I would be lying if I told you I was perfectly at peace with our decision to purchase a home next month (we close mid-Feb). When I visit the house, everything feels right. But then I get back to the daily grind, and my confidence is shaken by the steady drumbeat of layoffs and record setting economic bad news.
I am a planner, and therefore very unsettled by uncertainty. Unfortunately, right now, uncertainty abounds. We are making this purchase decision based on assumptions and expectations about our future. Given our assumptions, the decision seems a reasonable one. But who is to say if those expectations actually play out? For instance, our intention is to stay in this home till our little ones graduate high school. But a lot can happen in 20 years (medical, family, job issues).
By the time we close escrow, we will have waited out the bubble for almost 2.25 years. Mr. BT and I are both ready to move on, and focus our efforts on other things. We look forward to designing our backyard and planting fruit trees, starting a real garden, and getting to know the neighbors.
Some days the anxiety is worse than others. Today is one of those days.....sigh.
Tuesday, January 27, 2009
Wednesday, January 21, 2009
Market Stress Update for Jan 2009
Last December I suggested that the supply of foreclosures would be slowly depleted as a result of the legislated delay in NODs. With no new NODs in the pipeline for a time, the existing foreclosures inventory will dwindle. So far things are moving along according to plan (see smooth lines on chart).
It is yet to be seen if the second half of my theory proves correct. In a couple months, fewer foreclosures will mean less downward pricing pressure. This in turn will giving the market a false sense of bottom come late spring. Unfortunately, it is false, because the NOD activity is rebounding with renewed vigor (see dotted lines on chart). The effects of all the new NOD activity on prices should be seen by late summer/early fall (given the current foreclosure timeline and pace of bank inaction).
It is yet to be seen if the second half of my theory proves correct. In a couple months, fewer foreclosures will mean less downward pricing pressure. This in turn will giving the market a false sense of bottom come late spring. Unfortunately, it is false, because the NOD activity is rebounding with renewed vigor (see dotted lines on chart). The effects of all the new NOD activity on prices should be seen by late summer/early fall (given the current foreclosure timeline and pace of bank inaction).
Sunday, January 18, 2009
The Hazards of Insurance
We are in the process of shopping for homeowners/hazard insurance. It's been very frustrating so far (and way more expensive than Virginia). When we give the agent details like, home size, zip code, basic material description, their model spits out a quote for the replacement value of the home which is considerably above our purchase price!!!!
They claim it is based on the cost to rebuild. I then explain it is a brand new home that was just built in the last 6 months and is being sold for less than what their model is telling them. Both materials and labor have come down considerably, so I find this explanation a bit hard to swallow. I am assuming their model is out of date, but they won't insure for less that what their model estimates.
For those who may be in the market, the California Department of Insurance has a nice premium survey tool that can be used to get an idea of competitively priced policies.
They claim it is based on the cost to rebuild. I then explain it is a brand new home that was just built in the last 6 months and is being sold for less than what their model is telling them. Both materials and labor have come down considerably, so I find this explanation a bit hard to swallow. I am assuming their model is out of date, but they won't insure for less that what their model estimates.
For those who may be in the market, the California Department of Insurance has a nice premium survey tool that can be used to get an idea of competitively priced policies.
Thursday, January 15, 2009
Listless in Sacramento
Moving from a 1000sqft. home* to a gigantic McMansion rental almost 3 times the size, we quickly became the repository of choice for all our family’s unwanted furnishings. Now that we are downsizing, we are attempting to unload some of the items, and purge the last of our baby items. After checking with family first, I was given permission to sell.
Back in the D.C. area we bought and sold a fair amount on Craigslist. I usually get a pretty good idea of price points by looking at other listings and the Target/WalMart price for an item. I almost never had to relist items at a lower price.
So I was rather astonished, as I haven’t received any serious inquiries for any of our items so far. To give an example, one item, I saw at Target for $200, we listed for $75 or best offer (in excellent shape, and the leading quality brand). At first I was thinking, it might be our location, after all, EDH is not very central. So yesterday I offered it to my daycare (for free), since they could use it. The lady I spoke with relayed a very similar experience with Craigslist she had recently (pennies on the dollar for an almost new item), and she lives in the Rosemont area. So there goes that theory.
I find this situation rather perplexing and somewhat disturbing. You would think more folks would be turning to CL for purchases instead of buying new (especially for durable items like furniture). At the same time, I wonder if there are too many distressed folks downsizing, thus flooding the market and depressing prices?
Any way you look at it, this is a very very bad (anecdotal) indicator, when even the second hand market for items is in a slump. I almost want to post a listing for an unbelievable deal, to test my hypothesis and see if I would get a response.
*Our place in D.C. had a finished walk-out basement. For reasons I have never understood, they don’t include basements in the square footage.
Back in the D.C. area we bought and sold a fair amount on Craigslist. I usually get a pretty good idea of price points by looking at other listings and the Target/WalMart price for an item. I almost never had to relist items at a lower price.
So I was rather astonished, as I haven’t received any serious inquiries for any of our items so far. To give an example, one item, I saw at Target for $200, we listed for $75 or best offer (in excellent shape, and the leading quality brand). At first I was thinking, it might be our location, after all, EDH is not very central. So yesterday I offered it to my daycare (for free), since they could use it. The lady I spoke with relayed a very similar experience with Craigslist she had recently (pennies on the dollar for an almost new item), and she lives in the Rosemont area. So there goes that theory.
I find this situation rather perplexing and somewhat disturbing. You would think more folks would be turning to CL for purchases instead of buying new (especially for durable items like furniture). At the same time, I wonder if there are too many distressed folks downsizing, thus flooding the market and depressing prices?
Any way you look at it, this is a very very bad (anecdotal) indicator, when even the second hand market for items is in a slump. I almost want to post a listing for an unbelievable deal, to test my hypothesis and see if I would get a response.
*Our place in D.C. had a finished walk-out basement. For reasons I have never understood, they don’t include basements in the square footage.
Wednesday, January 14, 2009
A Salute to My Muses
I knew the day would eventually come. The day when the housing bubble bloggers started to close up shop, either because their predictions had largely played out (Sacramento Landing), or because their aspirations for home ownership had finally been achieved (Bubble Market Inventory Tracking).
Our family owes an immense debt of gratitude to these bloggers for the countless hours they spent providing us with informative insights and data. Without them, we quite possibly would have committed financial suicide. (The same model home we are under contract for was sold for up to 25% more in the last 3 years.)
I imagine a year or so from now, there won't be much left of this community, as many will have finally purchased their dream home. It will be a bitter sweet goodbye, as my hope for affordable housing will have been realized for much of this generation, and hopefully those to follow.
Our family owes an immense debt of gratitude to these bloggers for the countless hours they spent providing us with informative insights and data. Without them, we quite possibly would have committed financial suicide. (The same model home we are under contract for was sold for up to 25% more in the last 3 years.)
I imagine a year or so from now, there won't be much left of this community, as many will have finally purchased their dream home. It will be a bitter sweet goodbye, as my hope for affordable housing will have been realized for much of this generation, and hopefully those to follow.
Tuesday, January 13, 2009
Trade Offs: Distressed vs. New
While investigating the perverted California property tax system for our new home, I happened upon a very handy tool. You put in the home APN, and it spits out all the additional taxes and fees associated with a property (Mello Roos, library, ambulance fees etc.). It only works for APNs in El Dorado County, but there is likely something similar for other counties.
http://www.co.el-dorado.ca.us/auditor-controller/PropTax/pt_direct_apn.html
Of course we would have preferred a home without a Mello Roos, but so far the trade offs seem worth it. Compared to our short sale and REO experiences, this purchase process is an absolute dream.
So far, the way I see it, buying new, as opposed to dealing with the banks on distressed inventory, has the following benefits:
1) The purchase contract seems much more evenhanded (less skewed toward the bank).
2) There is tons of disclosure.
3) Construction defect accountability etc. (California Civil Code).
4) The supervisor at the development has been very responsive about questions we have had (regarding an abandoned easement, and arborist reports).
5) The builders offer special financing incentives. I recently heard a story of how the bank’s title companies (primarily in SoCal) are charging exorbitant fees, which they are requiring the buyer to pay.
6) Putting in a backyard is pricey (for a new home) but you get exactly what you want, and can control the cost. The distressed homes we put offers on needed complete overhauls on the yard (dead plants and grass). It isn't as expensive, but still requires a lot of work.
Of course, many question the construction quality of new homes. However, I always tell people that homes made in earlier decades had their problems too. It’s just that time makes those defects apparent so they can be priced into the sale or fixed at the owners expense (our home in D.C. was very poorly made, and settled so much that doors wouldn’t close). My hope is that the home we are purchasing now was constructed with more care (since builders are no longer throwing up homes as fast as they can). I guess only time will tell.
http://www.co.el-dorado.ca.us/auditor-controller/PropTax/pt_direct_apn.html
Of course we would have preferred a home without a Mello Roos, but so far the trade offs seem worth it. Compared to our short sale and REO experiences, this purchase process is an absolute dream.
So far, the way I see it, buying new, as opposed to dealing with the banks on distressed inventory, has the following benefits:
1) The purchase contract seems much more evenhanded (less skewed toward the bank).
2) There is tons of disclosure.
3) Construction defect accountability etc. (California Civil Code).
4) The supervisor at the development has been very responsive about questions we have had (regarding an abandoned easement, and arborist reports).
5) The builders offer special financing incentives. I recently heard a story of how the bank’s title companies (primarily in SoCal) are charging exorbitant fees, which they are requiring the buyer to pay.
6) Putting in a backyard is pricey (for a new home) but you get exactly what you want, and can control the cost. The distressed homes we put offers on needed complete overhauls on the yard (dead plants and grass). It isn't as expensive, but still requires a lot of work.
Of course, many question the construction quality of new homes. However, I always tell people that homes made in earlier decades had their problems too. It’s just that time makes those defects apparent so they can be priced into the sale or fixed at the owners expense (our home in D.C. was very poorly made, and settled so much that doors wouldn’t close). My hope is that the home we are purchasing now was constructed with more care (since builders are no longer throwing up homes as fast as they can). I guess only time will tell.
Sunday, January 11, 2009
Give or Take a Peak
Thought I would do an updated peak check for the whole Sacramento market, as I have heard rumors that bottom is forming in some areas, but nowhere in sight for others.
