Kudos to the Sac Bee for putting a nice spin on the recent DQ news. They featured a couple that had been patiently renting till they could afford a house. She is a consultant and he is a lawyer. They recently bought a home at the end of 2007 for half of what it was listed at previously.
When professional DINKs (Dual Income No Kids) can afford a home in Sacramento, that is a good start. However I think it will be a little bit longer till its DITO's turn (Dual Income Two Offspring).
The same article noted that previously only 2% of homes were under $200,000, but now 12% are. Using a somewhat generous 3x income estimate.....first time home buyer's will have to have an income of $66,000 and a savings of $40,000 to purchase a home at that amount without overextending themselves. When entry level homes are priced at $150,000 on average, I think we will start seeing some market stabilization.
If future generations are going to be able to afford a home here in California, we need to see additional price drops. Otherwise we will be visiting all of them somewhere in the Midwest.
skip to main |
skip to sidebar
A blog dedicated to my obsession with buying in the Sacramento housing market
Bubble Basics & Buying Resources
Feeding My Obsession
Blog Archive
-
▼
2008
(287)
-
▼
January
(34)
- The Weekly Screen Scrape - What Goes Up.....
- With Each New Day, A New Story
- Civic Duty Reminder
- Sacramento Settlement Patterns and the Desirabilit...
- Hitting Home
- The Waterfalls of El Dorado Hills
- For the Record (RSVP)
- Invitation to a Preemptive Anniversary Smashing
- Faltering Food Chain
- And Now Comes the Lawsuits!
- What a Difference a Zip Makes
- December/January Month's Inventory
- Special Taxes without Special Privileges?
- A Paradoxical Median
- A Good Start
- The Weekly Screen Scrape - How its Done
- Unconventional Thinking: Finding Help
- Making Apples to Apples Price Comparisons
- Care and Feeding of My Obsession
- Asking Price Distribution
- January Change in Inventory
- Food for Thought
- The Weekly Screen Scrape Gets a Makeover
- News n Notes
- About this Site (Boring Disclaimer)
- Black n Blue and Red All Over?
- December Melissa Data for Folsom and El Dorado Hills
- House Swap?
- Scoring a Better Mortgage
- Hiring Help
- Braving the Elements
- A brief look back
- A Year of Unrequited Offers?
- January 2008 Good Buys & Offers
-
▼
January
(34)
Labels
- Affordability (39)
- Anecdotal (123)
- Asbestos (5)
- Auburn (3)
- Auctions (2)
- Average Buyer Blog (29)
- Bear Stearns (2)
- Economy (59)
- financial planning (14)
- Financing (42)
- gated developments (5)
- Good Buys (14)
- Headlines (92)
- Investors (4)
- Market Outlook (120)
- Market Stress (33)
- Neighborhoods (28)
- Offers (3)
- Pet Peeves (14)
- Purchase Criteria (32)
- RE Services (20)
- Renting (27)
- Resources (21)
- retirement (2)
- Service Recommendations (4)
- Stats (180)
- Tactics (44)
- Tradeoffs (26)
- Waiting it Out (53)
Posts
15 comments:
BT, did you see the piece on generationally driven buyers market in the Economist? The Economist is always a great read.
We're just now finishing the sell off from the silent era (you see lots of this in grey areas like Davis) and the 1st cohort boomers start in a few years. It will be 2029, according to the article, when the last boomers finish downsizing.
So consider now that the opportunity cost of cash could potentially mean even more opportunities down the road, regardless of whether we formally enter a recession or not.
Just pulling out my big spoon to stir the pot a little >; )
Although places like the Bay Area may never withstand scrutiny against historical affordability measures, Sacramento is likely to return to its historical affordability "mean." And maybe with downward momentum, actually surpass the mean on the downside. These are very interesting times we are living in!
Although the trend has been for larger homes across the board, my next move will be both smaller and single level. I'm far from retirement, but I don't want a two story McMansion on a 5200 sq ft lot.
I read that article in the Bee, and I'm not so sure that house is such a good deal. It's located "outside the Pocket" (read: Meadowview), and the bank had to cut them a check to replace the stolen air conditioner! It's hard to believe that house was ever worth $450k.
That house isn't a good deal; just the media trying to make a big splash with the 'lookie at how much we savedz!!!' feel to it.
