Home Front

A blog about the economy and the Sacramento-area real estate market.

April 27, 2008
House Calls

Just a note to say this writer will be out of the office this week. In my place, my Bee business colleagues may be stepping in here and there to treat you to some offerings, as they unfold, from the real estate scene. Cheers.

April 25, 2008
LA's Channel 7 probes for bottom in Orange County

Just reading some reader comments from today's Home Front look at the region's bottom probers and came across a blogger's call out to this KABC report from Orange County on the same subject.

It's a real estate agent down there making the bottom call for TV viewers. He says the signs are pointing in that direction.
Yes, I know: many are dubious about taking a real estate agent's word for it. But he got himself on TV and this is what he had to say.

Thanks, to Southern California's Real Estate Marketing Blog.

April 24, 2008
Neighbors down $7.4 billion from Sacramento County foreclosures

The Sacramento County Board of Supervisors is taking up the foreclosure issue at 10:45 a.m. Tuesday, April 29. On its agenda is this
report on Sacramento County foreclosures done by the California Reinvestment Coalition.

I'm posting here before taking a good look inside, but I couldn't help but notice one figure in particular: $7.4 billion in erased home equity to neighbors of all these thousands of foreclosed homes.
The top three holders of foreclosed homes in the county: Countrywide, Wells Fargo and GMAC.
I saw a lot of great maps flipping through this.
It's worth a look.


April 24, 2008
The Bankrupt Builder Blog

It seems this week this has turned into the bankrupt builder blog. Here is another one to fall, Illinois-based Kimball Hill Homes, which builds houses in Natomas, South Sacramento/Elk Grove and Rancho Cordova. The builder is also active in Stockton, Modesto and Merced.

Hanley Wood Market Intelligence notes that Kimball Hill sold 92 houses from its Sacramento division last year. You can see its office on Highway 99 driving south through Elk Grove.
All indications are the builder will keep its daily operations going while trying to restructure itself.
Here is the Chicago Tribune story.

I am also including here a reprint of a Nov. 2007 Home Front item when Kimball Hill's chief addressed local home builders. He had an interesting take on home building and the global economy. I also remember him saying how tough it was going to get if the banks didn't loosen credit for buyers. Now it has come true.

Here is the Home Front item

You don't have to go far to see the global economy. It is in your house.

That was the theme of an eye-opening speech last week when Sacramento home builders gathered for a 2007 housing forecast.

The message wasn't that your bathroom faucet in Roseville was probably manufactured outside Beijing. It was about this whole new thing being born in the home building business, a suggestion of better days for builders who survive the next two years.

Credit the global economy, said David Hill, executive chairman of Chicago-based Kimball Hill Homes, which builds in Sacramento and Stockton. Get over the idea of a domestic home building industry that relies on conditions inside the United States to thrive. The world's money is rushing in, he said, transforming the building industry that has so transformed the capital region in recent years.

The Germans and many others are looking at a chance to own a piece of this great economy of ours, he told builders.

Brush up on your foreign language skills, he advised local land brokers. As struggling area builders face prospects of land sell-offs, rich foreign investors will be there to buy.

Hill asked builders to think about who buys homes. Nearly one in three buyers now are recent immigrants -- what Hill called foreign-sourced homebuyers.

And he sounded a warning. They're being made to feel unwelcome in the United States.

We are doing a lot of things in this country to make sure the foreign-sourced buyers can't get citizenship very easily, cannot get documented very easily and are really looked at very suspiciously, Hill said. All I know is there is fewer of them now. And they are subtracted from the demand.

Look who builds our houses, he said, touching a subject many builders do not like to talk about. Hill said 30 percent of new U.S. homes since 2005 are being built by foreign-sourced labor.

Finally, look who is partnering with large U.S. home builders. Hill cited big infusions of foreign investment in publicly traded home building giants that dominate markets like Sacramento. He recalled the biggest buzz in home building last year: the sale of Newport Beach-based John Laing Homes -- which builds extensively in Sacramento -- to a Dubai conglomerate.

Hiss point to area builders: We are now interconnected and changed by things we never thought of before. And that suggests backers and buyers that few builders have considered before.

I believe this will have profound implications for the careers of anybody from 25 to 40, he said. We are no longer delineated by a boundary even when we're building American homes on American soil.


April 23, 2008
Home builder John Reyen files for personal bankruptcy protection

This press release just arrived announcing the newest bankruptcy to hit the Sacramento-area home building industry. We will be online soon with more details.

April 23, 2008
Foreclosure workshop tonight

If you are looking for help with your loan or an alternative to foreclosure there is a free workshop tonight in Sacramento to talk about your options. Here are the details:

PUBLIC INVITED TO FREE WORKSHOP ON
FORECLOSURE AND MORTGAGE DEFAULT

The Sacramento Housing and Redevelopment Agency in conjunction with the Sacramento Regional Partners in Homeownership will sponsor a consumer workshop on mortgage default and foreclosure presented by Chase Homeownership Preservation on Wednesday, April 23, 2008, from 6:30 - 8:30 p.m., at Regency Park Elementary School, 5901 Bridgecross Drive, Sacramento, 95835.

