Home Front

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

May 28, 2009
CalSTRS and proxy fights

    CalSTRS is the quieter of the two big public pension funds around here, but the votes it casts on proxy fights do carry considerable weight.

    Now the fund, formally known as the California State Teachers' Retirement System, said today it's creating an online system so people can track its proxy votes. The votes will be available through a partnership with www.proxydemocracy.org.

    Like its cross-town rival CalPERS, CalSTRS has traditionally announced its votes on selected high-profile matters. Now, it says, every vote will be available.

May 28, 2009
Finding a bottom?

   Home sale prices inched up again in California in April, the California Association of Realtors said today. The median price of an existing single-family home rose 1.4 percent in April from the month before, to $256,700. This was the second straight month-to-month gain.

     However, the price was still 36.5 percent a year ago.

     The volume of sales jumped 49.2 percent from a year earlier.

     The association said the numbers suggest stability in the market. With two straight month-over-month gains in pricing, "it appears that the median price is now at or near the bottom," said the association's chief economist Leslie Appleton-Young in a press release.

May 27, 2009
Pension funds and budget deficits

      It doesn't take a genius to predict that the state's two big public pension funds, Calpers and Calstrs, could figure prominently in the state's budget mess.

      The two retirement systems are underfunded following a year of terrible investment losses. At some point they'll need hundreds of millions of dollars in additional annual contributions from their various constituencies - the state, the school districts and municipalities, the employees - to pay their pension obligations.

      Calpers has the authority to demand higher payments and plans to do so beginning in July 2010. Calstrs has to go begging the Legislature for permission to raise rates, and is starting to beat the drum for such an increase.

      But it won't come easy. Republicans and Democrats are tossing out the idea of raising retirement ages as a way of cutting pension costs. On former San Diego newsman Ed Mendel's pensions blog, ex-Assemblyman Keith Richman is proposing a one-year pension "holiday" in which the state would defer the $4.6 billion it contributes to the two pension funds. And municipalities, school districts and others that use Calpers and Calstrs for their pensions aren't thrilled about the prospect of higher rates at a time when they're laying off workers.

     Let the fun begin.

May 22, 2009
Online help in the world of foreclosures
Home Front gets frequent questions about where to find help when looking for foreclosed properties to buy and where to find help when you're in trouble with the mortgage.

Sue McAllister at The San Jose Mercury News has compiled a good list for her Bay Area readers and most of the sites will work just as well for people here in Sacramento.

Here are her suggestions and many links for good places to start online.
May 22, 2009
A NY Times economics reporter encounters foreclosure
I have been hearing some buzz about a New York Times Magazine piece by an economics reporter describing his personal trouble with the foreclosure crisis.
  Here is the story, called, "My Personal Credit Crisis."
And here is a rebuttal of sorts from the Huffington Post telling the rest of the story. (Thanks to an alert reader in Sacramento for this).

In the name of full disclosure: Don't wonder about your faithful scribe on the housing crisis. I am current with my mortgage payments.
May 22, 2009
The job numbers are out...

   ...and they're kind of confusing.

    California's unemployment rate actually fell two-tenths of a point, to 11 percent. That was the first decline since last June.

     But don't be so quick to celebrate. Steve Levy, an economic consultant in Palo Alto, says the real number to focus on is payroll jobs. And that figure was pretty weak. We lost 63,700 jobs in April, which was slightly worse than the month before.

    He says this is a sign things are still getting bad.

     The unemployment rate, despite its visibility with the general public, tends to get dismissed by professional economists. It's calculated using a relatively small survey of households. The payroll jobs number is drawn from a larger survey of employers, and it has more credibility.

      Sacramento's unemployment number fell six-tenths of a point, to 10.8 percent. The region actually gained jobs - 200 of them - although the gains seem to be mainly seasonal. Agriculture, for instance, added 1,200 jobs.

     Meanwhile, sectors like retailing (minus 900 jobs) continued to retreat.

    One bit of intrigue was the construction sector. It showed no job growth, which isn't particularly good news considering that April is when it should be gearing up. But Diane Patterson of the state Employment Development Department noted that this was the first time since last August that the construction sector in Sacramento didn't shrink.

    Like I said, kind of confusing.

