Friday, June 26, 2009

Friday Forecasting Fun

Back in March (Friday the 13th to be specific) shortly after the DOW hit new lows....our department started a "pool party" on when and at what point the DOW hits bottom.

I will be out of the money here shortly as I had guessed July 8th at 6394. Thinking CRE was still to hit the fan as well as inflation.

I'd like to get everyone's thoughts on our macroeconomic situation particular the answers to some of the questions below.....

In theory the stock market is a foreword looking indicator (not sure I agree). Curious to know what others think, was March 9th bottom, or is this another false rally...yet to plumb the depths of the market?

Opinion on the recession..... are we really past bottom...bumping along bottom? If so, long recovery (L) or short recovery (V)? If not, why not?

I've also heard a lot of conflicting thoughts on inflation. Some think we are in a liquidity trap, others think inflation is going to take off very shortly here. What do you think?

Will market volitility ever abate? particular I am refering to commodities like oil. Steep swings in prices are really tough for industries like aviation to digest and will be a huge drag on recovery. Is it speculators driving the wild swings or legitimate concerns about the dollar and inflation?

Wednesday, June 24, 2009

Frustrating Foreclosure Findings

Last year my father bought a foreclosure in Stockton. It wasn't an easy process. The bank was slow to capitulate, the realtor was pushing a lower offer that she was double ending etc.

With many other homes for sale on his street, my father is now attempting to purchase another foreclosed home for his mother (my grandma) so she can be nearby, but still feel independent. After much wrangling with my grandmother, he still had the bank to contend with. When he went to sign the papers on this modest home, he was in for a nasty surprise. The bank (BofA)included an addendum, which was over 15 pages, and was downright atrocious about it (giving a 2 hour window to sign etc.). As much as this home made for the ideal situation for my grandmother, I was pleased to hear that he walked away. In my mind, no home is worth signing away all rights and releasing all liability (and then some), the way they require in their addendum (especially on a home priced less than 100k).

We were in a very similiar situation and eventually walked as well. Our take away from the process, when bidding on a foreclosure, ask for the addendum up front.

Friday, June 19, 2009

Quieting the Cold Calls

I can almost sympathize with the individuals mentioned in the media who received so many pestering calls they eventually relented, and refinanced or took out equity. I have heard that when there is a NOD, owners receive a flood of calls and offers of services.

In the last week or so, we have received numerous calls fishing for loan or credit card problems. We don't have trouble with either, hence I assume they are fishing. But if they are fishing, then that means they are violating the Do Not Call registry rules, since they aren't calling related to a company we do business with.

One time I humored them and got connected to a series of people offering to help. Of course they wanted all kinds of personal information. It's hard to believe people would actually give this type of information to a cold caller, but I supposed when you are desperate, emotion tends to win out over reason.

If you resent getting telemarketing calls at 6am the way I do, you can sign up for the do not call registry here. To be fair, we disconnected our number and reconnected the same number at the new house, so it could be our number was taken off the registry.

Tuesday, June 16, 2009

Join the Club?

As long time readers know, I am a big fan of the master planned community concept where the centerpiece is a community clubhouse (complete with swimming pools, fitness centers, gathering rooms, etc). They offer a nice setting for meeting neighbors (which builds community) and also provide activities for kids that don’t involve a TV or computer.

I recently had the occasion to visit two of the more popular developments in the Sacramento Region, the Whitney Ranch House, in Rocklin, as well as the Anatolia Clubhouse, in Rancho Cordova. Both were very nicely done, and made me wistful that we passed up on Blackstone in El Dorado Hills.

I especially liked the wading pools for the little ones that can’t swim. The Clubhouse at Anatolia even has theirs gated, so moms don’t have to worry about the little ones wandering off near the big pools. However the Clubhouse’s lack of bathrooms for people in the swimming area was a huge inconvenience for my 5 year old who makes frequent trips.