Invited guest speakers are Mayor Heather Fargo and Council Member Ray Tretheway. Representatives from local and national banks and lending institutions, along with home loan and credit counselors will provide one-on-one advice and important information on preventing mortgage defaults and foreclosure.

Homeowners are encouraged to bring their loan documents and financial information. RSVP to SHRA Homeownership Services at (916) 264-1500.

Resource education and information about preventing mortgage default and foreclosure is also available at www.shra.org.

April 22, 2008
California sets foreclosure record in first quarter

This just in: 47,171 California foreclosures in January, Feburary and March.
DataQuick Information Systems says that is a record.
It is also triple the previous peak during the 1990s downturn - 15,418 in the third quarter of 1996.

The eight-county capital region - Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties - showed 9,505 defaults during Jan., Feb. and March. All told, this region has seen about 34,000 home loan defaults since the beginning of 2007 - and we are guessing about 15,000 foreclosures.

That number is still to come from DataQuick. We will be online with it when we get it.

April 21, 2008
Lyon: Banks want these houses off their books

Last week on deadline I had a quick conversation with Mike Lyon, head of Lyon Real Estate, in which he talked about approximately 3,000 homes presently in escrow in El Dorado, Placer, Sacramento and Yolo counties.
He said that number, which they call in the trade pending sales, are at 2005 levels. That means sales volume is at a high not seen since the boom, he said.

And more than half those sales are bank repos.

Here is the press release his firm, TrendGraphix, put out today. It explains in more detail, in his words, what he was saying last week when I caught him for a moment.

April 21, 2008
March Home sales by ZIP Codes

Many of you are already very familiar with these ZIP Code charts. For those who are not, this is a way to see what is selling in your neighborhood and how it compared to the same time last year. The prices per square foot tell a lot about how different neighborhoods are faring.

April 21, 2008
Foreclosed pets seeking a home

This just arrived at The Bee from a Roseville veterinary clinic.

Two Rottweiler's left without food or water for at least six days.
Found abandoned in back yard of bank repo home.
Male is 7 years, 72 pounds. Female is 9 years, 67 pounds.
Very mild mannered, they understand and obey basic commands (sit, stay, etc).
They appear to be dog friendly, they played with two small poodles.
Very affectionate, will sit in your lap, lick your face, etc.
Loving and people oriented dogs.
Contact Johnson Ranch Veterinary Clinic, Karen Hanson, D.V.M.
9260 Sierra College Blvd. #250 Roseville, Call 916/774-6630

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April 20, 2008
Sid Dunmore: A Life after Dunmore Homes

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What is Sidney B. Dunmore, the former owner of now-bankrupt Dunmore Homes, thinking?
I had a long phone conversation with him about three weeks ago for the story that is running today in The Bee. My colleague Dale Kasler and I were not able to put even a fraction of what he said into the print version. But here is a lot of what he had to say during the conversation, in his own words.

On what happened to his business

It is a function of what is going on in the economy right now. We are in the worst housing crunch I have ever seen in my career. It is the worst it has ever been ... A lot of people are going through this right now. They are not at the stage we are. They are hanging on. For how long? We were the first ones in. The banks were in disbelief and did not believe what I was telling them about how bad it was, how bad it was going to get. I believe they believe it now.

The timing seemed right, but it turned out to be exactly wrong.
I expanded the business because things were doing fabulous. We borrowed to do that and all of a sudden the market turned down, and it turned down in a way that nobody foresaw.
There are a lot of guys, I won’t name names. Some others I know are in deep trouble, severe trouble. They are hanging on by their fingernails. Will they survive? I hope so.

On selling the family business for $500

We did what we thought was in best interests of company, our employees and our creditors. It was not my first choice. I agonized over that. Hell, the thing has been in my family for 55 years. The last thing I wanted to do was sell the company. There was nothing else I could do to make it work any other way.


On the origins of the family business

My dad started in 1953. It started in Orangevale. It was very rural and that is where they started. They built starter homes in a project called Kenneth Meadows, and Woodmore Oaks off Fair Oaks Boulevard. Woodmore Oaks Drive is stuff we did.
Then they started doing stuff in the south (Sacramento) area, in the late 60s and early 70s. They were down in Rancho Cordova area, all through there. All the Sunrise Countryside, Sunrise Estates, the whole Sunrise area. That is where we were located.
I started running the company in 1977. My dad retired the first time in 1980. We did fine in those times. We built the company up by the late 70s into one of the top three builders in town. There was MJ Brock and Sons of Southern California and Elliott (Homes) and there was us. We were the largest builders in town.
That was in the late 70s, a big boom time.