     Here's an early version of our news story, on our Web site. We'll be updating through the day on www.sacbee.com and will have more in Saturday's paper.

May 21, 2009
Keeping track of unemployment

   Yep, it's almost time again. The state and local unemployment numbers for April will be released Friday (probably around 10 a.m. or so).

    To recap, Sacramento area unemployment hit 11.3 percent in March. The statewide unemployment rate was 11.2 percent.

     If you recall, state officials were trying to find some good news in all this by pointing out that the number of jobs lost in California in March was the smallest in October.

    Nevertheless, the jobless rate keeps climbing and climbing, and chances are the April results won't be any different. See you Friday.


May 21, 2009
Median sales prices finally stabilizing in capital region

Friday update: Here is the complete story in today's Bee.

We aren't going to go too far out on a limb here, but the new MDA DataQuick numbers released for Sacramento about 90 minutes ago show that sales prices may be reaching a low plateau in the region. Prices are roughly the same now for four months in Sacramento County.

Here is a first online version of the April sales story.

And here is a detailed look at sales and pricing by capital-area  ZIP Codes.

Highlights of DataQuick's April statistics for new and existing homes combined:

-- Sacramento County: 2,184 sales at a median price of $165,000, down 28.9 percent from April 2008.

(It should be mentioned here what DataQuick says about these extremely low median prices: "The decline in the median price - that point where half of the homes sold for more and half for less - overstates the decline in the value of the typical home, given that so many of today's sales involve a discounted foreclosure in a erlatively affordable neighborhood.)"

-- Placer County: 478 sales at a median of $295,000, down 16.2 percent from the same time last year.

-- Yolo County: 213 sales with a median price of $242,000, down 21.6 percent from April 2008.

-- El Dorado County: 161 sales at a median price of $313,000, down 17.4 percent from the same time last year.

-- Yuba County: 107 sales with a median price of $156,500, down 21.6 percent from a year earlier.

-- Nevada County: 107 sales with a median price of $322,500, down 25 percent in the past year.

-- Sutter County: 105 sales with a median price of $170,000, down 23.3 percent from April 2008.

-- Amador County: 20 sales at a median price of $180,000, down 34.5 percent from April 2008.

New homes represented just 9.6 percent of closed escrows in the region in April, DataQuick reported. Four years ago, new home sales represented 24.5 percent of closed escrows.

May 20, 2009
After a builder goes under

Newport Beach home builder John Laing Homes came to Sacramento in 1999, had 10 developments going and ranked 13th in home sales last year in the region. It also had plans for a fairly big subdivision in once-booming Lincoln, which, remember, was once the fastest-growing city in California.

Then the builder imploded early this year. Now there's 151 lots for sale in Lincoln, probably for a lot less than the builder paid for them.

A year ago no one could have predicted this for John Laing Homes.

 Any takers?




May 20, 2009
Short sale heaven (or is it that other place?)
This afternoon I happened to ask Jeff Tarbell of Comstock Mortgage about the proliferation of short sales in the Sacramento region.I have heard it said that 55 percent of all homes on the market that aren't repos are just about the next worst thing -an attempted short sale.

Tarbell led me to the Metrolist Services Website and showed me how to find them. (Look for listings marked AS or ASC).  I am still blown away that almost half or more of everything listed there is a short sale. (That's where the owner hopes to persuade his or her lender to accept a sales price below what's owed on the house - to spare the lender the higher costs of foreclosing on the place. These are also places that take almost forever to close as the bank mulls the offers, and then often rejects them as too low. Or the lender holding the "second" rejects it. Or this all takes three months for them to accept, and by that time the original offer is too high for a house that's lost value the whole time. In other words: real estate nightmare). 

I ran a few searches on the site and tallied some percentages:

  • 46 percent of the 56 homes for sale in Folsom between $200,000 and $300,0000 are short sales. 
  • 55 percent of the 87 homes in Rancho Cordova priced between $200,000 and $300,000 are short sales.
  • 44 percent of the 75 homes in Elk Grove priced between $300,000 and $325,000 are short sales.
  • 56 percent of the 118 homes in Lincoln priced between $200,000 and $250,000 are short sales.
May 20, 2009
Poizner: Be wary of the home warranty scams going around

California Insurance Commissioner Steve Poizner sends out this alert, warning consumers to watch out for unlicensed companies hawking home warranty policies in California.