I did a comparison by price per square foot (first two columns), as well as median price (last two columns), using the historical DataQuick SFH resale data from the Sacramento Bee. This is very similar to the data I posted last May.
I did a comparison by price per square foot (first two columns), as well as median price (last two columns), using the historical DataQuick SFH resale data from the Sacramento Bee. This is very similar to the data I posted last May.
- The point of reference is the November 2008 data.
- The DQ data only goes back to August 2002, so that is my earliest comparison date. While some argue that 2000 or 1997 is a better point of reference, this data hasn't been inflation adjusted, so Aug 2002 seems somewhat reasonable.
- Peak was defined as the max value for a zip code between Aug 2002 and November 2008.
- The data is sorted by the % change in median price from 2002.
- Values in green are positive (not so many of those left anymore).
- The yellow values are -25% to -50%.
- The red values are less than -50%.
Friday, January 9, 2009
Belated Year End Stats Review
I was a bit to busy over the new year to put together some summary housing market statistics.....so here they are a little belated (pardon the formatting, but didn't have time for a spreadsheet):
From my personal screen scrape (which includes Folsom & EDH homes) -
Date: 1/3/2008 ---- 1/8/2009
Total Avail. Listings: 96 --- 144
Total Pending: 28 ---- 58
Avg. Price sq. ft.: $199 ---- $171
Not bad for a market everyone thought was immune to the forces of economics =)
Going back even farther, to when I started collecting the generic data (my room/size criteria were slightly different, but max price point was the same):
Date: 3/18/2007
Total Avail. Listings: 42
Total Pending: 22
Avg. Price sq. ft.: $224
As for the Monthly Data Quick SFH resale data:
Market: Folsom ---- El Dorado Hills
Decline in Median Price since peak: 29% ---- 35%
Decline in Price Per Sq Ft since peak: 26% ---- 36%
(Peak for Folsom was Sep 2005, peak for EDH was Sep 2006 for price and Nov 2005 for sqft)
MelissaData average price shows comparable declines from peak for EDH, however it shows a 35% delcine from peak for for Folsom.
Of course a good portion of this drop in median is due to the paucity of sales at the higher end. Once the high end starts to move again (don't count on that anytime soon) I imagine the median will stagnate (due to change in mix of sales). This applies much more to El Dorado Hills than Folsom, as EDH has many many more homes over the 500k mark (currently Folsom has 80 homes over 500k while EDH has 241).
From my personal screen scrape (which includes Folsom & EDH homes) -
Date: 1/3/2008 ---- 1/8/2009
Total Avail. Listings: 96 --- 144
Total Pending: 28 ---- 58
Avg. Price sq. ft.: $199 ---- $171
Not bad for a market everyone thought was immune to the forces of economics =)
Going back even farther, to when I started collecting the generic data (my room/size criteria were slightly different, but max price point was the same):
Date: 3/18/2007
Total Avail. Listings: 42
Total Pending: 22
Avg. Price sq. ft.: $224
As for the Monthly Data Quick SFH resale data:
Market: Folsom ---- El Dorado Hills
Decline in Median Price since peak: 29% ---- 35%
Decline in Price Per Sq Ft since peak: 26% ---- 36%
(Peak for Folsom was Sep 2005, peak for EDH was Sep 2006 for price and Nov 2005 for sqft)
MelissaData average price shows comparable declines from peak for EDH, however it shows a 35% delcine from peak for for Folsom.
Of course a good portion of this drop in median is due to the paucity of sales at the higher end. Once the high end starts to move again (don't count on that anytime soon) I imagine the median will stagnate (due to change in mix of sales). This applies much more to El Dorado Hills than Folsom, as EDH has many many more homes over the 500k mark (currently Folsom has 80 homes over 500k while EDH has 241).
Thursday, January 8, 2009
Pessimism Bubble?
Very interesting post over at five thirty eight.....he asks the question "is there a pessimism bubble?"
Housing bubble bloggers are often accused of being overly pessimistic, so I thought this was apropos. While I am certainly bearish on the economy, and have been for over a year and a half, my hope is that we are now entering the containment phase (having more or less assessed majority of the damage.......prior to this December I don't think everyone fully realized just how bad things are).
Housing bubble bloggers are often accused of being overly pessimistic, so I thought this was apropos. While I am certainly bearish on the economy, and have been for over a year and a half, my hope is that we are now entering the containment phase (having more or less assessed majority of the damage.......prior to this December I don't think everyone fully realized just how bad things are).
Wednesday, January 7, 2009
At Any Rate (revised)
Back in July, I expressed my frustrations over the volatility of interest rates. In particular, this was a problem with offers on bank owned homes and short sales because the negotiations and contract periods were so long, it posed considerable interest rate risk.
Being the incredibly risk averse person that I am, I was anxious to lock in a rate as soon as possible for our current contract. I was almost giddy yesterday after talking with the builder's lender. They offered surprisingly competitive rates (I thought it would be a bit of a shell game to offset the financing incentive they offered...i.e. they charge lots of points, to get you to a normal market rate). However, we locked in a rate of 4.75% which is a full .5% less than what I had budgeted for! (I checked with a broker friend, Bankrate.com, and the Mortgage Professor to see if the rates were reasonable.)
Those in the know, speculate that rates will continue to go down as the government becomes more involved in the market (they actually started buying bonds on Monday), or as new programs aimed at reviving the ailing housing market are implemented. However, at the same time, I am nervous that the stimulus package, soon to be unveiled, will include provisions the mortgage industry and investors will not be happy with (cram-downs etc.). This has the potential to push rates in the opposite direction.
The uncertainty on both sides, coupled with the year's track record of volatility, was a strong incentive for me to lock in a rate. We are not ones to hold out or bicker over marginal gains. 4.75% is a fantastic rate given historical data. In fact, this rate is even better than what we had on our home in D.C., and that was a 20 yr fixed loan at 5%.
If anyone has advise on mortgages/financing/closing etc., now is the time. I am relatively clueless regarding this stage of the home buying process. For instance the whole points thing, is still a bit confusing to me (i.e. how much interest rate 1 point buys). Mr. Mortgage seems to favor them if you hold the home for over 4 years, and with the builder paying our closing costs, they seem like a no-brainer (our quote includes 1.25 points...I didn't even know you could partially point).
Being the incredibly risk averse person that I am, I was anxious to lock in a rate as soon as possible for our current contract. I was almost giddy yesterday after talking with the builder's lender. They offered surprisingly competitive rates (I thought it would be a bit of a shell game to offset the financing incentive they offered...i.e. they charge lots of points, to get you to a normal market rate). However, we locked in a rate of 4.75% which is a full .5% less than what I had budgeted for! (I checked with a broker friend, Bankrate.com, and the Mortgage Professor to see if the rates were reasonable.)
Those in the know, speculate that rates will continue to go down as the government becomes more involved in the market (they actually started buying bonds on Monday), or as new programs aimed at reviving the ailing housing market are implemented. However, at the same time, I am nervous that the stimulus package, soon to be unveiled, will include provisions the mortgage industry and investors will not be happy with (cram-downs etc.). This has the potential to push rates in the opposite direction.
The uncertainty on both sides, coupled with the year's track record of volatility, was a strong incentive for me to lock in a rate. We are not ones to hold out or bicker over marginal gains. 4.75% is a fantastic rate given historical data. In fact, this rate is even better than what we had on our home in D.C., and that was a 20 yr fixed loan at 5%.
If anyone has advise on mortgages/financing/closing etc., now is the time. I am relatively clueless regarding this stage of the home buying process. For instance the whole points thing, is still a bit confusing to me (i.e. how much interest rate 1 point buys). Mr. Mortgage seems to favor them if you hold the home for over 4 years, and with the builder paying our closing costs, they seem like a no-brainer (our quote includes 1.25 points...I didn't even know you could partially point).
Tuesday, January 6, 2009
Declining Service - Bad for Economy, Good for Homeowners
Some may recall my off topic post, a while back on declining regional air service levels.
In that spirit, I offer this link to a USA Today story. It details the drops in domestic scheduled service by state and airport. According to the data, SMF is down 13.2%, and OAK, an alternative used by many in our metro area, is down a whopping 28.5%.
Just to add a housing element to all this, finding out the local traffic pattern of metro area airports is always a good idea. My apartment in D.C. was just under the approach path into National Airport. There were times when I couldn't hear the person I was talking to on the phone because it was so loud.
In particular you want to look at the noise contours. These are typically available in the environmental studies associated with an airport. For instance see here, for Mather airport noise info, which affects many communities along the 50. If you are buying a home near an airport, its also a good idea to look at an airport's master plan to see their growth projections, and the type of air traffic they allow (commercial, general aviation, cargo).
In that spirit, I offer this link to a USA Today story. It details the drops in domestic scheduled service by state and airport. According to the data, SMF is down 13.2%, and OAK, an alternative used by many in our metro area, is down a whopping 28.5%.
Just to add a housing element to all this, finding out the local traffic pattern of metro area airports is always a good idea. My apartment in D.C. was just under the approach path into National Airport. There were times when I couldn't hear the person I was talking to on the phone because it was so loud.
In particular you want to look at the noise contours. These are typically available in the environmental studies associated with an airport. For instance see here, for Mather airport noise info, which affects many communities along the 50. If you are buying a home near an airport, its also a good idea to look at an airport's master plan to see their growth projections, and the type of air traffic they allow (commercial, general aviation, cargo).
Monday, January 5, 2009
Ebbing Ebullience
Still brimming with excitement (for our pending home purchase), the cold water that is a crumbling economy could not be kept at bay.
We were saddened to find out, once again, that Mr. BTs cousin was laid off (he works for a local auto dealer, that is now closing it's doors). He was laid off from a different Sacramento dealership back in June.
On a brighter note, my step sister, who was laid off down in Fresno, found a job in Sacramento as an administrative law judge.
We were saddened to find out, once again, that Mr. BTs cousin was laid off (he works for a local auto dealer, that is now closing it's doors). He was laid off from a different Sacramento dealership back in June.
On a brighter note, my step sister, who was laid off down in Fresno, found a job in Sacramento as an administrative law judge.
Sunday, January 4, 2009
What Changed our Minds?