On what he is going to do now

That is the 64-dollar question. I do not know right now. I have got to work my way through what we are going through. I am not in charge of the company. I have the land company, two pieces of land, one in North Natomas and one in Granite Bay.
I am trying to assess what I want to do. I look back, a couple years ago in 2004, I was approached by a number of publics (publicly-traded national builders) to buy the company in very, very large numbers. I talked to my banks and employees and everybody was a little freaked out that I would think about that.
Hindsight being what it is, I should have done it and retired.

Honestly, I do not know. What I would like to do at some point is get back in and do what I was doing. I am not ready to retire. I am not a good enough golfer to go out and play golf five days a week. Hopefully, I will be able to have opportunities to do that. I have got some people who are very, very pissed off at me, but I have gotten a lot of calls of support from a lot of people .... This is a bad, bad situation all the way around. I am very upset about the whole thing, as are a lot of people.


On expanding into the Central Valley

We were thinking: where is the next area we can go to that will provide affordable housing? Where you can buy a house at an affordable price and permits and fees are not a killer.
We asked where is the next area? We looked at good land deals in Ceres. We got a great price, built there and sold half of the project to (builder) K. Hovnanian.

And then we looked at Dinuba and Fresno and Bakersfield. Those are growing communities and affordable. People were commuting from Southern California because they cannot find housing. This makes sense.
The timing was just the wrong timing. You hit timing in your business cycles. You are either low on land or heavy on cash and looking around, and now acquiring and expanding. We were in that mode, acquiring and expanding.
We had burned through land we held through the 1990s. What are we going to do next? We have to buy some or we have to expand the company. People like to work where you have a lot of land. It gives them a feeling of job security.

On not seeing the housing bust coming

We went into this in better financial shape that we had ever been in before.
We have never seen pricing drop 30 to 40 percent and sales velocity drop 50 percent. That is not a scenario anybody is building into their business.

Nobody saw it coming. None of the banks, none of the builders. Not the The Fed (Federal Reserve).

When we made decision to shut it, our subs were surprised. They wanted to keep going. I did not want to get in any deeper. I told them I did not want to owe them even more.
We owe a lot of guys money, but I am not getting nasty phone calls and hate mail. I am getting support from people. People have said Sid, you get back into it we will be there with you.
Hopefully, at the end of things I am able to come back and rise from the ashes and do what I love to do. It is not my intention to retire, that is for sure. We will see what times hold and go from there. That would be my hope, that I would be able to do that. I spent 30 years building a reputation that I thought was a pretty good reputation. It took about six months to get it smacked down.

Sacramento Bee photo (2007)
Dunmore Homes image courtesy of Dunmore Homes

April 18, 2008
Sacramento: a better place to rent

Thanks one and all for the e-mails and personal insights about the Sacramento-area rental market in response to a posting about three weeks ago.

The story will run Sunday, but just a few hints ahead of time: Reality kind of surprised us. I expected that 15,000 foreclosures since Jan. 2007 would have to tighten supply and thus push rents up. Instead largely the opposite has proved true. Rents have remained flat and supply remains ample, even expanded.

What gives? The experts told us that investors are buying foreclosure properties and renting them out. And people who can't sell - or refuse to sell at these prices - are renting out their houses. Builders, too, who can't sell condos are putting whole complexes on the market as rentals.

Others weighed in, saying people are leaving the area after losing their homes. A tight economy has more renters moving back in with mom and dad and some of those foreclosed households have actually bought a much cheaper house just before walking away from the one they bought in 2005.

All across California and the West rent is going up. But for the most part depending on the neighborhood and the type of rental that is not the case here. The Sunday story will explain it all. Thanks all, for the help.

April 18, 2008
Building Brownstones in Midtown

I shot this video of Tapestri Square while walking to work in Midtown this morning from the Broadway light rail station. It is one of those emerging hip new places to live in Sacramento. We wrote a brownstones are coming to downtown story a little over a year ago that featured this project and another called Sutter Brownstones and 27th and N streets.

That one just opened, too, and has reportedly sold six units. I will try to swing by that one and show you its look, too.
Costa Mesa-based Hanley Wood Market Intelligence says Tapestri has sold 6 units in its first release of 13. It plans 58 homes altogether.

P.M. Update..Here is a look at Sutter Brownstones:

April 18, 2008
Friday catch-up

It has been a busy week so cheers to Friday, and catching up with some of the news. The Pew Charitable Trusts has released Defaulting on the Dream, a report on what states are doing about foreclosures. I confess to not reading it yet, but The New York Times weighed in with a
story that will provide a fast overview. (If it links to the ad, hit the skip the ad button in the top right corner).

Here at The Bee we expect to have a story early next week detailing the first quarter foreclosure situation in the capital region: Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. Expectations are the numbers will be more of the same: still rising.

April 17, 2008
DataQuick issues March sales numbers

We just got the numbers for March from DataQuick and will be updating here and online during the day. A fast look shows 2,522 sales in the eight-county region during March, up from 2,162 in February. So there has been a typical seasonal February to March bounce.

