With a sick kid and a broken dishwasher, I figured RE was going to be on the back burner for the day. But low and behold a story walked right though my door this afternoon (the nice guy fixing the dishwasher).
He had like 6 calls in the first 5 minutes of showing up (and boy was he late...but I work at home so its not as aggravating). I overheard him say on the 4th or so call that he can't work late cause he is meeting his Realtor tonight. I couldn't help myself...and had to ask if he was buying or selling. His response, "I'm one of the subprime folks".
He and his wife bought a home for a price that automatically gave them $60k in equity according to the appraisal in 04 or 05 (can't remember exactly), but now it is worth less than he paid. Interest only loan, and about to adjust. Sounds like they will be moving to somewhere in TX where they can get more home for half what they paid here. He said his payment is $3000 a month. Yikes (waaay more than our rent).
I didn't get many details since he kept getting phone calls and I didn't want to pry.
Have I mentioned how much I like our landlord? Really nice guy, and got right on the dishwasher thing!
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I think the most telling comment is that he is moving out of state. I recently saw a government statistic that stated that California saw a modest net migration out of state. This is what happened in the early 90's downturn, too. Folks just moved out of the high priced real estate of California, to less expensive cost of living states. If enough folks choose to move out of California, that could add measurably to the oversupply of vacant SFH's, putting more pressure on builders to stop adding to the supply side of SFH's. And more downside pressure on prices ...
That was the part that was really sad to hear for me. He was born and raised in Sacramento.
When the truely native population to an area decides to move aways...you know something is wrong.
There but for the Grace of God and my Depression-era raised parents, go I.
The older I get, the more I appreciate my folks. They could squeeze a penny 'til it screamed, and the only things they bought on credit were ONE car and their house.
I can't get through the day now without at least one, and sometimes several, housing related stories from people who have no idea that this is my avocation. And unlike a lot of bubble bloggers, I don't feel that all of these unfortunates deserve what they've gotten. Many were just too young and inexperienced to be able to make a good decision, and most didn't want to make money off the house -- they just wanted a nice house in a nice neighborhood to raise a family in.
Our society places so much emphasis on material wealth and consumerism, and for many young people this is all they've ever known. I tried very hard to raise my kids the way my parents raised me, and the one kid (more so his wife and in-laws) who has embraced the materialistic lifestyle has made the others all feel varying degrees of self-doubt and failure. Heck, it's made ME feel that way at times.
Paul,
We went over the USC data for 2000-2006 a while back (I can't remember when or I'd link it) but I can give you the figure for 2006 for Sac county. The pop gain was 11,031 but that was because we had as 21,396 births.
Gwynster: Thanks for the interesting stats on 2006 Sac County population. So in other words, at the beginning of the downturn, the real population of Sacramento County declined. (Gain less births means folks had to move out of Sacramento County.)
And 2006 was before it really started to "hit the fan" in Sacramento. If I had to guess, if 2006 was the start of a trend, it must be much greater for 2007. It's probably too soon to call U-Haul and ask if there is a surcharge fee for one-way rentals out of California, like we had in 1991-1992 (to cover the cost of getting all those trucks back to CA).
Well kind of
USC estimates lag by about a year due to collection methodolgy. So if you see a decline in the period ending July 06, it's reflecting people who were polled on what happened in the period ending July 05. In short, USC lags by roughly 2 years.
And then you have the issue of normalizing data. USC can get pretty aggressive but at least they aren't using fairytale numbers like the CADoF.
I get asked at work when I am going to buy by a few people who currenly own.
I tell them I will have to see what the market looks like in 09 cause 08 isn't looking pretty.
Maybe in 09 I can get a nice place around $350k with no HOA and the seller buys back the Mello Roos in full. And my dream home has to have more than a foot wide backyard. .25acre would be the minimum that I would be looking at.
At least there is hope that I will be able to buy in a year or 2. Back in 05 there was 0% chance.
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