As some of you may recall, at the end of September, my desire to purchase a home had completely faded. Only three months have passed since that time. So what has changed since that time?
Nationally:
Side note: unlike the MSM that often crucifies our political leaders for changing course, I actually admire people who keep an open mind and re-evaluate their position as new information and data comes in. (I'm not talking changing fundamental beliefs, but rather reevaluating the best course of action, i.e. I was pleased that Paulson changed his course on the TARP, from buying bad assets to infusing capital.)
Nationally:
- NBER has finally acknowledged what we all knew to be true; we are in a full blown recession as of Dec 2007. This declaration alone means very little, but I believe it has many psychological and political implications. Now that we are "officially" in a recession, which is already approaching the average length, we can focus on pulling ourselves out, as opposed to debating/denying its existence.
- Americans elected new leadership in November. Obama is a brilliant and articulate man, who seems less bent on blindly following ideology, and more focused on finding the right solution to what ails our nation (I don't want to start a political discussion here, so please limit your comments on this one).
- Interest rates have come down considerably, approximately a full percent (from mid 6s, to mid to low 5s).
- After looking for 2 years, we finally found a home in our price range, meeting most of our criteria, that doesn't need major repairs or renovations (this was a big issue for me, with two young kids, a full time job, and a husband that travels for work...I would much rather continue to rent than spend all my spare time fixing up a home to make it livable).
- Sacramento home inventory continues to decline, and sales continue to rise. Of course this doesn't mean prices will stop falling, but it may help with the pace of the decline.
- As I mentioned in the last post, our daughter will start kindergarten this fall.
- Mr. BTs job contract should be good for at least another 9 months and is likely to be renewed. My job, which is closely tied to air transportation infrastructure, will hopefully continue to be funded by the federal government (since it is aligned with the agenda of the federal stimulus).
- With relative job security for the next 9 or so months, a job loss will be offset by the reduced daycare payments when our kids start public school (currently an outrageous $1,700 a month for a local center).
Side note: unlike the MSM that often crucifies our political leaders for changing course, I actually admire people who keep an open mind and re-evaluate their position as new information and data comes in. (I'm not talking changing fundamental beliefs, but rather reevaluating the best course of action, i.e. I was pleased that Paulson changed his course on the TARP, from buying bad assets to infusing capital.)
Friday, January 2, 2009
Home at Last?
I am pleased to announce that as of today, we are under contract for a new home. We read and signed over an inch and a half of papers, and turned them in on Wednesday, December 31st, 2008.
Turns out Santa came through after all. This home is almost everything we wanted, and much more. I never would have though we could afford a home like this, especially if you had asked me two years ago. My husband and I both come from modest working class families and paid our way through school.
I feel very blessed that the housing market has been so good to us, as I know countless others have not been as fortunate. We sold our home in 2006, after living in it for almost 5 years. With the proceeds we were able to pay off our ginormous student loans, and still have a substantial amount left over for a down payment. For the last two years, we have waited, not so patiently, for the housing market to become affordable again.
As I have maintained throughout my time as a blogger, we were not waiting for bottom. My daughter will start kindergarten in the fall which is a big motivating factor for us to purchase sooner than later. To be quite honest, I am also worried inflation will start to erode my purchasing power by the end of 2009. With low interest rates, it seems like the ideal time to for us purchase the ideal home.
Below is a picture of our majestic oak tree and the view from our backyard (which we will need to finish). Unfortunately, I don't have much time today, so I will post more details later.
Ironically, OCRenter at BMIT just posted today that he became a homeowner.
Turns out Santa came through after all. This home is almost everything we wanted, and much more. I never would have though we could afford a home like this, especially if you had asked me two years ago. My husband and I both come from modest working class families and paid our way through school.
I feel very blessed that the housing market has been so good to us, as I know countless others have not been as fortunate. We sold our home in 2006, after living in it for almost 5 years. With the proceeds we were able to pay off our ginormous student loans, and still have a substantial amount left over for a down payment. For the last two years, we have waited, not so patiently, for the housing market to become affordable again.
As I have maintained throughout my time as a blogger, we were not waiting for bottom. My daughter will start kindergarten in the fall which is a big motivating factor for us to purchase sooner than later. To be quite honest, I am also worried inflation will start to erode my purchasing power by the end of 2009. With low interest rates, it seems like the ideal time to for us purchase the ideal home.
Below is a picture of our majestic oak tree and the view from our backyard (which we will need to finish). Unfortunately, I don't have much time today, so I will post more details later.
Ironically, OCRenter at BMIT just posted today that he became a homeowner.
Monday, December 29, 2008
One Last Attempt in 2008
A new home, we had our eye on last summer, fell out of escrow this month. It is priced competitively, given current interest rates, as is the other local development we had our eye on (even with all the extra monthly fees and taxes). It was a bit of a difficult decision, but we figured we would go with the higher priced home since it best meets our needs.
So we put in our first offer on a new home in a development (last year's offer to a builder was not in a new home development, it was more of a one off type deal). Our offer was only 5% below asking, so I don't feel we are being unreasonable. After all, they already received a 5k deposit on it from the previous buyers, and if we had come in with our realtor the first time we visited, they would have given him 5k as well.
So now we wait.
(The part that was most disconcerting about this offer process was, they didn't care/ask or want any documentation about the financing, like what our credit is, or if we have any money down etc., all they really wanted to know what what price we were putting an offer in at.)
So we put in our first offer on a new home in a development (last year's offer to a builder was not in a new home development, it was more of a one off type deal). Our offer was only 5% below asking, so I don't feel we are being unreasonable. After all, they already received a 5k deposit on it from the previous buyers, and if we had come in with our realtor the first time we visited, they would have given him 5k as well.
So now we wait.
(The part that was most disconcerting about this offer process was, they didn't care/ask or want any documentation about the financing, like what our credit is, or if we have any money down etc., all they really wanted to know what what price we were putting an offer in at.)
Nov-Dec 2008 Month's Inventory for Sacramento Metro Area
Well, I couldn't help myself, I gathered inventory data for the Sacramento Metro area this month. Below is a comparison of this year versus last year. Month's inventory is way down. For most zips its below the 6 month mark, which is traditionally heralded as equilibrium.
Yet, if we are truly at equilibrium, prices should not be dropping at a double digit pace. So this leads to my big question...is 6 months inventory still equilibrium? With few buyer's who can qualify for loans, I am inclined to think that 4 months is the new 6 months.
Data is sorted by the change in month's inventory from year to year (third column). Inventory data is collected from ZipRealty for single family homes, and the resale data is from DataQuick via the SacBee.
Hope everyone had a happy and safe holiday.
Yet, if we are truly at equilibrium, prices should not be dropping at a double digit pace. So this leads to my big question...is 6 months inventory still equilibrium? With few buyer's who can qualify for loans, I am inclined to think that 4 months is the new 6 months.
Data is sorted by the change in month's inventory from year to year (third column). Inventory data is collected from ZipRealty for single family homes, and the resale data is from DataQuick via the SacBee.
Hope everyone had a happy and safe holiday.
Sunday, December 21, 2008
Articulating 2009
Here is a link to the round table story in the Sacramento Bee.
I sound "kind of" very inarticulate, as if I can't complete a sentence properly. I will chock it up to all the drugs I was taking at the time for my cold (knowing full well that I totally overuse that phrase). This is why I feel for all the politicians and celebrities whose every word is subject to public scrutiny. It takes a lot of practice to be articulate all of the time. Luckily for me, I can revise and spell check.
For those who might be finding this blog for the first time....here is a link to my slightly more articulate comments, as well as the comments, predictions and insights of others who watch the market with me.
I think the comments over at the Sac Bee have already started shredding everyone involved (some deservedly so.....but I will refrain from commenting more than that).
I sound "kind of" very inarticulate, as if I can't complete a sentence properly. I will chock it up to all the drugs I was taking at the time for my cold (knowing full well that I totally overuse that phrase). This is why I feel for all the politicians and celebrities whose every word is subject to public scrutiny. It takes a lot of practice to be articulate all of the time. Luckily for me, I can revise and spell check.
For those who might be finding this blog for the first time....here is a link to my slightly more articulate comments, as well as the comments, predictions and insights of others who watch the market with me.
I think the comments over at the Sac Bee have already started shredding everyone involved (some deservedly so.....but I will refrain from commenting more than that).
Saturday, December 20, 2008
November 2008 - Folsom and El Dorado Hills
It's been a couple months since I last posted the historical price and sales volume data. Below are the charts updated with the November 2008 data.
Note that the DataQuick/SacBee data is resales only, and the Melissa data likely includes new homes.
Speaking of homes, with Christmas fast approaching, I thought Santa might need a gentle reminder, that my wish list hasn't changed much. Unfortunately it went unfulfilled in 2008.
Note that the DataQuick/SacBee data is resales only, and the Melissa data likely includes new homes.
Speaking of homes, with Christmas fast approaching, I thought Santa might need a gentle reminder, that my wish list hasn't changed much. Unfortunately it went unfulfilled in 2008.
Tuesday, December 16, 2008
California Here I Come....
Just another, of the many many reasons we moved back to California......
The University of Michigan compiled a list of metro areas based on their cooling and heating demand (the less demand, the better the rank). Sacramento was ranked 6 out of 50, only to be beat out by other cities in California (hat tip WSJ Developments blog).
I would hate to think of what my utility bill would look like if we were ranked 50! Of course "demand" and costs are not always related. Just look at the difference between PG&E and SMUD.
The University of Michigan compiled a list of metro areas based on their cooling and heating demand (the less demand, the better the rank). Sacramento was ranked 6 out of 50, only to be beat out by other cities in California (hat tip WSJ Developments blog).
I would hate to think of what my utility bill would look like if we were ranked 50! Of course "demand" and costs are not always related. Just look at the difference between PG&E and SMUD.
Saturday, December 13, 2008
A realtor, a broker, a builder, and a buyer walk into a room...
As some of you have already surmised, last week I attended a real estate round table hosted by the Sacrament Bee.
A quick caveat before I make some observations, the investor/bottom caller dropped out with the flu (probably not a bad thing as he was likely to get beat up). I was on the verge of dropping out, having come down with a mutant form of Strep on Monday. But I washed my hands thoroughly and pressed on, in a heavily drugged state (antibiotics, Advil, and decongestant). So needless to say I am not sure my arguments were coherent, let alone cohesive.