Sacramento County sales in March are up 19.3 percent from February. But DataQuick says the average bounce over the past 20 years has been 36.5 percent. So things are still lagging out there compared to history.

A quick tally shows 6,652 sales during the first quarter in the region - and 5,573 foreclosures. More to come.

April 16, 2008
Consumer attitudes toward solar-powered houses

There are a lot of policy makers in this capital town who remember the late 1970s as a time when solar power seemed like it would save the world. Architects were working it into their designs and learning about it in school. Old hippies were starting companies to install solar, and it looked to all involved like an inevitable movement.

Then something happened and almost 30 years went by. Now everyone is talking about solar again.

The California Energy Commission has just released
results of a survey on attitudes toward buying an energy-efficient home.
Here are some key findings in the CEC survey, run by Santa Monica-based opinion researchers Fairbank, Maslin, Maullin & Associates:

- More than half of potential home buyers in California say they would buy a new energy-efficient solar home in order to lower monthly electric bills.
- Seventy-four percent said homebuilders in California should make rooftop solar systems a standard feature.
- Those most likely to buy a solar electric system are between the ages of 18 and 49, college-educated and see themselves as environmentalists with a moderate to liberal political outlook.

This is all in the introduction, but results come from two sources. One is a survey from May 18 to May 26, 2007 of 600 recent buyers of single-family homes in San Bernardino and Riverside counties, the Central Valley and the Sacramento region. It has a 4.1 percent margin of error. The survey also took into account several focus groups in Riverside, San Diego, Fresno and Concord.


April 15, 2008
Everything you wanted to know about a green home

I had a cup of coffee this morning with Folsom homebuilder Robert Walter, who is promoting a May 8 Green Home Expo being sponsored by the North State Building Industry Association. It is the first by a regional home builder trade group in California and will open at the Sacramento Convention Center.

Walter is soon to start building a energy-neutral house in Folsom, with all the newest energy-efficient extras. He chairs the BIA committee running the event.

The BIA dreamed it up about 18 months ago to educate its builder/contractor members on the newest green-building techniques and public policy-making related to energy efficiency at home.
The event also has sessions for home owners - how to evaluate your energy efficiency at home, how to be greeen on a budget and everything about tax credits for energy-efficient remodeling.

Builders will learn more about utility rebate programs for solar, how to market and sell green homes and how to build a local workforce of contractors skilled in green building techniques. There is also a big exhibit area.

To put it more simply, here is Walter:


April 15, 2008
Sacramento remodelers making a mark nationally

A Sacramento home remodeler is on his way to top office in the National Association of the Remodeling Industry (NARI).
William Carter, owner of William Carter Co., has been named president elect of the group, which has 7,700 member companies and is based in Des Plaines, Ill. That puts Carter on the way to being NARI president next year.

Another Sacramento remodeler, Nick Kress of Standards of Excellence, also got a national post. He was appointed vice-chairman of the NAR national awards committee.

Both are long-time members and former presidents of the NARI Sacramento chapter.

April 14, 2008
Risky markets

Forbes Magazine again ranks the 10 riskiest real estate markets in America. Guess which one is number seven?

April 14, 2008
They built their own houses

Who are the people in this picture? Those holding certificates are some of the newest homeowners in Sacramento - people who built 35 of their own houses under the direction of nonprofit builder Mercy Housing California. The project is called Glenwood Homes, near Stockton Boulevard and 50th and 51st avenues. The homes were built under the Mercy Mutual Self-Help Housing program - and a lot of sweat by their new owners. Salute....

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Photo courtesy of Mercy Housing

April 14, 2008
First Quarter: Top 10 Sacramento-area homebuilders

Last week we reported that the first quarter of 2008 saw the fewest new-home sales in more than a decade in the Sacramento region. Total sales: 1,304.

Here is a list of sales by the top 10 builders during the first quarter in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. The source is The Gregory Group, a Folsom-based consultant to the home building industry.

1) Centex Homes, Dallas, 228.
2) Beazer Homes, Atlanta, 131
3) D.R. Horton, Fort Worth, 113
4) Lennar Communities, Miami, 87
5) Morrison Homes, Bradenton, Fla., 74
6) Meritage Homes, Scottsdale, Ariz., 67
7) KB Home, Los Angeles, 59
8) Del Webb, division of Pulte Homes, Bloomfield Hills, Mich., 58
9) JMC Homes, Roseville, 45
10) K. Hovnanian Enterprises, Red Bank, N.J., 45

April 14, 2008
Have camera, Will travel

... Just back from Capitol Mall in downtown Sacramento and an interview at 555 on the regional apartment market. Walking from the 8th and Capitol light rail stop provided a good view of the two big office buildings going up there.
Home Front pleads guilty. It cannot go past a construction site without gawking.

U.S. Bank Tower


Bank of the West Tower

April 14, 2008
Transferred executive wants to buy my house

This came in my mail at home a couple of days of ago.
Anyone know what this is about? In this market as in most things by mail or phone I follow the old adage: if it seems too good to be true it probably is.