Specifically, he mentions Nationwide Home Warranty, which was ordered in March to stop selling the home protection contracts in the state.


May 19, 2009
More and more affordable
On the heels of last week's California Association of Realtors report that 80 percent of first-time buyers can now afford the median-price starter home in Sacramento, here comes even more astonishing news on affordability from the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

It says that 76 percent of capital-area homes sold in the first quarter of 2008 in El Dorado, Placer, Sacramento and Yolo counties were affordable to households earning the region's median income of $72,800. The HOI pegged the region's median-priced home at $193,000. That's the midpoint where half cost more and half less.

What's amazing about this is how fast this region has become affordable again. Just two years earlier, in the first quarter of 2009, 13.4 percent of homes were affordable to capital-area households earning a median of $67,200.
And Q1 2006? Just 7.9 percent of area homes were affordable to households earning a median of $65,4000.

I looked at some other Western cities that have a lot in common with Sacramento.
(Again, to summarize): 76 percent of homes in the capital are affordable to households earning a median of $72,800. The median priced home was $193,000.


  • Seattle, at $314,000, 57 percent of homes were affordable to households earning a median income of $84,3000.
  • Salt Lake City, at a median price of $231,000, 65.9 percent of houses were affordable to households with a median income of $67,800.
  • Phoenix, at $143,000, 81.2 percent of homes were affordable to households earning the median of $65,900.
  • Las Vegas, at $155,000, 80.6 percent of homes were affordable to households earning the median of $65,400.
  • Denver, at $178,000, 79 percent of homes were affordable to households earning the median income of $76,000.

For a complete look at metro areas and Sacramento in particular, dating back to 1991, check out this index on the main page. (Look for "complete history by metropolitan area")


May 19, 2009
Just when you thought it was safe
Here's a Zillow executive worrying about what happens after the market improves and thousands of us who have been patiently waiting to move up, move out or just move suddenly put our homes on the market all at once and crush a fledgling recovery.

Maybe you thought there was little left to worry about: Here the opening paragraph:

"Just as news of increasing home sales are hitting our ears and possible early signs of bottom are evident in a few hard-hit markets, a contingent of American homeowners seems to be poised to add their own homes to the already-high level of inventory in the market - a move that could stall any recovery in home values."
May 19, 2009
Everything you could possibly want to know about gambling

    The casino industry is in something of a shambles, with the economy forcing cutbacks in Las Vegas and practically everwhere else. Recently we've written about layoffs at

Red Hawk,  Thunder Valley  and the Horizon at Lake Tahoe. 

      Now Bill Eadington, a University of Nevada, Reno, professor often quoted in the paper on gaming industry issues, is hosting a five-day global conference at Tahoe.

      The conference, starting May 25, will be held at Harrah's Lake Tahoe Resort in Stateline. There will be speakers from as far away as Australia, South Africa and Macau, and topics will range from economics to blackjack analysis.

      For more information, call 775-784-1442, or visit www.unr.edu/gaming.



May 19, 2009
Repos still driving existing home sales in Southern California
MDA DataQuick released April sales statistics this morning for Southern California, showing a seventh straight month in which repossessed homes accounted for more than half of sales.
 It was also the 10th straight month of higher sales than the same month a year earlier.
 The Sacramento region is expected to see 13 straight months of that when statistics arrive later this week from DataQuick.

Meanwhile, here is a look at San Diego in particular, where the median is up $10,000 in recent months. San Diego and Sacramento went into the tank together in mid-2006.

"San Diego County home prices inched up $5,000 in April to a median $290,000, MDA DataQuick reported Monday, as sales continued to rise.

Prices have now climbed $10,000 from a low of $280,000 in December and January, although it is unclear whether the increase is due to rising values or a change in the mix of properties changing hands."

May 18, 2009

     In case you missed it, Sacramento's Pacific Ethanol Inc. has been forced into bankruptcy.

     Technically, the company itself hasn't filed - just its four operating plants. The company says it will stay in business, but this marks a new low point for the troubled ethanol industry. The days when people like Bill Gates rushed to invest, and plants were popping up everywhere, are long gone, at least for the time being.