Overall, it was a very civil, and lively discussion, with each person bringing a unique viewpoint to the table (an agent, a broker/credit, a building consultant, me, and several from the Bee). Without divulging the details, the story is supposed to run in next Sunday's paper, I wanted to make a couple of observations.
This group has hindsight clearly in their favor. Back in late 2006/early 2007 I couldn't find a RE agent (and we looked hard) that would tell me a home was overpriced, nor could I find a broker who would only give me a quote for a 30yr fixed loan (2 other quotes that lowered my monthly payment always seemed to come with it). So its interesting to see how history gets revised. Of course I didn't know these particular individuals at the time, so I can't say for certain.
Early in the conversation the effect of lower interest rates came up (and whether it would stimulate more demand). So I threw out a somewhat standard line, that a smart buyer would wait till prices decreased further, thus paying taxes on lower principle, because they can always refinance when interest rates move lower. Idea being, you can always lower your interest rate, but not your principle. This idea went over like a lead balloon. Perhaps I didn't phrase it properly?
At one point in the conversation the mortgage/credit guy, Michael, suggested I was throwing away money by renting since there are tax benefits to owning. We have discussed this before, and basically agreed that tax benefits merely defray some of the many additional costs associated with owning a home (insurance, property taxes, HOA, Mello-Roos, maintenance). I include the tax benefits in my rent/buy calculations, at current prices, we are way still better off renting than purchasing a comparable home.
When I let on that I had 20% as a down payment, realtor Ruben, seemed to think the world was my oyster. Unfortunately, this has not been our experience. 20% down, and no contingency (no home to sell first), doesn't seem to make a lick of difference when we present our offers to a bank or builder.
Of course, the "when is bottom" question came up. And while I did give an answer (over a year away with no appreciation for some time...but the price declines will moderate considerably as we approach bottom) there was no time to get into the discussion of how different areas of the city will bottom at different times. This is a finer point, but one that I like to emphasize since it is important for buyers.
In all it was an enjoyable discussion (and that's not just the drugs talking), and as an added bonus we were led on a tour of the newsroom. I'm a bit anxious about reading the comments when the piece comes out, some of the people who comment on Sac Bee stories are super angry mean. So much for "love thy neighbor."
A quick caveat before I make some observations, the investor/bottom caller dropped out with the flu (probably not a bad thing as he was likely to get beat up). I was on the verge of dropping out, having come down with a mutant form of Strep on Monday. But I washed my hands thoroughly and pressed on, in a heavily drugged state (antibiotics, Advil, and decongestant). So needless to say I am not sure my arguments were coherent, let alone cohesive.
Overall, it was a very civil, and lively discussion, with each person bringing a unique viewpoint to the table (an agent, a broker/credit, a building consultant, me, and several from the Bee). Without divulging the details, the story is supposed to run in next Sunday's paper, I wanted to make a couple of observations.
This group has hindsight clearly in their favor. Back in late 2006/early 2007 I couldn't find a RE agent (and we looked hard) that would tell me a home was overpriced, nor could I find a broker who would only give me a quote for a 30yr fixed loan (2 other quotes that lowered my monthly payment always seemed to come with it). So its interesting to see how history gets revised. Of course I didn't know these particular individuals at the time, so I can't say for certain.
Early in the conversation the effect of lower interest rates came up (and whether it would stimulate more demand). So I threw out a somewhat standard line, that a smart buyer would wait till prices decreased further, thus paying taxes on lower principle, because they can always refinance when interest rates move lower. Idea being, you can always lower your interest rate, but not your principle. This idea went over like a lead balloon. Perhaps I didn't phrase it properly?
At one point in the conversation the mortgage/credit guy, Michael, suggested I was throwing away money by renting since there are tax benefits to owning. We have discussed this before, and basically agreed that tax benefits merely defray some of the many additional costs associated with owning a home (insurance, property taxes, HOA, Mello-Roos, maintenance). I include the tax benefits in my rent/buy calculations, at current prices, we are way still better off renting than purchasing a comparable home.
When I let on that I had 20% as a down payment, realtor Ruben, seemed to think the world was my oyster. Unfortunately, this has not been our experience. 20% down, and no contingency (no home to sell first), doesn't seem to make a lick of difference when we present our offers to a bank or builder.
Of course, the "when is bottom" question came up. And while I did give an answer (over a year away with no appreciation for some time...but the price declines will moderate considerably as we approach bottom) there was no time to get into the discussion of how different areas of the city will bottom at different times. This is a finer point, but one that I like to emphasize since it is important for buyers.
In all it was an enjoyable discussion (and that's not just the drugs talking), and as an added bonus we were led on a tour of the newsroom. I'm a bit anxious about reading the comments when the piece comes out, some of the people who comment on Sac Bee stories are super angry mean. So much for "love thy neighbor."
Sunday, December 7, 2008
Short Run Solutions
As Keynes was quoted as saying, "In the long run, we are all dead." With that in mind, lets look at the short run. Right now interest rates are at the lowest level I've seen since I started tracking them. Compared to rates earlier in the year, current rates could lead to almost $300 savings a month given our specifics.
In the short run, low interest rates are great for everyone. Buyers pay less each month, or can afford more house for their money. Home owners with ARMs, who are not already under water, can refinance into a low fixed rate mortgage. Thus low interest rates both increase demand, and help lower the distressed supply.
Lest we forget, low interest rates were one of the culprits fueling the housing bubble. Longer term, we will still have to ween ourselves from our low rate addiction, leading to the economic shakes. (I know some of the hardcore econ folks tackled this issue, but I had a sick kid all week, so no time for reading up).
With all the $$ being thrown around by the fed, inflation is bound to kick in, thus interest rates will inevitably be raised. Once again, we will be faced with housing market problems as demand dries up, but hopefully by then, all the toxic loans will be out of the system (either through refi, modification or foreclosure) leaving us with a slightly less onerous housing downturn.
In the short run, low interest rates are great for everyone. Buyers pay less each month, or can afford more house for their money. Home owners with ARMs, who are not already under water, can refinance into a low fixed rate mortgage. Thus low interest rates both increase demand, and help lower the distressed supply.
Lest we forget, low interest rates were one of the culprits fueling the housing bubble. Longer term, we will still have to ween ourselves from our low rate addiction, leading to the economic shakes. (I know some of the hardcore econ folks tackled this issue, but I had a sick kid all week, so no time for reading up).
With all the $$ being thrown around by the fed, inflation is bound to kick in, thus interest rates will inevitably be raised. Once again, we will be faced with housing market problems as demand dries up, but hopefully by then, all the toxic loans will be out of the system (either through refi, modification or foreclosure) leaving us with a slightly less onerous housing downturn.
Thursday, December 4, 2008
Average Buyer's Crystal Ball
Being the ever opinionated person that I am, I was asked to participate in a year-end forum on the Sacramento housing market. I’m sure one of the big questions on everyone’s mind will be: “What the future holds in store for our metro area.”
With that in mind, I would love to hear everyone’s predictions if they dare*…..for the 1 year mark and 5 year mark. Here are some of mine (I did my best to keep it short):
1 Year – As banks complied with the legislated wait period in California, new NOD activity slowed to a crawl in the fall of 2008. This means the pipeline of foreclosures will temporarily dry up sometime in early to mid-2009. Together with inventory down significantly, this should lead to stabilization in prices for at least a couple months. But slowed economic activity and job losses will take a toll on the local economy. Excess housing inventory and frustrated sellers, will keep downward pressure on rents. As a result, by the end of the year home prices will continue their downward march, eventually surpassing what I consider affordable/sustainable levels (based on historical price/rent ratios and income).
5 Year –The economy will experience the deepest slump since the Great Depression, as consumers and companies undergo painful deleveraging. The Sacramento market will not be spared. However its housing market will stabilize before the rest of the country, as home prices have dropped the hardest and fastest here. Our local economy will also recover sooner than others, buoyed by relatively stable government employment, and a stabilized and affordable housing market. In terms of time lines…..next year home prices will level off then continue to fall to affordable levels, with years 2-4 seeing no increase, and perhaps single digit decreases, in prices as excess and distressed inventory are absorbed. Finally in year 5, modest appreciation will be possible as the housing market and local economy eventually find their footing.
Unfortunately I see no end in sight to the economic troubles our country is facing. Of course the big wild card in all this is the government’s response, which can drastically change the timeline, but not necessarily the forestall end result. I do however consider myself optimistic on our local housing market. I know of several first time buyers getting into the market now distressed inventory has made select areas of Sac accessible (note that I used the term accessible and not affordable).
*Making public predictions is a pretty tough gambit, as we have been through quite a roller coaster this last year, between wildly fluctuating commodity prices, a change in administration, and the demise of the investment banking industry, it’s hard to imagine what the future has in store for us.
With that in mind, I would love to hear everyone’s predictions if they dare*…..for the 1 year mark and 5 year mark. Here are some of mine (I did my best to keep it short):
1 Year – As banks complied with the legislated wait period in California, new NOD activity slowed to a crawl in the fall of 2008. This means the pipeline of foreclosures will temporarily dry up sometime in early to mid-2009. Together with inventory down significantly, this should lead to stabilization in prices for at least a couple months. But slowed economic activity and job losses will take a toll on the local economy. Excess housing inventory and frustrated sellers, will keep downward pressure on rents. As a result, by the end of the year home prices will continue their downward march, eventually surpassing what I consider affordable/sustainable levels (based on historical price/rent ratios and income).
5 Year –The economy will experience the deepest slump since the Great Depression, as consumers and companies undergo painful deleveraging. The Sacramento market will not be spared. However its housing market will stabilize before the rest of the country, as home prices have dropped the hardest and fastest here. Our local economy will also recover sooner than others, buoyed by relatively stable government employment, and a stabilized and affordable housing market. In terms of time lines…..next year home prices will level off then continue to fall to affordable levels, with years 2-4 seeing no increase, and perhaps single digit decreases, in prices as excess and distressed inventory are absorbed. Finally in year 5, modest appreciation will be possible as the housing market and local economy eventually find their footing.
Unfortunately I see no end in sight to the economic troubles our country is facing. Of course the big wild card in all this is the government’s response, which can drastically change the timeline, but not necessarily the forestall end result. I do however consider myself optimistic on our local housing market. I know of several first time buyers getting into the market now distressed inventory has made select areas of Sac accessible (note that I used the term accessible and not affordable).