Transferred executive looking to buy a home in your neighborhood.....

Dear friend,
We are a firm that relocates transferred executives from around the country and are looking to quickly purchase a luxury home in your area. (Blogger's interruption: Luxury, that killed me). We noticed your home and would like to know if you are interested in selling.

The letter asks the receiver to contact the writer's assistant Pat at 970 area code to give the necessary information we need to make an offer on your property.

P.S., it says. If you are serious about selling, please do not hesitate to contact us as our window of opportunity is closing quickly. Finally, says this letter: We are not Realtors. We are not looking to list your home. We are very serious buyers.

Anyone else getting these?


April 11, 2008
The price of walking away from your house

Have you walked away from your house yet? Been surfing Web sites that tell you how to do it and not to worry so much about consequences?

These are not idle questions in regions like Sacramento, much of the Central Valley and that whole swath of instant California suburbia that calls itself the Inland Empire. There are thousands upon thousands of people in these places who go to bed each night wondering why they make $3,200-a-month house payments for a house that has lost $150,000 to $200,000 in value and might take years to come back.

Many are in their late twenties and early thirties who see their friends paying $1,300 for a nice apartment and taking trips to San Francisco. They, meanwhile, have a mortgage on their shoulders that demands every last penny, and for what? A house that is still losing value.

For what it might be worth here is a
column by real estate writer Kenneth Harvey of The Washington Post that ran in another epicenter of this issue - Florida - this morning. It outlines the price of walking away and provides food for thought. Good luck.

April 10, 2008
Leaving expensive California for a $114,000 house in Midwest

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One morning last summer the phone rang here at the office and on the other end was a Sacramento woman concerned about the tone of our real estate reporting. She thought we were negative and needed to write more about the positive things happening in the market.
It happened that she had recently listed her house for sale.
I listened and she made points about it being hard enough to sell without the newspaper scaring away buyers.

Then I happened to ask where she was moving.
That started one of the more goofy episodes of journalism I have been involved in over 30-some years. (And in my cub days at The Fort Wayne Journal-Gazette I wrote a 1975 story about a family pet rabbit in Indiana that liked to watch television. It still hurts to remember).

Anyway, I am talking about the story last July of Cathy Del Brocco and her search for a $150,000 house in one of the best towns in America. It really hit a nerve in expensive California where $150,000 might buy you a shack in the woods. And do not think it includes a kitchen sink.

It turned out she had seen a Money Magazine story that called
Holland, Mich., one of the top five retirement towns in the U.S. And after checking out Las Vegas, Orlando and Midtown Sacramento and then ruling them out, she flew to Holland and looked at houses. She did not know a soul there; it was a move based on a magazine recommendation.

I wrote this story about her, which was discovered in Holland and led to invitations from the mayor to lunch when she arrived and all kind of other surprises. Two Michigan newspapers wrote about the Californian giving it all up to move to Holland. The town was already swelling with pride that Money Magazine had noticed it; now it had a Californian coming because of that.

Cathy Del Brocco became a kind of celebrity there.

Her only problem was she lived in Sacramento and could not sell her house to save her life. In the end it took her nearly nine months.

She called late last week and said she had finally sold it and was moving to Holland. She thought she was probably forgotten there after all this time.

No. The mayor again offered an invitation to lunch and a tour of the city. He said he would reserve her a Dutch costume and hoped she could sit as a guest of honor on the city float in the May Tulip Parade.

Most amazing at all, she never found a $150,000 house.
The whole time she had to cut her price in Sacramento to sell somebody in Michigan was doing the same. She bought a house for $114,000.

The full story runs Friday in the print version of Home Front. Who knows what will happen when you pick up the phone.

Photo courtesy of www.infomi.com

April 8, 2008
The high-stakes politics of mortgage banking

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These are times to test the fortitude of mortgage bankers. Their loans are going bad, the financial system is scared to death to let them make more and the knives are out in Congress and state capitals.
Lawmakers everywhere are dreaming up a thousand new ways to increase regulations and tighten the grip on their business.

I just had a short interview with Dustin Hobbs, spokesman for the California Mortgage Bankers Association. The Capitol is awash in bills and amendments to those bills to change the landscape of mortgage lending.

There are bills to make them try harder to avoid foreclosing on their borrowers and bills to ban them from steering borrowers to loans that get bigger instead of smaller. The bills, as their supporters say, are about bringing back common sense to lending and restoring accountability for bad loans throughout the global financial system.

As always in politics, no one is opposed to that. It is the details that worry mortgage bankers. In a nutshell, they are arguing that too much regulation can make the current credit crunch even worse by making the investors even more reluctant to provide capital.

Hobbs argues that this could make it even harder for people to get home loans and prolong the housing slump.

There are counter views to that, of course, and all sides are aggressively working your California lawmakers beneath the Capitol dome. I am hoping to go a little further into this in the Friday Home Front column this week.

