizenry now has years of slowly adjusting standards of life to get used to. New generations are born, who never knew "the good old days" and thus are more contempt with what they have. Sure the republic could implode in this situation too, but the risk is much much less.

So thats the tradeoff. We bought an insurance policy against systemic collapse, but now we have to pay for it, slowly over time. It was a defense mechanism of the govt to ensure its survival. Cant say that I blame them for that.

Going forward, I see us like the UK post WWII. Up til then they were the worlds lone superpower. After the war they were left with so much debt that they slowly lost ground compared to other countries for years and years and years.

So who will supplant us? China? India? Maybe. Although both are so far behind that even if they outperform they may not catch up by the time we pay this off in say 2060. Maybe by then we will all be equals til the next massive boom and bust cycle.

prism said...

How does one get the graphs to show? I get the set up but no data graphs. What is the problem? What is in the way?

Anonymous said...

How do I see the data charted on the graph?

Max said...

What is the problem? What is in the way?

Make sure you have javascript enabled, and you're not blocking in your adblock software. Also, if you're running NoScript, be sure to allow

How do I see the data charted on the graph?

Email me privately and we can discuss.