*Making public predictions is a pretty tough gambit, as we have been through quite a roller coaster this last year, between wildly fluctuating commodity prices, a change in administration, and the demise of the investment banking industry, it’s hard to imagine what the future has in store for us.
Monday, December 1, 2008
Tribute to Tanta
I was deeply moved yesterday to read that Tanta had passed away (she is a co-blogger at my favorite non-local blog, Calculated Risk).
So young, smart and witty. I will miss her.
A reminder to us all, to cherish our time with friends and families.
So young, smart and witty. I will miss her.
A reminder to us all, to cherish our time with friends and families.
Wednesday, November 26, 2008
Something to Chew On
As some of you may recall, for the past couple months, there has been very little NOD activity in the markets I track. The NOD count for Folsom, El Dorado Hills and Auburn, has basically been halved.
Prior to today, I attributed this drop-off to the new law that became effective in California, SB1137. But, best I can tell, that law only added 45 days to the process. Thus we would have expected a pick up in NOD activity around late-October, as lenders complied with the law that became effective Sept, 8, 2008.
But here is where my conspiracy minded brain starts to ruminate. It wasn't till this week, 75 days, after SB1137 went into effect, that I began to see a pick up in NOD activity. Hmm, perhaps these lenders were holding their breath, waiting for the government to relieve them of these troubled assets.
When Paulson announced that the TARP funds were no longer going to be used to purchase mortgage-assets, they went back to business as usual. This idea came to mind, primarily because I had heard rumors in the blogosphere that Countrywide was not foreclosing or sending NODs while it was in the process of being bought by BofA. No idea if any of this is true or even possible, but it does seem like a plausible explanation given the timing.
Coincidence or conspiracy......thoughts?
_________________________
So does anyone know what has happened to Housing Tracker? It was one of my favorite sites for historical context and housing statistics.
Prior to today, I attributed this drop-off to the new law that became effective in California, SB1137. But, best I can tell, that law only added 45 days to the process. Thus we would have expected a pick up in NOD activity around late-October, as lenders complied with the law that became effective Sept, 8, 2008.
But here is where my conspiracy minded brain starts to ruminate. It wasn't till this week, 75 days, after SB1137 went into effect, that I began to see a pick up in NOD activity. Hmm, perhaps these lenders were holding their breath, waiting for the government to relieve them of these troubled assets.
When Paulson announced that the TARP funds were no longer going to be used to purchase mortgage-assets, they went back to business as usual. This idea came to mind, primarily because I had heard rumors in the blogosphere that Countrywide was not foreclosing or sending NODs while it was in the process of being bought by BofA. No idea if any of this is true or even possible, but it does seem like a plausible explanation given the timing.
Coincidence or conspiracy......thoughts?
_________________________
So does anyone know what has happened to Housing Tracker? It was one of my favorite sites for historical context and housing statistics.
Monday, November 24, 2008
If you Insist
As many of you know, I am not real keen on the government deciding who wins and who loses in the marketplace. I prefer the government to create a business environment with a level and equitable playing field (through regulation and oversight).
If the government insists on getting involved, I normally prefer to rescue people (providing safety nets, like unemployment and retraining), and not corporations (i.e. the big 3 now begging for a handout).
There seems to be a growing chorus for the government to get to the "root" of the economic problem: the housing market. My earlier recommendations, are still highly relevant, but I have some additional observations, based on recent data.
Today on Calculated Risk, there was an excerpt stating over 50% of modifications are defaulting. This is a rather astonishing number, and makes me wonder if workouts are really worth pursuing. It suggests that workouts only prolong the housing correction, as many of us have suggested. (For the record, I do support workouts for people who bought their home using at least 10% of their own money, paid their own closing costs, and whose income situation has not changed materially.)
Today's WSJ discusses a new tactic, help the buyers, instead of the owners. Of course, given my situation, I am a rather biased in favor demand-side solutions. However I think it has some legitimate merits as well. Offering subsided interest rates to home buyers, basically neutralizes my gripe from last week (home buyers have to pay market rates for mortgages and market value for homes, while workouts "homeowners" receive below market interest and principle).
So if the government insists on meddling in the housing market (which they have already done to a large degree), leveling the playing field so that buyers and owners enjoy the same perks, seems like an entirely reasonable thing to do.
If the government insists on getting involved, I normally prefer to rescue people (providing safety nets, like unemployment and retraining), and not corporations (i.e. the big 3 now begging for a handout).
There seems to be a growing chorus for the government to get to the "root" of the economic problem: the housing market. My earlier recommendations, are still highly relevant, but I have some additional observations, based on recent data.
Today on Calculated Risk, there was an excerpt stating over 50% of modifications are defaulting. This is a rather astonishing number, and makes me wonder if workouts are really worth pursuing. It suggests that workouts only prolong the housing correction, as many of us have suggested. (For the record, I do support workouts for people who bought their home using at least 10% of their own money, paid their own closing costs, and whose income situation has not changed materially.)
Today's WSJ discusses a new tactic, help the buyers, instead of the owners. Of course, given my situation, I am a rather biased in favor demand-side solutions. However I think it has some legitimate merits as well. Offering subsided interest rates to home buyers, basically neutralizes my gripe from last week (home buyers have to pay market rates for mortgages and market value for homes, while workouts "homeowners" receive below market interest and principle).
So if the government insists on meddling in the housing market (which they have already done to a large degree), leveling the playing field so that buyers and owners enjoy the same perks, seems like an entirely reasonable thing to do.
Wednesday, November 19, 2008
November Market Stress Update for 95762, 95630, 95602, 95603
You know you are a nerd, when you are pissed off about work, so you play with housing data to help get you mind off things.
Anyways, here is the latest market stress update for El Dorado Hills, Folsom, and now Auburn. I wanted to include the monthly sales too, but it was just too much data on one slide, so I have attached the sales data separately (that MCB had sent me earlier...thanks again!). Do take the time to compare the monthly sales numbers to the NOD & REO levels.....if I had more time I would have done some combinations, but unfortunately I am really short on time these days.
As you can see, NODs have been stopped in their tracks by the recent CA legislation. Few new NODs are being filed, while old ones are getting resolved or reverting to REO status (notice the steady rise in REOs).
Just noticed I didn't label the data legend very well. It is the sales price bin in thousands of dollars. The data was rounded for ease of aggregating, so the "300" bin, is actually comprised of homes that sold from $250,000 to $350,000.
Anyways, here is the latest market stress update for El Dorado Hills, Folsom, and now Auburn. I wanted to include the monthly sales too, but it was just too much data on one slide, so I have attached the sales data separately (that MCB had sent me earlier...thanks again!). Do take the time to compare the monthly sales numbers to the NOD & REO levels.....if I had more time I would have done some combinations, but unfortunately I am really short on time these days.
As you can see, NODs have been stopped in their tracks by the recent CA legislation. Few new NODs are being filed, while old ones are getting resolved or reverting to REO status (notice the steady rise in REOs).
Just noticed I didn't label the data legend very well. It is the sales price bin in thousands of dollars. The data was rounded for ease of aggregating, so the "300" bin, is actually comprised of homes that sold from $250,000 to $350,000.
Friday, November 14, 2008
Going Public
Not sure I should do this......but I suppose everyone in the RE industry does (with their pictures on their cards).
So if you happen to see me on the street or at an open house, please say "hi", and offer me a smoking deal on your home.
Speaking of homes, there is a foreclosure back on the market I am trying to talk Mr.BT into. Haven't seen the inside yet, but the stats (do-able on one salary) and pics look good.
So if you happen to see me on the street or at an open house, please say "hi", and offer me a smoking deal on your home.
Speaking of homes, there is a foreclosure back on the market I am trying to talk Mr.BT into. Haven't seen the inside yet, but the stats (do-able on one salary) and pics look good.
Thursday, November 13, 2008
Why Punish the Prudent?
Dear Lawmakers –
I have a couple questions I was hoping you could answer. Why is it that people, who put little to no money down on a home, are now eligible for 2.5% interest backed by the government, and principle reductions of 90% to market?
We would love to purchase a home using a 20% down payment, however all we can find are interest rates at 6% or higher, and market home prices? It seems to me that those of us who have excellent credit scores, and down-payments are actually being punished and asked to pay more when compared to others.
I honestly don’t mind the government helping out actual homeowners. However, I don’t consider someone a homeowner unless they put more than 10% down when purchasing their home.
So all this talk about keeping people in “their” homes, seems like rhetoric aimed at people’s heartstrings. How am I, a renter, any different than someone who moved into a home with little to no money down? For a renter, it’s called a deposit, but for these “homeowners” it’s called closing costs. Yet paying closing costs, now entitles them to lots of special government subsidies that I am not eligible for.
As I am sure you are aware, rewriting loans to keep people in “their” homes, will prolong the pain and keep home prices higher than they would otherwise be. If a loan is rewritten, the government /lender should be required to record the new principle balance with the county, so that us home buyers can at least benefit from the lower more affordable comp.
As evidenced in many parts of Sacramento, the housing market is not broke. People will buy homes once they become affordable (using responsible lending products). Right now homes under $250,000 in our area are receiving multiple bids.
Letting the market adjust back to affordable levels has many benefits. If people are spending less on housing, they will have more disposable income to fuel the economy. It also means people can buy homes closer to work, as opposed to distant suburbs. This had a dual benefit because it will cut emissions and energy demand, while allowing people to spend more time with their loved ones and less time commuting.
Best of luck saving the economy,
Your Average Buyer
I have a couple questions I was hoping you could answer. Why is it that people, who put little to no money down on a home, are now eligible for 2.5% interest backed by the government, and principle reductions of 90% to market?
We would love to purchase a home using a 20% down payment, however all we can find are interest rates at 6% or higher, and market home prices? It seems to me that those of us who have excellent credit scores, and down-payments are actually being punished and asked to pay more when compared to others.
I honestly don’t mind the government helping out actual homeowners. However, I don’t consider someone a homeowner unless they put more than 10% down when purchasing their home.
So all this talk about keeping people in “their” homes, seems like rhetoric aimed at people’s heartstrings. How am I, a renter, any different than someone who moved into a home with little to no money down? For a renter, it’s called a deposit, but for these “homeowners” it’s called closing costs. Yet paying closing costs, now entitles them to lots of special government subsidies that I am not eligible for.