In the meantime, Hobbs offers a look at what the industry is thinking in this video:

Capitol photo courtesy of wedrivecalifornia.com

April 7, 2008
Strippers: the Sacramento version

In the space of 90 minutes this morning, I have received a call and e-mail from real estate brokers about vacant houses being stripped by thieves.
From Ed Favinger, broker with Realty World, Franklin Real Estate Group and Haven Properties Management in Citrus Heights:
- I have now been involved in two transactions where a house is vacant and thieves have come in and stolen all the copper water lines from the house.

In one case it cost my sellers over $5,000 to fix it. Rapid Rooter plumbing also informed my seller that when they came to his house to give him a bid, they had just finished a job across town with the same problem.

I am now in escrow on a home and the listing agent just informed me of the same thing is happening here. I am representing the buyer in this transaction.

I wonder how many other homes in this area are affected and where in the hell do these thieves sell this stuff?

And this from commercial real estate broker Mary Collins in Rio Linda (calling by cell phone from Interstate 80): A week ago a real estate agent posted a bank-owned sign in front of the house next door to me. Last night thieves came in and stripped it.
That house lost 50 percent of its equity overnight because of that sign. They take the lighting, the copper and the air conditioning.

I asked both how owners can protect themselves:

Don't put bank-owned out front, said Collins.
Added Favinger:
I would put a really heavy duty lock on the crawl space.
I would let the neighbors know on each side of the house and across the street when they might expect to see a trade person there.
I might even put some kind of loud alarm system on the crawl space entry.
Make sure your home owner insurance is up to date and covers this kind of thing.



April 6, 2008
Signs of spring in the City of Trees

Sacramento likes - with good reason - to boast about its lovely tree-lined neighborhoods. It is enjoyable this time of year to drive around the region and see the explosion of spring foliage.

I am just back home from another wonder of foliage that adds to the ambience of the capital. That is the annual spring show of Bonsai Sekiyu Kai of Sacramento.

Here is a short video clip from the group's 31st show this weekend at the Sacramento Buddhist Church, located between downtown and Land Park.

It does not have a lot to do with real estate. But I think if you ask people who have spent years in their back yards creating these trees it has a lot to do with contentment and home.


April 4, 2008
SMUD solar deal with Woodside Homes

As promised, here is a sneak peek at part of the SMUD-Woodside solar story running in the Saturday paper. It was interesting to learn that right here where we live, people are at the forefront of the growing solar movement.


By Jim Wasserman
jwasserman@sacbee.com
A Utah homebuilder and the Sacramento Municipal Utility District have struck a deal to build 1,487 solar-powered homes in Rancho Cordova and Rancho Murieta by 2012, the parties announced Friday.
The utility calls the agreement with Woodside Homes the largest U.S. solar-home project so far, keeping the capital region at the forefront of efforts to power homes with sunlight.
Sacramento receives about 320 days of sunshine a year.
Thirteen months ago SMUD announced a similar deal with Miami-based Lennar Corp. for 1,254 new homes in Sacramento County. That was then called the largest partnership in the country. Lennar last year also reached agreement with Roseville Electric to build 650 solar homes there.
A Woodside official said the deal is a response to demand.
We have had a steady stream of folks coming to our office asking, Are you solar? said Brian Cuttings, project manager at the Woodside Sacramento division. We see there is a definite segment of the market that says you have got to have solar.
More than 1,000 of the homes are proposed for Rancho Cordova subdivisions at Douglas and Grant Line roads. Another 350 are planned in the its Sunridge Park subdivisions in Rancho Cordova, and 99 more are scheduled to be built in Rancho Murieta.
The agreement is the 10th by SMUD with builders since early 2007. The deals, in which SMUD helps builders pay for the systems, will equip more than 4,153 new homes in Sacramento County with solar power in coming years. To qualify for the program, builders must install energy-efficient extras, such as tighter ducts for air-conditioning units, better insulation and windows and more efficient heating and air-conditioning units.
SMUD funds its subsidies - $5,955 per home in the Woodside case - with a solar surcharge on all customer electric bills.
Builders also receive a $2,000 federal tax credit for adding solar systems to a house. Home buyers, likewise, are eligible for a $2,000 federal tax credit for buying a solar-powered home, said Wade Hughes, manager of the SMUD solar home program.
After tallying financial help from the utility and government, it costs the builder an extra $11,000 to $13,000 to build this kind of home, said Hughes.
With 10 deals for 4,153 homes in place, 30 percent or more of new homes built next year in Sacramento County will have solar systems, he said.

April 4, 2008
Another opinion on buying now

Not everybody in real estate thinks now is a good time to buy - and one of them is Boyce Thompson, editorial director of major home building industry magazines, such as Big Builder, Multifamily Executive and Affordable Housing Finance.

In one of his most recent blog postings he tells of being booed and hissed at a gathering of home builders for daring to say it: now might not be a good time to buy with foreclosures rising and prices falling.

Check out his argument that enforced optimism can backfire with consumers.