In the sub-par areas, you'll find such 'deals.' Of course, a 'deal' truly involves getting what you want, as well as simply saving money. It's like going to Costco and buying two dozen widgets for a 'bargain' price. Sure, you got a good price, but is that what you really were looking to buy? Price id important, but it isn't everything, especially when it comes to buying a home.
I don't know if the home the bought is a good deal or not.
The point was more, if prices are where dual income professionals can finally "afford" a home.....we probably still have a long way to drop before homes are affordable to the vast majority of housholds.
I haven't seen census data, but DINKs are probably a minority and in the upper income brackets.
What a difference a year makes, eh? It doesn't seem that long ago that such comments about affordability would have been considered mainstream blasphemy.
Regarding Paul's comment that we may surpass the "mean" on the downside, I actually now think this might happen. Why not? We passed it on the upside and housing is "an investment" after all.
Regarding the Sac Bee story, it doesn't matter if the home was a good deal. What matters is that the media is showcasing 50% off home sales. This is significant.
Gwynster - No, but the WSJ did a quick soundbite on it. My mom, who is the very beginning of the baby boomers retires next month. Luckily she sold her home last year.
I like the economist (espcially the non-US viewpoints)....but articles are soo in depth, I don't have that kinda time.
http://tinyurl.com/3exg4e
This is stuff us old timers on Lander's have talked about before but it will be new to all the people who just discovered these housing blogs in the last few months.
btw, you can sign up for news alerts via the economist which I've done for years.
As DINKs who relocated to Sacramento from the steep LA market, we'll be renting through the early summer at least. We make a comfy $130k and even with $40k in the bank for a down payment, we're not jumping to buy until we find what we really want.
"Regarding the Sac Bee story, it doesn't matter if the home was a good deal. What matters is that the media is showcasing 50% off home sales. This is significant."
The fact that a bank-owned home in a questionable area went for 50 percent off (If it really sold for $455,000 in 2004, which I doubt) does not mean you're going to find a similar deal in Roseville or Folsom. At least not yet - maybe later this year, by which time that $215,000 house will be worth maybe $150,000.
I agree that it's a nice start but 215k is too high for that area. later this year, say after August is going to get really interesting.
Still is damn nice to see 52% off from the peak in print. Thanks Jim!
Just looked up the house in MLS...Here are the stats on it:
1800 sf
Sold 7/29/05 for $423K
Sold 2/3/06 for $455K
Sold 1/31/07 for $388,087 (bank took it back)
Sold 12/21/07 for $214,500
At present, here are some other identical homs in MLS:
Active
1924 71st Ave - $200,000
7933 Tantura - $229,000
7775 19th St - $235,000
7763 19th St - $239,000
7746 19th St - $243,000
1965 Expedition - $247,000
1968 Bonavista - $249,000
18 Hasbro - $259,000
31 Hasbro - $299,000
Pending
1999 Bonavista - $224,900
1988 Expedition - $259,900
These homes are all over in the Meadowview area. I'm sure most of know exactly where they are, so I won't go into that part of it.
Bottom line--that price isn't a steal by any stretch of the imagination, but it's a good trend :-)
That's incredible. In under two years that house lost over half it's value. What I'd like to know is what kind of idiot paid $455k for the house in early 2006, when it was very apparent at that time that the party was over. I know - I put a house in Rocklin on the market in February 2006, aggressively dropped the price because I didn't want to chase the market down, and finally sold it in June.
Meadowview? Meadowview?? Anyone crowing about 50% off anything in Meadowview, other than crack, should have their head examined. This was the best show dog that the Bee could find? Meadowview??
@ beagle:
I agree with you, but I also looked at the MLS today and found 4 SFH under $200K in Carmichael, and 20+ more under $250k. Of course, most were REO but some were on really large lots of .25+. Those were the stunners, at least to me, I'd never thought I'd see prime Carmichael at those prices, at least at those lot sizes, I am stunned.
Some were quite atractive "as is" which probably means their price should go even lower and, at least one showed on the current FIT list with a current $84k haircut which probably means it could go lower. The RE listing showed it as bank owned, the FIT showed it as a flipper for now. Last price paid was $455k if I remember correctly.
I never thought we'd see these prices in Carmichael. Especially on quarter acre+ lots.
Interesting and strange times, indeed.
Post a Comment