    Analysts speculate that Pacific Ethanol's four plants, including two in Calfiornia could wind up being sold. When Midwest ethanol maker VeraSun went bankrupt, oil refiner Valero Corp. bought its plants at a steep discount.

     We'll have more in Tuesday's paper.  


May 15, 2009
Q1 2009: Sacramento's top homebuilders
Costa Mesa-based Hanley Wood Market Intelligence sends over its list of the top 25 homebuilders in Q1 for El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.

Here's the top 10:

Builder                       Sales             Market share

Pulte Homes               62                      8.6%
Beazer Homes            60                      8.3%
KB Home                    59                      8.1%
JMC                            59                      8.1%
Centex                        58                      8.0%

Lennar                         54                      7.4%
K. Hovnanian                46                      6.3%
Taylor Morrison             34                      4.7%
Del Webb                     28                      3.9%
Standard Pacific            27                      3.7%

Final thought: Pulte owns Del Webb and is merging with Centex. In essence that makes Pulte the capital region's giant- 20.5 percent market share and 148 sales in all.
May 15, 2009
Placer County: fewer April sales than last year
The Placer County Association of Realtors has released its April sales numbers, and Home Front is a little surprised to see fewer sales this year than last for April.

  • 337 closed escrows in April 2009.
  • 351 same month last year.
  • Median price: $280,000, down 18 percent from $344,000 same time in 2008.
May 15, 2009
More and more empty storefronts

   The vacancy rate keeps creeping up at Sacramento-area shopping centers.

    The rate hit 11.8 percent in the first quarter, according to a report released today by Colliers International's Sacramento office.

    That's up from 10.7 percent at the end of 2008. In the third quarter it was 8.8 percent.

     If this makes you feel any better, we have plenty of company: 36 of the 42 markets tracked by Colliers experienced higher vacancy rates in the first quarter.

     The growth of retailers such as Kohl's (which is picking up some of the Mervyns locations around Sacramento) helps. But things are certain to get worse before they get better. The death of Gottschalks Inc. this summer is one of the more notable retail stories we're tracking these days.

May 15, 2009
Drilling down on Sacramento County foreclosures
This just in from the Sacramento Housing and Redevelopment Agency: the first quarter 2009 foreclosure report. This report is great with details you won't find elsewhere - and killer maps.

<br />irst Quarter 2009 Sacramento Foreclosure Tracking Report


      While REO filings have declined slightly from the previous quarter, NOD filings have increased dramatically.  The REO decline is likely due to continued moratoriums by many lenders during the quarter.  The NOD increase, on the other hand, may be due to lenders continuing to work through a backlog created by the September 2008 state law that slowed down the beginning of the foreclosure process.

·       SHRA's Neighborhood Stabilization Program (NSP) target areas, which were chosen to receive federal NSP funds due to their extremely high foreclosure rates and high rates of subprime loans, continue to be hard hit by foreclosures.  Foreclosure filings have declined slightly in the target areas over time, but this is likely due at least in part to the fact that so many properties have already been foreclosed on in these areas that the number of properties remaining to be foreclosed on has been significantly reduced.

May 15, 2009
Buying cars in Smallville

   Looking over the list of Chrysler dealerships targeted for closure is like driving the back roads of small-town America. It's striking how many dealers Chrysler has in out-of-the-way places like Newtown, Conn., and Osceola, Iowa.

      Incredibly, there are two Chrysler dealers in Grass Valley - a perfectly fine community, mind you, but hardly a major metro. Both are going to close, although my colleague Mark Glover notes in today's Bee that they've been essentially moribund for some time anyway.

      Glover says that's been the American way for many years in car buying - the US automakers have flooded the smaller markets with dealerships to corner those markets. It's a strategy that's now giving way to the grim realities of budget cutting as Chrysler fights for survival in bankruptcy court.

     General Motors, also big in small towns, is beginning to eliminate a slew of dealerships as well.

May 14, 2009
Pick your poison, government edition

   The state will lay off 5,000 workers statewide and make other cuts running into the billions as the state tries to wrestle with its budget deficit.

     The impact: more bad news for the economy. Sanjay Varshney, head of the business school at Sacramento State, points out that this was the one stable sector of the economy. Now it's faltering, too. That will hit everything from retail to real estate.