As I am sure you are aware, rewriting loans to keep people in “their” homes, will prolong the pain and keep home prices higher than they would otherwise be. If a loan is rewritten, the government /lender should be required to record the new principle balance with the county, so that us home buyers can at least benefit from the lower more affordable comp.
As evidenced in many parts of Sacramento, the housing market is not broke. People will buy homes once they become affordable (using responsible lending products). Right now homes under $250,000 in our area are receiving multiple bids.
Letting the market adjust back to affordable levels has many benefits. If people are spending less on housing, they will have more disposable income to fuel the economy. It also means people can buy homes closer to work, as opposed to distant suburbs. This had a dual benefit because it will cut emissions and energy demand, while allowing people to spend more time with their loved ones and less time commuting.
Best of luck saving the economy,
Your Average Buyer
Thursday, October 30, 2008
Local Builders Behaving Badly?
From the Mountain Democrat:
"West County home-building company known for constructing multi-million dollar homes in Serrano has been accused by one of its clients of fraud and forgery.
Ultimate Development Inc., an El Dorado Hills-based company that reported $13.5 million in construction activity in 2007, is not only being sued by Serrano homeowners Robert Keszler and Jennifer Cutts Keszler, but is also being investigated by the State Contractors License Board.
..........
The state licensing board is investigating what it calls a probable violation for a willful or fraudulent act that leads to substantial harm, theft and forgery. The investigation stemmed from a complaint being filed by an unknown party. "
"West County home-building company known for constructing multi-million dollar homes in Serrano has been accused by one of its clients of fraud and forgery.
Ultimate Development Inc., an El Dorado Hills-based company that reported $13.5 million in construction activity in 2007, is not only being sued by Serrano homeowners Robert Keszler and Jennifer Cutts Keszler, but is also being investigated by the State Contractors License Board.
..........
The state licensing board is investigating what it calls a probable violation for a willful or fraudulent act that leads to substantial harm, theft and forgery. The investigation stemmed from a complaint being filed by an unknown party. "
Wednesday, October 29, 2008
Making a Move
Now that we are no longer actively looking to purchase a home, Mr. BT and I have been struggling with whether to find a less expensive rental that would suit our family better for the long haul. Our current rental is much larger than we need, and we hear the local elementary school is impacted which may force us to drive our daughter across town every day (all this for only three hours of kindergarten).
But moving involves a lot of trade offs in terms of time and $$. The premise is based on two questions that we continually struggle with. How much rent savings justifies the move, and how long do we need to be in the new rental to make the rent savings worth it. There is a lot of time and hassle involved in a move, and some expense (moving costs, utilities etc.).
Moving a family of four is not something I take lightly, even if it is a local move. My kids are too young to be of any help. In fact, they have a special knack for unpacking and destroying any semblance of order. Which will likely make moving more even more difficult.
Its not like our current economic climate will last forever....I am hoping we will know by spring how bad and how long of a recession we are in for (V, U, or L shaped recession). Perhaps by spring prices on the higher end (most of the homes in East Sac, Davis, Arden, CP, EDH, and Folsom) will finally be in line with the rest of the market (Pending Sales are way down according to my weekly screen scrape). According to Housing Tracker, the 75th percentile has started moving downward again, after a bounce earlier in the year.
We aren't too far from what I consider equilibrium (based on income and rent multipliers etc.). However an "L" shaped recession could easily push us past that point.
But moving involves a lot of trade offs in terms of time and $$. The premise is based on two questions that we continually struggle with. How much rent savings justifies the move, and how long do we need to be in the new rental to make the rent savings worth it. There is a lot of time and hassle involved in a move, and some expense (moving costs, utilities etc.).
Moving a family of four is not something I take lightly, even if it is a local move. My kids are too young to be of any help. In fact, they have a special knack for unpacking and destroying any semblance of order. Which will likely make moving more even more difficult.
Its not like our current economic climate will last forever....I am hoping we will know by spring how bad and how long of a recession we are in for (V, U, or L shaped recession). Perhaps by spring prices on the higher end (most of the homes in East Sac, Davis, Arden, CP, EDH, and Folsom) will finally be in line with the rest of the market (Pending Sales are way down according to my weekly screen scrape). According to Housing Tracker, the 75th percentile has started moving downward again, after a bounce earlier in the year.
We aren't too far from what I consider equilibrium (based on income and rent multipliers etc.). However an "L" shaped recession could easily push us past that point.
Wednesday, October 22, 2008
Weekly Screen Scrape - Another Milestone
Homes in my weekly screen scrape have broken through another barrier. There are now 2 homes that meet our criteria (in 95630 or 95762) listed below the 300k mark (and 41 homes between 300-400k).
This is encouraging news for us, as we would only consider homes we can afford on one salary at this point.
Since January of this year, price per square foot of homes in my screen scrape has fallen by 11%. However there is a great deal of disparity out there. Price per square foot ranges from $114, to $235. With EDH primarily on the lower end, and Folsom primarily on the higher end (if I had to guess this is due to home size and extra taxes/fees that EDH homes tend to have).
This is encouraging news for us, as we would only consider homes we can afford on one salary at this point.
Since January of this year, price per square foot of homes in my screen scrape has fallen by 11%. However there is a great deal of disparity out there. Price per square foot ranges from $114, to $235. With EDH primarily on the lower end, and Folsom primarily on the higher end (if I had to guess this is due to home size and extra taxes/fees that EDH homes tend to have).
Sunday, October 19, 2008
Registration Deadline
Just a friendly reminder that the deadline for California voter registration is Monday. For more information see the Secretary of State website.
It may not always feel like it, but we live in a democracy. For our government to be effective, citizens need to be informed, participate and vote.
No complaining if you don't vote.
It may not always feel like it, but we live in a democracy. For our government to be effective, citizens need to be informed, participate and vote.
No complaining if you don't vote.
Thursday, October 16, 2008
The Day, the Music Died
I am now on the books for a 40 hour work week. This leaves me with less time to think about, and collect data on our local housing market. Separate, but certainly related, due to economic events way beyond our control, we have decided to put our home search on hold.
Thus I will be posting very infrequently from here on out (but hopefully once a week), until we decide to start up our search again. The timing seems apropos, seeing as how national economic events have completely overtaken our local housing market.
I don’t plan to continue tracking home inventory and the subsequent month’s inventory by zip code any more. Both metrics have become rather useless lately due to the influence of distressed inventory. The monthly screen scrape will continue, but I don’t plan on reporting results unless they are in some way significant.
To the tune of American Pie:
__________________________
A long, long time ago...I can still remember how
That housing data used to make me smile.
And I knew if I had my chance,
That I could make those people dance,
And maybe they'd be happy for a while.
But October made me shiver,
With every blog post I'd deliver,
Bad news on the RSS feed...
I couldn't take one more deed.
I can't remember if I cried
When I read about our wild ride
But something touched me deep inside,
The day the music died.
Soo..Bye, bye miss Average Buyer
Drove my Chevy to the levee but the levee was no higher
And good ol' boys predicting it could get dire
Singing no time to wallow in the mire,
no more time to wallow in the mire.
________________________
Best to all, on surviving our wild ride.
Thus I will be posting very infrequently from here on out (but hopefully once a week), until we decide to start up our search again. The timing seems apropos, seeing as how national economic events have completely overtaken our local housing market.
I don’t plan to continue tracking home inventory and the subsequent month’s inventory by zip code any more. Both metrics have become rather useless lately due to the influence of distressed inventory. The monthly screen scrape will continue, but I don’t plan on reporting results unless they are in some way significant.
To the tune of American Pie:
__________________________
A long, long time ago...I can still remember how
That housing data used to make me smile.
And I knew if I had my chance,
That I could make those people dance,
And maybe they'd be happy for a while.
But October made me shiver,
With every blog post I'd deliver,
Bad news on the RSS feed...
I couldn't take one more deed.
I can't remember if I cried
When I read about our wild ride
But something touched me deep inside,
The day the music died.
Soo..Bye, bye miss Average Buyer
Drove my Chevy to the levee but the levee was no higher
And good ol' boys predicting it could get dire
Singing no time to wallow in the mire,
no more time to wallow in the mire.
________________________
Best to all, on surviving our wild ride.
Tuesday, October 14, 2008
Hitting our Home Away From Home
Our household received some very shocking news this morning. Our daycare was closing two of its classrooms, including the one our son is in. Apparently, California's tough economic times have now trickled down to the service sector. The daycare/preschool has seen their enrollment drop substantially with parents getting laid off, or looking for less expensive care etc.
We just found out today and have to find care by next week. I'm in serious shock.
One of biggest factors influencing our home search in foothill communities along the 50 corridor, is the fact that we really like our daycare/preschool situation.
We just found out today and have to find care by next week. I'm in serious shock.
One of biggest factors influencing our home search in foothill communities along the 50 corridor, is the fact that we really like our daycare/preschool situation.
Monday, October 13, 2008
Can you Bank on It?
Last month we pulled our down payment out of a savings account at national bank (where we had banked online for the last 8 or so years) and put it into a regional institution. Call me paranoid, but I like the idea of having a branch office in times of turmoil.
Wondering how others feel about this national vs. regional issue when it comes to banking. Do you have a local/regional bank or credit union to recommend? Or do you feel big national banks like BofA are the way to go, since they are likely "too big to fail"? Or do you chase the best returns, wherever they may be?
I've never been one to shop banks.....I tend to be a creature of habit and convenience.
I understand the FDICs need to keep people from pulling their money out of troubled institutions, however it would be nice, to have some understandable and objective ratings as to an institution's liabilities and exposure. I used Bankrate's safe and sound ratings to check but they seemed kinda generic.
In particular, with the local/regional institutions, I worry about their commercial real estate exposure. It can't be a pretty picture. All I see around EDH is empty commercial space, with even more being built!
Wondering how others feel about this national vs. regional issue when it comes to banking. Do you have a local/regional bank or credit union to recommend? Or do you feel big national banks like BofA are the way to go, since they are likely "too big to fail"? Or do you chase the best returns, wherever they may be?
I've never been one to shop banks.....I tend to be a creature of habit and convenience.