April 4, 2008
Majority finally believes it: Now or soon is a good time to buy

If there is one thing I have heard over and over from real estate agents and home builders since starting this beat two years ago it is this: NOW is a good time to buy. They were saying it in March 2006, they said it all last year and they are saying it still. At one Realtor event I went to late last year an agent joked I should say it out loud because it feels good.

Now, after sales prices have fallen 30 percent since late 2005, a majority of public opinion in the Sacramento region finally agrees. The 2008 Sacramento State Survey of the Region
being released today says 63 percent of people in El Dorado, Placer, Sacramento and Yolo counties believe that now - or the next six months - is a good time to buy a house.


- The belief is strongest among whites, households earning more than $50,000 a year, residents of Placer County, Republicans and people who already have mortgages.

- It is weaker among renters, minorities, households earning less than $50,000 a year and residents of Sacramento, Yolo and El Dorado counties. All say that a year from now will be a good time to buy.

I will offer some more highlights here, but I recommend looking at the survey for some great details. It really breaks down well the various way people feel about this market by income, politics and county.

Survey director Amy Liu says only three years ago one third of those surveyed were thinking of moving out of Sacramento because housing was so expensive. That 2005 survey was taken after Sacramento County residents had seen their median sales prices rise 32 percent from 2004 to 2005.

No one talked this year about leaving Sacramento, she says.

The annual survey, the seventh conducted by the Institute for Social Research at CSUS, shows that concern about affordable housing has fallen almost as fast as home values.

- Two years ago 51 percent of those surveyed called the availability of housing they could afford a big problem.

- This year, 36 percent called it a big problem.

- The survey shows 75 percent of respondents in the four-county region believe it will be two years or more before the capital region's real estate market fully recovers.

- About 20 percent believe the market will fully recover within six months to a year.

The survey, conducted in English and Spanish, has a margin of error of three percentage points.

Here is a link to the annual surveys from previous years. These are good indicators of public opinion during the run up to the boom, the boom itself and now during the correction.

April 4, 2008
The biggest solar-home agreement yet in U.S. is in Rancho Cordova

We just got this news release from SMUD about plans to build almost 1,500 solar-powered homes in Rancho Cordova. The utiilty is calling its agreement with Utah-based Woodside Homes the largest single solar home deal in the U.S.
I am chasing this for a story in the Saturday paper and will post more online when we get it.

SMUD and Woodside Homes agree to build almost 1,500 solar homes

Deal is largest utility-homebuilder partnership in the nation

Nearly 1,500 solar-powered, super energy-efficient SolarSmart homes will be built in the Sacramento area in an agreement between SMUD and homebuilder Woodside Homes. The deal is the largest to date between any utility and homebuilder in the United States.

In the agreement, the latest SMUD has signed with what is becoming a long list of homebuilders, SMUD provides funding to buy down the cost of solar and energy efficiency equipment in all the homes. The 1,487 homes contracted in the Woodside Homes deal will be built starting this year in subdivisions near Rancho Cordova. They are expected to be completed in 2012.

Residents of these SolarSmart homes may save as much as 60 percent annually on their electric bills through the energy-efficient features and the solar roof tiles that generate electricity. SolarSmart homes also boast many energy efficiency measures to help customers reduce their bills year-round. The energy efficiency measures include efficient HVAC systems, radiant barriers in attics, added insulation, duct sealing and energy-efficient compact fluorescent lighting.

The SMUD customer community also benefits from solar home developments in terms of lower power costs for all customers. SolarSmart homes save and produce the most energy on hot summer days, so less electricity will be needed to serve these homes. That is the same time when power is most expensive for a utility to buy. These new SolarSmart homes are expected to shave about two megawatts off the peak demand.

The homes also deliver environmental benefits. They have a smaller “carbon footprint” than conventional new homes. Carbon footprint is the amount of greenhouse gas emissions produced. Cumulatively, the 1,487 SolarSmart homes could reduce carbon emissions that are equivalent to taking about 700 cars off the road or planting about 1,000 acres of trees.

The Woodside Homes deal is the tenth agreement SMUD has signed with builders since last year to construct SolarSmart homes. So far, SMUD has agreements in place to build more than 4,000 SolarSmart homes. Next year, more than 30 percent of new homes in SMUD service territory will be SolarSmart.

As a partner, SMUD provides incentives of about $6,000 per home to buy down the cost of the solar electric systems and provides rebates for energy efficiency upgrades. The rebates and incentives, combined with attractive tax credits, make the options more affordable for most homebuyers. And in a slower housing market, builders see the options as a way to offer prospective homebuyers more significant value in the form of lower energy bills and a more “green” home.

SMUD has been a national leader in developing solar technology for more than 20 years. SMUD has helped customers install and own solar electric systems on existing homes. SMUD began partnering with homebuilders to install solar panels during construction in 2001, and prior to 2007, partnered on more than 200 solar-powered homes in the SMUD territory. For more information about SMUD and its solar and other renewable energy programs, visit smud.org.