      The alternative could have been higher taxes. But they got raised already in February and there was no political will for raising them even higher. And as Jeff Michael of the University of the Pacific told me, hiking the sales tax another 2 cents would cause economic problems too.

      If you like delving into the details of this kind of stuff, here's a link to the Department of Finance's report on the May budget revisions. Meantime, we'll have plenty more in Friday's paper.

May 14, 2009
The Chrysler hit list

    Chrysler wants to close one fourth of its dealerships, but the hit list it released today leaves off the locations in the immediate Sacramento area.

     Go a little further outside Sacramento, though, and four dealerships are targeted for termination: Liberty Motors Dodge Chrysler in Grass Valley, Mother Lode Motors in Sonora, Oroville Motors in Oroville and Wheeler Jeep in Yuba City.

     Chrysler's list, filed today in US Bankruptcy Court, also includes Folsom Lake Chrysler Jeep, but the bankruptcy lawyers were a little late on that one. The shop folded a couple of weeks ago.

     We'll have more on this in Friday's paper.

May 13, 2009
SAR: April existing home sales about same as March

The Sacramento Association of Realtors just released its April sales report, counting 1,707 escrow closings for existing homes in April in Sacramento County and the city of West Sacramento. That compares with 1,725 sales in March.

Here is the SAR  news release summarizing the month and a look at the major statistics and  a more detailed look by ZIP Codes for the region.

Highlights: Repos were 65 percent of all sales.

 Median price fell ever so slightly at $167,100 compared to $167,500 last month.

There were 3.1 months of inventory - the time it would take to sell all the homes now listed at the current sales pace. That compares to 3.6 months of inventory in March. 

Finally, this year compared to last: 6,546 closed escrows from January through April - 58.6 percent more than 4,128 the same time last year.

May 13, 2009
Builders propose tripling $100 million state tax credit for buyers

A $10,000 state tax credit that has proved more popular than expected with buyers of new unoccupied homes may be greatly expanded. California homebuilders have sponsored AB765 by Assemblywoman Anna Caballero, D-Salinas, and Assemblyman Jose Solorio, D-Santa Ana, to expand the $100 million allocation that went into effect on March 1 to $300 million.

Builders are hoping to see the law passed "within weeks." Gov. Arnold Schwarzenegger isn't committing himself to anything before it lands on his desk. But a spokeswoman said today that he "aggressively pushed for the (original) $10,000 credit in the budget and always wants to explore ways to stimulate the California economy and promote homebuying."

Builders and the lawmakers carrying the bill say a $10,000 tax credit pays $16,000 in revenue to the state treasury and $3,000 to a local goverment. That comes from this 2007 study for the California Homebuilding Foundation, "The Housing Bottom Line."

Also, here is

a fact sheet released earlier today before a media conference call with industry arguments for expanding the tax credit. 

I also made a request to California's Franchise Tax Board - which keeps an excellent Web site on all you need to know about the tax credit - about which geographical regions were heavy with applications so far. They sent this data this afternoon:

"Below are the ten cities for which we have received the most New Home
Credit Applications through last week.  Keep in mind that these
numbers are overstated.  Since we have just begun processing the applications, these numbers include duplicates, revisions, and invalid  applications.  The numbers are not for metropolitan areas, only for applications showing the property address with that actual city name."
City                # of Applications
FRESNO    229    
 BAKERSFIELD    197    
 SAN JOSE    169    
 LOS ANGELES    169    
 SAN FRANCISCO    162    
 SACRAMENTO    139    
 ROSEVILLE    138    
 SAN DIEGO    131    
 CORONA    128    
 CLOVIS    92    

May 12, 2009
Blacks and Latinos take hardest fall in foreclosure crisis
From 1995 to 2008, blacks and Latinos moved into homeownership at a rate not seen since the end of World War II, but now the foreclosure crisis has taken much of it back.

The Pew Hispanic Center has released a major study today that shows the newest to reach the American dream of homeownership have had the hardest time sustaining it.

May 12, 2009
A better Department of Real Estate in California
The California Legislative Analyst's office just minutes ago released a new study on how the state Department of Real Estate might better address educational shortcomings of real estate agents and crack down more effectively on those in the rip-off game so prevalent in this arena.

