It was reported that approximately seventy homes in the housing community of Darkhorse in Auburn California are without any public power since he developer has defaulted on his loans and never installed power in these seventy homes.  Now these homes are literally in the dark!  What a shame this is since there was so much potential with this beautiful block of land.  How could it be that a development of million dollar homes and one of the best golf courses in Northern California under the same name, Darkhorse ran into this problem regardless of the housing slump?  Once I saw the lot sizes  and the general location I was a little skeptical of their general plan, but none the less, the homes built in this development are beautiful. 

It was reported that PG&E will pull power into the area with a cost of approximately $225,000 thousand dollars, but will not do it without a developer or entity securing the financing.  I certainly hope that the powers to be in Nevada County have the wisdom to get this done one way or another. 

As recent numbers have come in, the general Sacramento Real Estate Market continues to see sales increases.  While much has been written that many of the local home sales have come from bank owned properties.  The general number being tossed around is every one in four homes currently listed for sale in the Sacramento, Placer and El Dorado counties area is a bank owned property.   There is a definite trend that our current available inventory is shrinking and median prices are holding steady for several months now.  For the tri-county area of Sacramento, Placer and El Dorado we are averaging right around 3.5 months of inventory.  This is drastically reduced from the high we experienced in September of 07 of 15 months of inventory.  In my opinion, this has a direct relationship to our median prices in all our surrounding counties have come to a point that inventory of all types, REO, Short Sales and traditional sales have reached such a value level that buyers ranging from investors to first time buyers are now active in the market.  At HomeStalkers Group, approximately 1/3 of our summer business has been from investors. 

 Yes, lenders are very cautious right now.  Unless you are paying cash (which many investors are) you will likely be required to put a minimum down payment of 6% for FHA backed loans to 20% for owner occupied loans and 30% for conventional financing for owner non occupied loans., but our local prices are at such a low median price that inventories are being swallowed up.  In September 08, we experienced 2,605 homes sold in the tri county area.  Compare this to the 1,592 units sold in September of 06 you can see we are on a  very aggressive pace to eat up inventory.  Until we see price per foot of homes start to exceed builders costs, we will likely not see much in the way of new home constructions.  All in all, our feeling is this is a fantastic time to purchase!

Market Trends:

Sacramento County's $201,000 median September sales price for new and existing homes combined is 34.4 percent below the same time last year, and 48 percent below its 2005 peak of $387,000. Sales were up 126.4 percent from the same time last year.

• Placer County's $330,000 median price is 21.2 percent below September 2007 and down 37 percent from its 2005 high of $525,000. Sales were up 30 percent from last September.

• El Dorado County's September median price was $375,000, down 9.6 percent from the same time last year. Prices are now down 29.4 percent from the 2006 peak of $531,250. Monthly sales were up 29 percent from last year.

• Yolo County's median sales price in September was $274,500, down 28 percent from a year earlier. Prices are 42.4 percent lower now than their 2005 high of $474,00. September sales were up 68 percent over last year.

We get many questions on our Median prices being low, all bit steady.  Personally, our team has seen an increase of lower-middle priced homes in many areas rising in price, but median prices are being held down due to the increasing inventory and drastic price reducitions of the higher end homes.  If you are in the market for a move up home, it would be hard to think of a better time to consider moving up!

As reported in today's papers, including the wall street journal, it is already being reported that some of the bail out money is being used for lobbying purposes for many of the companies that it was intended to help fund.  I find it incredible that these oversights continue to happen when it sure feels like to most that we are in a recession.  Dianne Feinstein is already looking into oversights into this and I recommend that if it bothers you, that you send quick note to her office letting her know your displeasure with this news.  You can reach her office at:  http://feinstein.senate.gov/public/index.cfm?FuseAction=ContactUs.EmailMe

http://www.yourrealestatevoice.com/2007/02/09/city-council-to-discuss-loan-for-aura-tower/

Construction has stopped at the not yet built, but already locally famous, John Saca "Towers" project in downtown Sacramento.