I understand the FDICs need to keep people from pulling their money out of troubled institutions, however it would be nice, to have some understandable and objective ratings as to an institution's liabilities and exposure. I used Bankrate's safe and sound ratings to check but they seemed kinda generic.
In particular, with the local/regional institutions, I worry about their commercial real estate exposure. It can't be a pretty picture. All I see around EDH is empty commercial space, with even more being built!
Friday, October 10, 2008
Two Year Anniversary
This month will mark the beginning of our third year as renters in the Sacramento area. I still count my blessings that we didn't buy immediately after moving back to CA.
These are very somber times. According to yesterday's WSJ, California led the way into the recession. With all the job losses my friends and family have experienced, I am relieved to hear it's considered a recession around here, cause I would hate to think what things would look like if we hadn't hit recession territory yet.
Even though some bubble bloggers take joy in the aftermath, I am certainly not one of them. Although I must admit, its nice to know I didn't spend 60k on a top B-school education, only to find out everything I learned about fundamentals was rubbish.
But in every other sense, its absolutely no fun being right. I knew there was a housing bubble, and that stocks had gotten a bit out of control, not realizing the extent of the trouble we were in,. However I had no idea, when I wrote about it last October that we would be in such dire straits a year later.
Unfortunately, I am not seeing many factors kick in that will bring an end to the troubles we are experiencing. By my calculation, using today's Zillow data, our starter home in the D.C. area has at least another 10% to fall, in order to reach a somewhat reasonable level.
I guess the only bright spot right now is that oil and other commodities have retreated substantially. (I probably obsess over oil more than the next person, as my industry, aviation, lives and dies by the price of oil).
Rant on/
Of course this couldn't happen at a worse time. If other government agencies are like the one I work with, so much forward progress is on hold waiting for the next administration. With the exception of the Treasury Department, the rest of the federal government seems to be in a 9 month paralysis. No one wants to make a decision or take action. From my perspective, this is incredibly frustrating, as we are wasting precious time.
/Rant off
These are very somber times. According to yesterday's WSJ, California led the way into the recession. With all the job losses my friends and family have experienced, I am relieved to hear it's considered a recession around here, cause I would hate to think what things would look like if we hadn't hit recession territory yet.
Even though some bubble bloggers take joy in the aftermath, I am certainly not one of them. Although I must admit, its nice to know I didn't spend 60k on a top B-school education, only to find out everything I learned about fundamentals was rubbish.
But in every other sense, its absolutely no fun being right. I knew there was a housing bubble, and that stocks had gotten a bit out of control, not realizing the extent of the trouble we were in,. However I had no idea, when I wrote about it last October that we would be in such dire straits a year later.
Unfortunately, I am not seeing many factors kick in that will bring an end to the troubles we are experiencing. By my calculation, using today's Zillow data, our starter home in the D.C. area has at least another 10% to fall, in order to reach a somewhat reasonable level.
I guess the only bright spot right now is that oil and other commodities have retreated substantially. (I probably obsess over oil more than the next person, as my industry, aviation, lives and dies by the price of oil).
Rant on/
Of course this couldn't happen at a worse time. If other government agencies are like the one I work with, so much forward progress is on hold waiting for the next administration. With the exception of the Treasury Department, the rest of the federal government seems to be in a 9 month paralysis. No one wants to make a decision or take action. From my perspective, this is incredibly frustrating, as we are wasting precious time.
/Rant off
Wednesday, October 8, 2008
Market Stress Update Oct 2008
Some interesting developments over the last month. Folsom foreclosures shot through the roof, and NODs are down. If I had to guess this is a direct result of the legislation recently passed which requires lenders in CA to contact the borrower (or something like that). Mr. Mortgage has a write up if you want more details.....and his observations mirror what is happening here.
If this is the case, then starting real soon, we should see a surge in NOD activity.
I also started tracking market stress in Auburn last month, and should have some sales statistics to pair up with the market stress data for next month's update (courtesy of MCB44).
If this is the case, then starting real soon, we should see a surge in NOD activity.
I also started tracking market stress in Auburn last month, and should have some sales statistics to pair up with the market stress data for next month's update (courtesy of MCB44).
Tuesday, October 7, 2008
401-Keg Plan
A little mid-day humor. If your 401 looks like mine, you could probably use it.
_______________________________________
RETIREMENT PLAN INVESTMENT TIP
If you had purchased $1000.00 of Fannie Mae one year ago, it would now be worth $31.00.
With Freddie Mac, you would have $37.25 left of the original $1000.
With Lehman Brothers, you would have less than $5.00 left.
If you had purchased $1000.00 of AIG stock you would have $44.00 left.
If you had purchased Bear Stearns, you would have nothing left
But, if you had purchased $1000.00 worth of beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling refund you would have $214.00. Based on the above, the best current investment advice is to drink heavily and recycle.
This is called the 401-Keg Plan.
_______________________________________
RETIREMENT PLAN INVESTMENT TIP
If you had purchased $1000.00 of Fannie Mae one year ago, it would now be worth $31.00.
With Freddie Mac, you would have $37.25 left of the original $1000.
With Lehman Brothers, you would have less than $5.00 left.
If you had purchased $1000.00 of AIG stock you would have $44.00 left.
If you had purchased Bear Stearns, you would have nothing left
But, if you had purchased $1000.00 worth of beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling refund you would have $214.00. Based on the above, the best current investment advice is to drink heavily and recycle.
This is called the 401-Keg Plan.
Historical Housing Data for Folsom & El Dorado Hills
For some reason the Sac Bee didn't post their Data Quick data by zip code, so all I have this month is Melissa Data. While Melissa Data is certainly better than nothing, it does tend to be erratic, as I believe it also captures new home sales.
I have heard those in the real estate profession claim that sale are up (implying that the market is on its way back), but as you can see from the charts below, they are nowhere near historical levels. Last year was a terrible year, so the fact that sales may be higher than last year is setting a really low bar. This is precisely why I like to get a broader historical perspective on the data.
Housing Tracker is showing a lot of stickiness at the 75% asking price range for the Sac Metro Area.
I have heard those in the real estate profession claim that sale are up (implying that the market is on its way back), but as you can see from the charts below, they are nowhere near historical levels. Last year was a terrible year, so the fact that sales may be higher than last year is setting a really low bar. This is precisely why I like to get a broader historical perspective on the data.
Housing Tracker is showing a lot of stickiness at the 75% asking price range for the Sac Metro Area.
Sunday, October 5, 2008
Surprisingly Savvy
For the last year and a half we have attended open homes when we don't have something scheduled on a Sunday afternoon.
Up till recently, I haven't been all that impressed with the Realtors we have met (yes I know, usually the junior folks looking to bring in business). Normally we get the typical "it's a great time to buy" routine. Sadly I often feel I know more about the local market forces than some of these professionals.
However at two recently open homes, bank owned homes in Serrano, we met very savvy and knowledgeable Realtors. It was so very refreshing to hear their take on the market.
In the past, maybe I was just looking for Realtor's that validated my world view......but these two guys, seemed to know the details of the broader market, and had some facts and data to back up their opinions. I am happily swayed by opinions that are backed with sound theories and data. Up till now, many of the Realtors I met rarely had much to back up their claims.
Perhaps its a sign of the times, maybe all the soccer mom Realtors have left the market, leaving only the seasoned veterans and business savvy. In any case, I was really pleased to have a real and honest conversation (up till now I only smiled and nodded, not wanting to argue why now is not really a good time to buy, especially at the price they were asking ).
Up till recently, I haven't been all that impressed with the Realtors we have met (yes I know, usually the junior folks looking to bring in business). Normally we get the typical "it's a great time to buy" routine. Sadly I often feel I know more about the local market forces than some of these professionals.
However at two recently open homes, bank owned homes in Serrano, we met very savvy and knowledgeable Realtors. It was so very refreshing to hear their take on the market.
In the past, maybe I was just looking for Realtor's that validated my world view......but these two guys, seemed to know the details of the broader market, and had some facts and data to back up their opinions. I am happily swayed by opinions that are backed with sound theories and data. Up till now, many of the Realtors I met rarely had much to back up their claims.
Perhaps its a sign of the times, maybe all the soccer mom Realtors have left the market, leaving only the seasoned veterans and business savvy. In any case, I was really pleased to have a real and honest conversation (up till now I only smiled and nodded, not wanting to argue why now is not really a good time to buy, especially at the price they were asking ).
Thursday, October 2, 2008
Homeowner bailouts
I've switched sides. I am now in favor of bailouts for homeowners, flippers, speculators, investors ... everyone! So if loans need to be written down (including in bankruptcy court), or interest forgiven, or interest reduced, or principal reduced, I'm all for it.
In return, each person being bailed out will sign an agreement to pay from any future sales proceeds, 80% of the profits to the lender who took the initial financial hit on the bailout. If they aren't willing to share the profits, then no bailout.
Paul
P. S. Although this is my original idea, I seriously doubt I am the first to think of it!
In return, each person being bailed out will sign an agreement to pay from any future sales proceeds, 80% of the profits to the lender who took the initial financial hit on the bailout. If they aren't willing to share the profits, then no bailout.
Paul
P. S. Although this is my original idea, I seriously doubt I am the first to think of it!
Wednesday, October 1, 2008
Oh....Range on the Home
Many of the online tools I use, while very helpful, do not allow you to specify a range (except for price). In most zip codes this would not be a problem, but in the land of largess along the 50 corridor, it can be somewhat frustrating.
In particular, a home size range is needed to weed out the enormous homes (over 3000 sqft.). I guess all the search tools assume that bigger is better, so they only let you specify the bottom of a range.
Of course in some small way, its nice to actually have this problem. Two years ago, a 3000+ home would never have shown up in my criteria.
In particular, a home size range is needed to weed out the enormous homes (over 3000 sqft.). I guess all the search tools assume that bigger is better, so they only let you specify the bottom of a range.
Of course in some small way, its nice to actually have this problem. Two years ago, a 3000+ home would never have shown up in my criteria.
Tuesday, September 30, 2008
A Hostage Crisis
The front page of yesterday's WSJ declared "Lehman's Demise Triggered Cash Crunch Around Globe". They are suggesting that Lehman's fall is what has caused such dire consequences.
I find all of this very disturbing. How did our economy become so fragile that any given financial institution's demise can precipitate world economic chaos? This is terrible policy from a national security point (among others).