May 12, 2009
Still running on empty

   The bad news keeps piling up for Sacramento's Pacific Ethanol Inc.

    Today it announced a whopping 46 percent decline in first quarter revenue and issued a fresh warning of a bankruptcy filing.

    You might recall that in late March, Pacific Ethanol said it was on the verge of running out of cash. The company is still operating, somehow, but it said in an SEC filing today that it'll head to bankruptcy court unless it can quickly overhaul its debts or find new capital.

     It's so busy bailing water, it couldn't file its first quarter results on time. But it did reveal preliminary numbers, and they weren't pretty: more losses, and that big drop in revenue. The company's sales are way down - it has essentially shut off most of its plants - and prices are down, too.

May 11, 2009
Thrifty now, but what about tomorrow?

    In my story in Sunday's paper about the paradox of thrift, I explored how our newfound tendency to save rather than spend has serious implications for the economy.

    It just so happens those wise guys at the New York Times ran a similar story Sunday, but from a somewhat different angle. The Times story questioned economists about how permanent this new trend will be. You can find the story here.

May 8, 2009
South light rail line extension makes it into federal budget
As a regular South Line rider - long suffering, long waiting through endless delays for the line to be extended further south - this news release from Congresswoman Doris Matsui's office today warms the heart. The new Obama Administration budget contains funds to make the South Line extension into Elk Grove a reality.

May 8, 2009
Glimmers of hope? Not around here

   For all the (somewhat) encouraging news that keeps popping up nationally, the Sacramento area still looks rocky.

     A forecast out today from the Sacramento Regional Research Institute says the six-county region will lose 54,000 jobs over the next year. That's nearly double the job loss recorded in the previous 12 months.

    "The forecast offers no hope for significant recovery" for at least 12 months, the authors wrote.

    The institute is affiliated with Sac State and SACTO, the Sacramento Area Commerce and Trade Organization.

May 8, 2009
Ripped-off caller: tell the people about loan modification scams

 We get so many calls from people who already have enough trouble trying to keep their homes - and then they give $2,500 to a loan modification company that does nothing. The newest tells her story and asks us to tell the people - again - to be careful out there.

"Not everyone out there has a heart of gold," she says, down $2,500, and getting the runaround when she's asking for her money back. They tell her it's a 60-day refund process. The doors are locked when she goes to visit the company in person.

"These guys are getting rich on other peoples' heartaches," she says.
They are. We did a lot on this subject a few weeks ago, telling people not to pay upfront. Let's reprint some of it in hopes others will see it and spare themselves the grief.

The California Department of Real Estate says this is what borrowers should know:

* If your lender has issued a notice of default against you (after you missed numerous payments) loan-modification companies cannot collect an advance fee, even if they have a real estate license.

* Lawyers are exempt and can charge an upfront fee if they are rendering legal services and operating under the scope of their licenses.

* If you haven't yet received a notice of default you can be charged an advance fee. But:

* The firm must provide an agreement for you to sign that explains what services will be performed, when they will be performed and what they will cost.

* And before you sign it, that agreement must have been sent to the Department of Real Estate for review and permission to collect upfront fees. Those fees must then be held in a trust account and only be spent on agreed-upon services.

Here is the page to see that list: 

When dealing with foreclosure and loan modification offers, be wary of this kind of language:
* "Stop foreclosure now."

* "We guarantee to stop you from foreclosure."

* "Keep your home. We know your home is scheduled to be sold. No problem."

* "We have special relationships with many banks that can speed up case approvals."

* "We can save your home. Guaranteed. Free consultation."

* "We stop foreclosures every day. Our team of professionals can stop yours this week."

Here are some things companies do or say that should raise red flags:
* Guarantees to stop the foreclosure process -- no matter your situation.

* Instructs you not to contact your lender, lawyer or credit or housing counselor.

* Collects a fee before providing any services.

* Tells you to make your mortgage payments to them rather than your lender.
Source: Federal Trade Commission

Here are some places that will help you with a loan modification without a fee:

* NeighborWorks Homeownership Center, Sacramento Region: (916) 452-5356; nwsac.org

* NeighborWorks America and Home Ownership Preservation Foundation national hot line: (888) 995-HOPE (4673).