April 3, 2008
Centex dominating during slow home building start for 2008

The newest monthly home building numbers are in from Costa Mesa-based Hanley Wood Market Intelligence - and they show Centex Homes running away with the new-home market so far this year in the six-county Sacramento region.

First off, these are numbers from El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.

Publicly-traded Centex reports 140 sales in January and February, a 17.5 percent market share. Others in the Top 5 are:
- Atlanta-based Beazer Homes, with 74 sales and 9.3 percent market share.
-Michigan-based Pulte Homes and its Del Webb affiliate, with 73 sales and 9.1 percent market share.
- Miami-based Lennar Homes with 52 sales and 6.5 percent market share.
- Fort Worth-based D.R. Horton, with 43 sales and 5.4 percent market share.

The top 10 also includes Los Angeles-based KB Home, privately-owned Roseville homebuilder JMC Homes, New Jersey-based K. Hovnanian Homes, Salt Lake City-based Woodside Homes and Newport-Beach based John Laing Homes.

Hanley Wood analyst Kathryn Boyce, based in Sacramento, said Centex is still offering lots of financial incentives to buyers and keeping prices down. Said Boyce: They are doing a lot of different things to be able to bring their market share higher. Whether they are making money is another story.

All told, Hanley Wood tallied a slow start for homebuilders in 2008: 798 new-home sales in the six-county Sacramento region during January and February. That is down 57.7 percent from 1,885 sales the same time last year.

Specific sales figures, according to the consulting firm:
Single-family homes, 707 sales, down 54.2 percent from last year.
Townhouses and duplexes, 51 sales, down 44.6 percent from last year.
Condominiums, 40 sales, down 84 percent from last year.

Image courtesy of Energystar.gov

April 3, 2008
PPIC explains it all

The Public Policy Institute of California has been tracking the state housing woes and sends this Just The Facts primer. It is three pages of everything you need to know to talk smartly about construction permits, foreclosures, sales prices and what is different this time compared to a decade ago.

April 3, 2008
Party Shacks

Party shacks is not a word I have heard before, but Bakersfield is apparently on the cutting edge of an unwelcome phenomenon, according to this advisory in The Bakersfield Californian.
One can only presume this is a problem here, too.
As the story says: Be Vigilant.

April 2, 2008
A history of how we got into this mess - and will get back out

This little seven-minute cartoon history of housing market cycles just arrived from Irvine-based John Burns Real Estate Consulting.
It is kind of a pep talk for home builders who are moping because business is so slow. Plus that little house for sale is so darn cute.

April 2, 2008
The Geography of Subprime

For people who like maps and statistics the Federal Reserve System has a major new destination for information about the subprime sector of the housing crisis. It just went live yesterday.

I see you can type in your ZIP Code and see the percentage of subprime loans with missed payments. You can also see the percentage of adjustable-rate subprime loans still to reset in the next 12 months. The Fed promises it will be updated monthly. Enjoy.

April 1, 2008
No solution in sight for foreclosures

One of the most sobering things about listening to leading experts in the U.S. talk about foreclosures is how little they seem to know about what to do.

I am just back in town after sitting through two sessions on foreclosures during a conference hosted by the Federal Reserve Bank of San Francisco. The speakers had lots of charts about the specifics of the problem - particularly, that we are in unmapped and dangerous territory.

But when the questions in a big conference room at the Fairmont Hotel in San Francisco were about solutions, then the talk got vague and roundabout. The consensus always seemed to be that it is extremely complicated and we need to keep talking about ideas to resolve it.

In short, even when Federal Reserve staffers speak, it is easy to get the sense that there are no big solutions now in motion that will stop this any time soon.

There was other talk about numbers - people counseled, workout sessions held, money allocated. Yet when you think about it, the most important number - that of those losing their homes - keeps soaring. It is easy to wonder sometimes if the plan is to tinker at the edges, save the easiest cases and let the market do its unpleasant work for the next couple of years. I will have a more detailed look at this in my Friday Home Front column in The Bee.

April 1, 2008
Sacramento-area renters: feeling a supply squeeze?

This is an SOS call. I am just starting the reporting for a story that will assess the state of the rental market in the Sacramento region. Renters are a part of the big real estate story that admittedly gets short shrift during a housing crisis.

Obviously, more and more people are getting booted out of their homes due to foreclosure and all those people need a place to rent now. And many of the vacant homes are owned by banks and thus are not available for rent.

We want to see if there is a supply squeeze building here, if rent is rising and if there is suddenly more competition now for rentals. I am hearing that this is the case in many cities around the state as foreclosures push more people back to rentals.


The Sacramento area has been immune to rising rents for almost four years. Rents have stayed mostly flat and people have talked about the region's excess of shelter after a few years of overbuilding. Is this changing?

The story will run in about a week and a half. If you have experiences, personal insight into the rental market or a sense that it's tightening and pushing up rent prices here, too, I'd love to hear from you. jwasserman@sacbee.com. Thank you in advance.



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