September 11th was not a security breach, as the terrorists were allowed to have box cutters on planes. That event has changed the paradigm of how we view national security. We have spent billions of dollars and created new government organizations to shore up physical vulnerabilities and prevent this from happening again.
Yet one of our most cherished assets, our vibrant economy is left wide open and incredibly vulnerable. One of the main theories behind security and safety systems is to have several layers and redundancy, so that there is no single point of failure.
I now believe that our financial system is so weak, that an unfriendly government actor or wealthy group could easily plunge our economy into even deeper trouble and essentially hold our country hostage. I am deeply troubled by this fact, and hope that going forward we have learned our lesson, and do not allow an single company to be so vital to the U.S. economy that it has the power to hobble our great nation.
I find all of this very disturbing. How did our economy become so fragile that any given financial institution's demise can precipitate world economic chaos? This is terrible policy from a national security point (among others).
September 11th was not a security breach, as the terrorists were allowed to have box cutters on planes. That event has changed the paradigm of how we view national security. We have spent billions of dollars and created new government organizations to shore up physical vulnerabilities and prevent this from happening again.
Yet one of our most cherished assets, our vibrant economy is left wide open and incredibly vulnerable. One of the main theories behind security and safety systems is to have several layers and redundancy, so that there is no single point of failure.
I now believe that our financial system is so weak, that an unfriendly government actor or wealthy group could easily plunge our economy into even deeper trouble and essentially hold our country hostage. I am deeply troubled by this fact, and hope that going forward we have learned our lesson, and do not allow an single company to be so vital to the U.S. economy that it has the power to hobble our great nation.
Monday, September 29, 2008
The Beginning of the End
Watching today's market, and Congress, I am sufficiently freaked out right now. Enough to call off our home search until I feel we have a reasonable indication that our economy has found its footing.
Until today, we had renewed interest in the housing market, with lower interest rates, and some attractively priced homes. Now, I think it would be prudent to save our down payment for a rainy day (decade) fund. For me, renting in times of turmoil is also preferred. In case one of us looses our job, then we can look for a cheaper place to rent nearby or where ever we find work.
Of course I often change my mind, so if we do get serious about a home in the near future, it would have to be one we could afford on one salary.
Along the lines of economic survival, I also will be resuming a full-time work schedule with the start of the new fiscal year, so posting activity on Average Buyer is likely to suffer.
P.S. Does anyone know if the Sac Bee posted the DQ Sac metro sales by zip this month? I never saw them.
Until today, we had renewed interest in the housing market, with lower interest rates, and some attractively priced homes. Now, I think it would be prudent to save our down payment for a rainy day (decade) fund. For me, renting in times of turmoil is also preferred. In case one of us looses our job, then we can look for a cheaper place to rent nearby or where ever we find work.
Of course I often change my mind, so if we do get serious about a home in the near future, it would have to be one we could afford on one salary.
Along the lines of economic survival, I also will be resuming a full-time work schedule with the start of the new fiscal year, so posting activity on Average Buyer is likely to suffer.
P.S. Does anyone know if the Sac Bee posted the DQ Sac metro sales by zip this month? I never saw them.
Local Services - Recommendations
Off Topic Post -
Consider today's post an open thread for local services (doesn't have to be RE related) ......feel free to solicit or recommend, and try to be particular about the area you are looking in.
Background - I have put off a ton of errands lately, as our fiscal year close has been busier than usual, as well as my travel schedule. There are a couple things I desperately need to do, like go to the dentist and get my hair cut. Up till now, I have tried a several places, but haven't been crazy about any of them. So far folks I have asked, have been rather luke warm in their recommendations which is why I figured I would tap into my HBB community.
Consider today's post an open thread for local services (doesn't have to be RE related) ......feel free to solicit or recommend, and try to be particular about the area you are looking in.
Background - I have put off a ton of errands lately, as our fiscal year close has been busier than usual, as well as my travel schedule. There are a couple things I desperately need to do, like go to the dentist and get my hair cut. Up till now, I have tried a several places, but haven't been crazy about any of them. So far folks I have asked, have been rather luke warm in their recommendations which is why I figured I would tap into my HBB community.
Saturday, September 27, 2008
Never Say Never - The Weekly Screen Scrape
It's coming up on two years that we have been back in Sac. When I first started tracking homes in Folsom and El Dorado Hills, there was a little over 40 that met our criteria, and the average price per square foot was around $224. Fast forward and there are now over 120 homes that meet our criteria (which has changed slightly, but same price point), and the average price per square foot has dropped below $180.
Back when we first moved here, I never thought we would be able to afford a home around here. This week, a home on my favorite street dropped into our price range. Never in my wildest dreams did I think we could afford something on that street.
As of the last couple weeks, I have seen some very attractively priced homes. One went PS before we could even check it out (Mr. BT was on travel)...bummer, cause it was perfect. I think we are getting pretty close to equilibrium around here, at least in my price range. I would say in the next 3-4 months we will be in solid equilibrium territory.
So the big question is, will we overshoot now that the economy is tanking and credit has dried up?
Back when we first moved here, I never thought we would be able to afford a home around here. This week, a home on my favorite street dropped into our price range. Never in my wildest dreams did I think we could afford something on that street.
As of the last couple weeks, I have seen some very attractively priced homes. One went PS before we could even check it out (Mr. BT was on travel)...bummer, cause it was perfect. I think we are getting pretty close to equilibrium around here, at least in my price range. I would say in the next 3-4 months we will be in solid equilibrium territory.
So the big question is, will we overshoot now that the economy is tanking and credit has dried up?
Friday, September 26, 2008
Conscience Un-Masqued
A week or two ago, I received an e-mail from a mom asking if I knew if Masque (in EDH) had closed. I assumed that it was perhaps a special event. But then someone else mentioned it as well.
I got home late last night, after being on the East Coast for a week, and saw a write up in the Village Life, that the local four star has closed its doors. There is a great deal of speculation as to why the restaurant closed down...apparently the owner isn't talking....but the article did mention "downright snarky blog entries" which got me worried that my gossip piece may have found a wider audience.
So I checked my Google statistics, the search term "Masque" never came up, only "swingers el dorado hills" and "bedroom community." So I am pretty sure my earlier entry, was not a contributing factor in all this.
I should mention that Mr. BT & I never went there, or to Z's bistro for that matter (which also closed its doors recently). I assume that is the more telling factor since we are local and haven't even eaten there.
I should also mention that the activity I referenced in my post was widely known and discussed in my mom's group. I even forbade Mr. BT from going there at happy hour due to the reputation.
The goal of this blog is not to do harm, but to inform and discuss. In the future, I will do my best to not share juicy gossip. For the record, I have restrained myself on countless occasions from excoriating those whose behavior shocks my conscience.
I got home late last night, after being on the East Coast for a week, and saw a write up in the Village Life, that the local four star has closed its doors. There is a great deal of speculation as to why the restaurant closed down...apparently the owner isn't talking....but the article did mention "downright snarky blog entries" which got me worried that my gossip piece may have found a wider audience.
So I checked my Google statistics, the search term "Masque" never came up, only "swingers el dorado hills" and "bedroom community." So I am pretty sure my earlier entry, was not a contributing factor in all this.
I should mention that Mr. BT & I never went there, or to Z's bistro for that matter (which also closed its doors recently). I assume that is the more telling factor since we are local and haven't even eaten there.
I should also mention that the activity I referenced in my post was widely known and discussed in my mom's group. I even forbade Mr. BT from going there at happy hour due to the reputation.
The goal of this blog is not to do harm, but to inform and discuss. In the future, I will do my best to not share juicy gossip. For the record, I have restrained myself on countless occasions from excoriating those whose behavior shocks my conscience.
Bank failures and the FDIC
The FDIC has a list of "troubled banks," with about 117 names on the non-public list. Does anyone find it troubling that neither IndyMac (4th largest failure?) or WaMu (largest failure ever) were not on the list? Something is wrong with this picture.
Paul
P.S. Judging from the erosion of their stock prices and the cost for credit default swaps, it looks like Wachovia, Downey and National City might be next in line.
Paul
P.S. Judging from the erosion of their stock prices and the cost for credit default swaps, it looks like Wachovia, Downey and National City might be next in line.
Thursday, September 25, 2008
So long as we are just giving away money ...
... that we don't have, and even though the $700 b Wall Street gift is not yet finalized, apparently some members of Congress are saying they are going to present a new +$50 b "economic stimulus plan" as early as this afternoon.
Is it just me, or does fiscal irresponsibility permeate American society from top to bottom, including corporations, politicians and everyone on my street who attempts to live beyond their means? Is this a result of too many years of entitlement mentality?
Paul
Is it just me, or does fiscal irresponsibility permeate American society from top to bottom, including corporations, politicians and everyone on my street who attempts to live beyond their means? Is this a result of too many years of entitlement mentality?
Paul
Wednesday, September 24, 2008
Bailout number xxx ...
Frankly, I've lost count of what number this week's bailout is. Although I am convinced we need to do something to prevent the total meltdown of the financial markets (for those of you who don't watch the markets daily, we came very close last week), I don't profess to know what the solution is. But, after watching C-Span, I do have some observations:
1. Congress would get a lot more done if there weren't cameras in the room, especially in an election year.
2. Although Paulson's plan doesn't include a bailout for homeowners, some pols are demanding bailouts for the homeowners too, apparently forgetting the $300 b homeowner bailout that Congress approved just a few months ago.
3. And although Paulson's plan doesn't include any caps on executive compensation, some members of Congress are determined to use this legislation as their stepping stone to take control over this aspect of corporate affairs. (This isn't new for those of you who recall Eliot Spitzer's failed attack against Richard Grasso's NYSE compensation package.)
Paul
1. Congress would get a lot more done if there weren't cameras in the room, especially in an election year.
2. Although Paulson's plan doesn't include a bailout for homeowners, some pols are demanding bailouts for the homeowners too, apparently forgetting the $300 b homeowner bailout that Congress approved just a few months ago.
3. And although Paulson's plan doesn't include any caps on executive compensation, some members of Congress are determined to use this legislation as their stepping stone to take control over this aspect of corporate affairs. (This isn't new for those of you who recall Eliot Spitzer's failed attack against Richard Grasso's NYSE compensation package.)
Paul
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