The Good Part Is That Prices Have Declined In California
The Tribune reports from California. “It’s evident that many homeowners on Dorothy Street take pride in their houses. But in this Paso Robles neighborhood - one of the city’s older ones - about half a dozen homes have been in foreclosure during the past year. One such property on Dorothy Street, priced at $259,900, has been on the market for nearly a year, and until recently, no buyer had expressed interest.”
“‘It’s so sad that the houses are just sitting there,’ said one longtime Dorothy Street resident. ‘After the people leave, there’s just nothing.’”
“In the first eight months of this year, there were 1,468 foreclosure filings in the county - including notices of default, property scheduled for auction and real-estate owned (where the lender takes ownership of the property). That’s up 96 percent from the same period in 2007, according to RealtyTrac.”
“The all-home median price in San Luis Obispo County stood at $420,000 in August, a 17.4 percent decrease from the same month a year ago when the median was $508,500, according to DataQuick.”
“‘If you have a home in foreclosure in a neighborhood, and two years ago it sold for $550,000, but today it’s selling for $400,000, and another homeowner bought something in that same time period but they’re not in foreclosure, that is going to have an effect on the value of their home,’ said Jim Liptak, a broker in Paso Robles and president-elect of the California Association of Realtors. He called this market ‘unprecedented.’”
“‘The good news is that most people purchase a home with a long-term view, and so those folks that find themselves in that position, the values will come back over time and they will be fine,’ he said. ‘The crystal-ball question is how long a period of time is that. If someone says they can tell you, they’re blowing smoke at you.’”
“‘If you can afford to wait, tighten your belt and service your mortgage, it’s probably better to hold onto your house until the housing market rallies and you can gain back at least part of the peak value that was there before the housing bubble,’ said Andres Carbacho- Burgos, an economist with Moody’s Economy.com.”
“Lynn Cooper, president of Pacific Oak Foreclosure Service in San Luis Obispo, agrees. ‘It’s hard not to be concerned when your house is worth $200,000 less than it was two years ago,’ he said. ‘There again, are you living in a house (as a short-term investment) or a home?’”
“In the past year, the average days on market for bank-owned property is 55, compared to 145 days for one that’s not bank-owned, said Dick Keenan of the Keenan-Carter Group in Pismo Beach.”
“‘The good part is that the prices have declined in Nipomo 49 percent over the last two years from the very peak to the very bottom,’ said Keenan, adding that the 49 percent includes both single-family homes and condos.”
“Patsy Andres, a Dorothy Street resident since 1975, said her home is almost paid for. Although home values have declined, she and her husband aren’t worried because they’re not planning to move anytime soon.”
“Still, she finds it sad that some residents in her neighborhood weren’t able to hold on to their homes. ‘I don’t think it’s everybody’s fault that the market went down,’ she said. ‘But when you buy a home you do have to budget.’”
“Mike Downs, who is updating the three-bedroom home he bought on Dorothy Street about five months ago, said he has noticed that the quality of caretaking in the area has diminished recently. Those who need to sell, he said, ‘will have no choice but to meet where the foreclosed prices are.’”
The Marin Independent Journal. “Marin taxpayers have stepped in with a $2.5 million loan to shore up a low-income housing program socked by the lax lending practices that triggered the nation’s financial crisis.”
“Although the Marin district attorney’s office has not entered the legal fray, problems involving lenders have prompted a civil court battle and negotiations over whether taxpayers - or lenders - own several homes in the public program.”
“In at least five instances, lending institutions - including the failed IndyMac Bank - gave participants in the program loans secured by their housing units that exceeded the price for which the homeowner was permitted to sell the unit.”
“Six homes had to be repurchased either because their owners failed to keep up with their original mortgage loan payments and homeowner association fees, or because the owner wanted to sell the unit.”
“The authority may have to sell some of its low-income units to cover its costs. There is no estimate as to how many.”
“‘We’re just trying to provide housing opportunities to people who don’t have a lot of money,’ said Ed Griffin, who has served as the authority’s interim director for the past six months.”
The Manteca Bulletin. “The average previously owned home closing escrow in Manteca is costing $180,000 less than it did at the market’s peak in 2005. There were 705 homes that have closed escrow through Monday within the City of Manteca with an average sales price of $249,456. That compares to the peak average price in 2005 of $429,000.”
“All three categories of homes in all three areas - foreclosures, short sales, and property not in duress - have dropped in price significantly since the first week of August. On the flipside, inventory is down by 14 homes from 458 on Aug. 4 while the number of new listings has dropped as well by five from 54 the first week of August. The price of the new listings is down by $46,000 on average to $210,587 for the homes that came on the market last week.”