Recently reported, several key sub contractors, including the original general contractor, Turner Construction has filed liens on the project totally 7.3 million, reported recently in the Sac Bee. Contractors include, general contractor, Turner Construction, the architectural work and the pile driving contractor.

 

While not the first blow to the ambitious 53 story project, headed by John Saca, but this certainly has created a major stall. Reportedly, the project has 383 units with non refundable deposits which puts them very close to achieving their financing goal of 400 + units, but this is sure to lengthen the project time to hit the goal of 400 units which is the Deutishe Bank loan requirement.  We have heard insider rumors that 3/4 of the incoming calls are current depositors asking about refunds.  Another rumor is they may be leaning, (sorry, no pun intended) toward reducing the project to one tower.  While these rumors may or may not be true, it very well could be an indication of the huge task ahead for the Towers Project.

On a side note: If you are interested in investing in this project, this just might be a good time to price a out a unit.

I can't help but think of a conversation with a head construction employee at Turner. He was telling me over six months ago that they recommended to Saca that the project be scaled down, reducing some floors in order to save considerable construction costs.  In his opinion, it was the strong feelings of the Saca group, that they keep on with the original design.

I'm confident they will pull this together, but one thing for sure, this has been one big learning experience for Mr. Saca and his group.  Now that there is a huge void of ground looking into downtown and the Capitol, it will be interesting to see just how much help the city of Sacramento will need to lend. 

Since the start of 2007, most of us in the Real Estate sector have seen noticable increased activity in Real Estate.  While prices are holding steady, inventories has decreased, but with spring around the corner, we should see inventory levels rise. 

What does this mean?  Remember that home prices are mainly effected by simple economics of supply and demand. Supply grew in 2006 which lowered our prices.  Many factors effect the supply and demand, Interest rates being a big factor. 

 

Lending Trends support increased strength:  Unexpectedly positive news for the housing sector arrived in the form of the Mortgage Applications Index, showing the largest percentage increases in home loan applications for purchasing and refinancing since the middle of 2005. But the real good news is that this also indicates that home loan rates are favorable, and most markets are stabilizing in terms of home values. In fact, many experts feel that August of 2006 was the bottom for the housing market. So if you have been thinking about investigating a purchase or refinance, now might be an excellent time to act!

If I was thinking of moving, I would be very tempted to get my home listed now, while the inventory levels are low.  New home inventory seems to have been lowered which helps if you are competing in that sector, which many do. 

What is going on with the excessive partying on the American River?  OK I am showing my age here a little, but heading out to the American River and floating down the lazy stretch between Hazel and Watt Bridge isn't new.  We were floating down both the lower and upper American River before the kids gone wild were a blimp of a thought and yes, we did venture on the river with our libations.  What does seem to be more of a recent trend the last several years, is to make these events into a "Gone Wild" extravaganza.  Now there even is an amateur video you can purchase for ten bucks showing the "kids frolicking" on the river. 

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As reported yesterday, the Natomas basin area of Sacramento had horrible news that all residents of the area that have federally backed loans will be required to carry flood insurance in their policies.

Today it was reported that somehow the city of Sacramento was caught off guard by this report from FEEMA and has sent them scrambling to sort out legal, economic and practical issues.  Mayor Fargo did not rule out a building moratorium!  FEEMA spokesman Frank Mansell said the agency's understanding was that the city wold apply to have the Natomas basin classified as an "AR" zone but would not specify what building restrictions that would entail.

This downgraded rating might have drastic effects on what was planned for an additional 8,000 new homes in the next ten years or so. 

We have not heard the last of this, but our experience that buyers has shown any issues that effect monthly payments has hampers sales in an area where you particularly have a lot of younger families and newer home buyers.  I also wonder about the liability of the Condo projects in the area.  Would love to hear from an insurance professional.