Regarding the Whitney Ranch House, the kids loved the “magic” water spray area, and we really liked the personal cabanas. However, the amount of surgical enhancements on display, made even the EDH Sports Club look tame.

Regarding Blackstone in EDH, we seriously considered purchasing there, primarily for the location and clubhouse. In the end, we didn’t want to risk purchasing early in the 900 acre development (due to the greater economic troubles etc.), and weren’t real keen on the home layouts we could afford.

In my early quest for a clubhouse like setting, my previous land lord mistakenly thought that the Serrano Country Club was a part of the package with the HOA (like it is with his development down in Elk Grove). However, when my husband and his mom when to check out the Country Club, they were in for disappointing news, as it’s for members only. To add insult to injury, someone actually asked my mother-in-law to leave while she was looking around because she was wearing….gasp… Jeans (no jeans allowed). So we obviously got off to a bad start with the whole Serrano experience (not to mention the snotty assistant when I went to get my car sticker).

Tuesday, June 9, 2009

Yet Another Sign of the Times

In doing my usual weekly scan of NODs & foreclosures in EDH and Folsom, I was saddened to see that our old landlord is now on the list of NODs.

He was a really great landlord, and a funny guy, with a nice family. When we met him, his story seemed the epitome of the American dream. He and his wife came to this country, started a successful business (that was expanding when we met him), and had amassed a modest empire in local real estate.

Not sure if it was for our rental home, or the one two doors down from us that he owned as well. I know he had found tenants shortly after we left. In any case, I am really quite distressed at this news.....even though I figured the day may come.

Speaking of the foreclosure & NOD listings...., where I gather my data, has changed their free format. There seem to be many listings for land and commercial properties now. Not sure if I am only noticing because of the format change, or if their listings have expanded to include more listings.

Wednesday, June 3, 2009

Facts from Our First

I looked up our old place (in the D.C. suburbs) on Zillow today. According to their site, our first home has depreciated 21% since we sold it in the fall of 2006. Not near as bad as the market here in Sacramento. If we hadn't sold it, we would still have substantial equity, as the home has appreciated at an annual pace of 4.8% since our initial purchase in 2002 (a 41% CAGR).

Public Facts from Zillow:

Condo (actually a townhouse, attached on both sides, but we owned the land)
3 beds
2.5 bath
1,070 sqft
Lot 1,727 sqft
Built in 1979

Monday, June 1, 2009

Mixed Messages

Using some slightly non-scientific methods (the ZipRealty interactive map), I took a look to see how the different Sacramento housing market price levels are faring this spring. On March 4th of 2009 inventory was around 9000 SFH units. Today its now down to around 8400 units, a drop of 8.2%.

This is very misleading if you look at total inventory. Luxury inventory, over 500k, actually went up by 5.3% (at approximately 18% of total SFH inventory). In the mid-priced homes, 250k to 500k, inventory is down by 10.6%, and in the starter-home category (below 250k), inventory is down by 12%.

This may account for some of the trends we have seen in the Sacramento Housing Tracker weekly/monthly numbers. As lower end inventory dries up, and higher end inventory grows as a percentage of total inventory, thus driving the asking prices higher.

Side note.......While I really like Housing Tracker because it tracks multiple asking price percentiles (25th, 50th, 75th) as well as inventory, I have never understood where their inventory numbers come from. When I look at the greater Sacramento area on the ZipRealty interactive map, (from Davis to the West, Auburn to the North, Cameron Park to the East, and Elk Grove/Franklin to the South), I only come up with inventory at around 9,200, whereas HT is currently listing around 14,500. If I include land listings, it only bumps my number up to around 10,500.

P.S. We went to our first River Cats game on Sunday. The weather was perfect, the stadium is really nice (not to big). But I was surprised at how empty it was and wondering if it's the economy or normal attendance (not complaining...cause I usually stay away from venues like that cause I don't like huge crowds). The announcer made a comment of how the River Cats have the best attendance of all minor league teams. Perhaps I am just used to big city crowds (but very grateful to get away from them!!!).