The Fresno Bee. “Developers are scrambling to find lenders, car loans are harder to get, home equity lines are being frozen and cash for small-business loans is drying up. Homeowners are increasingly having lines of credit frozen or slashed because the values of their houses are falling.”
“Nathan Magsig, executive director of the nonprofit Coalition for Urban Renewal Excellence has seen the effect professionally and personally. Magsig experienced fallout from the credit crisis when his home lender suddenly cut his equity line of credit by $100,000 — even though he never used it.”
“‘If you have a home with a sizable mortgage,’ he said, ‘you’ll be getting that letter in short order.’”
“Between 30% and 35% of people who find a car at the Fresno dealership near Shaw Avenue and Highway 99 qualify for a loan these days, compared with 55% to 60% in past years, said Auto Maxx finance manager Sami Asadourian.”
“‘Even people with good credit — we’re having a hard time getting them qualified,’ he said.”
“Instead of the usual three references for banks to contact in case a person stops paying, many are requiring 10, he said. In the past, Asadourian said, banks never asked for proof of income if a customer’s credit score was higher than 680. Now, even customers with a FICO rating of 800 are having to prove their income, he said.”
The Monterey Herald. “Statewide, unemployment rates reached 7.7. percent in August, pushed by a tumbling economy and crumbling housing market, the highest level since March 1996. Behind the numbers are 1.42 million unemployed Californians, more than triple the 413,000 jobless in August 2007. The department recorded a 61,000 increase in the jobless rolls just since July. The unemployed included 509,700 layoffs.”
“The flatline housing market handed the construction industry the most job losses over the past year, down 79,200 jobs since August 2007. The drop of 8.9 percent means a loss of nearly one out of every 10 construction jobs.”
“The construction, banking and mortgage industries combined for a loss of 112,500 jobs.”
From KCRA 3. “A new casino looking to hire staff has been swamped with applicants struggling to find employment in a poor economy. Red Hawk Casino, which is set to open later this year, has opened a hiring office in El Dorado Hills.”
“About 11,000 applications have streamed in for the 1,700 available jobs.”
The Press Enterprise. “Demand for office space in both counties has dropped so dramatically that office construction is likely to slow, at least for the next year or so, developers and real estate officials familiar with the Inland region’s market say.”
“Because office construction is tied directly to the job market, predicting when office construction in the Inland region will perk up is difficult.”
“The region is unlikely to stabilize until the middle of 2010, at the earliest, said Moshe Silagi, owner of Silagi Development in Thousand Oaks.”
“‘Office construction is directly tied to the housing market,’ said Silagi, whose company is developing the Regency Tower project along with a two-story building that will cover 68,000 square feet inside Hunter Business Park, which is also in Riverside. ‘We have to stop the foreclosures, but unfortunately you can’t stop all of them at once. You just can’t.’”
The Daily Bulletin. “It’s been nearly four months since Mark Dowling took the helm at the San Bernardino County Economic Development Agency, which is tasked with working on housing and business development issues. Dowling is a licensed real estate broker.”
“Daily Bulletin: What can the EDA do about the county’s foreclosure crisis?”
“Dowling: I wish we could have a bigger role. There are currently 20,000 bank-owned homes in San Bernardino County. There are in excess of 20,000 more properties that have had notices of default filed against them. That is an overwhelming number that no government agency can solve.”
The Associated Press. “In California, some neighborhoods have been blighted by the plethora of empty homes. Joe Minnis, a real estate agent for Prudential California, knows foreclosed homes in San Bernardino that have been systematically stripped, trashed and tagged by gang members.”
“‘Neighbors are taking turns parking their cars in the driveways of vacant homes just to make it look like someone lives there,’ he said.”
The Mount Shasta News. “According to Shawn Abbott, faculty member and economics instructor at College of the Siskiyous, the financial crisis in New York will be felt here at home in Siskiyou County in the form of not just lowered 401k and stock portfolio balances, but in a tightening of credit available to consumers for all sorts of purchases and investments including, ‘Cars, real estate… even small business loans.’”
“Lake Shastina based financial planner Robert McCrillis offered his opinion about how the Wall Street turmoil will affect Siskiyou County.”
“‘Credit is going to get a lot tighter and it should. There are over 90 homes for sale at Lake Shastina. 80 have never been lived in. I think that people will lose jobs as companies cut payrolls…Everyone is going to tighten their purse strings,’ he said.”