* Home Loan Counseling Center of Sacramento: (916) 646-2005; hlcc.net

* ByDesign Financial Solutions, Sacramento (formerly Consumer Credit Counseling Service): (800) 750-2227; bydesignsolutions.org

* Sacramento Mutual Housing Association: (916) 453-8400, ext. 43. Staffers can accommodate those who speak Russian, Hmong, Vietnamese and Mien.

* California Senior Legal Hotline: (916) 551-2140 or (800) 222-1753; seniorlegalhotline.org. Staffers specialize in free loan counseling for senior citizens.

May 8, 2009
Unemployment: still bad (but getting a little better?)

       The national unemployment numbers came out today, and there was some good news and bad news in there.

      The bad news was obvious - another 539,000 jobs disappeared in April, and the national unemployment rate went to 8.9 percent, up four-tenths of a point. This is the highest it's been since 1983.

     The Economic Policy Institute, a left-leaning think tank in Washington, declared that the numbers don't deliver "the hopeful signs that many are looking for."

    Ah, but others saw reasons to be cheerful. Sung Won Sohn, economist at CSU Channel Islands, noted that the rate of job loss is slowing. He said "the worst is behind us." In March, for instance, the job loss was nearly 700,000.

    No one is predicting a quick end to the recession. Even by the most optimistic scenarios, unemployment will keep rising for quite some time.

     Here's a story about the unemployment numbers from the New York Times.    

May 7, 2009
Former Elk Grove Realtor/loan broker indicted by U.S.

The U.S. Department of Justice announced indictments of Dameene Dedrick and Roy Rice, both formerly of Elk Grove on four counts of bank fraud and four counts of false loan as part of a "mortgage fraud scheme." 

The news release is here.

May 7, 2009
Top 100 U.S. home builders in 2008 - Elliott Homes #92
Builder Online Magazine has released its annual ranking of the top 100 U.S. homebuilders for 2008. The big corporate builders that rule the Sacramento market - D.R. Horton, Pulte, Centex, Lennar and KB Home - also rule nationally, the list shows.

 Elliott Homes based in Folsom was ranked 92nd in the new survey, the lone privately-owned builder based in the capital region to make the list.

May 7, 2009
"Elaborate real estate scam" lands jail time for Nevada Co. man
Nevada County's Thomas Hastert pleaded guilty to 59 felony counts today of embezzlement, securities fraud and selling unregistered securities, putting him in line to spend five years in prison, says California Attorney General Jerry Brown in this news release.

May 7, 2009
A new casino's so-so results

   We got our first glimpse today at how the new Red Hawk Casino is doing, and the results are...OK.

    Lakes Entertainment Inc., the Minneapolis firm that manages the Shingle Springs gambling palace, said today that the crummy economy is hurting Red Hawk's "ability to achieve consistently strong operating results," in the words of CEO Lyle Berman.

    This is in line with the general malaise in the casino industry. You'll recall that just in the last week we've reported on layoffs at Thunder Valley and a permanent downsizing at Lake Tahoe's Horizon casino, which is eliminating table games.


May 6, 2009
No gains yet in capital-area home equity

Home values in El Dorado, Placer, Sacramento and Yolo counties dropped by $7.3 billion in the first three months of 2009 and have lost $40 billion in the past year, according to online real estate evaluator Zillow.com.

The Seattle firm estimates that 35.4 percent of homeowners in the four-county area now owe more on their mortgages than their homes are worth.

That's up from 33.9 percent in the fourth quarter of 2008, according to Zillow.

Nationally, 21.9 percent of homeowners had negative equity in the first quarter of 2009, said Zillow in a news release today.

In the capital region, it's worst for those who bought homes the past five years. Zillow said 68 percent of those Sacramento-area homeowners have negative equity.

In Yuba and Sutter counties, 78 percent of those who bought in the past five years owe more than their homes are worth, Zillow reported.

Here are more detailed charts for El Dorado, Placer, Sacramento and Yolo counties and Yuba and Sutter counties.

CNBC, meanwhile, featured a top Zillow executive talking about the national data and roughed him up a little about its accuracy:

May 5, 2009
Judge halts foreclosures in South Carolina
It's being described as unprecedented.A judge in South Carolina has ordered a halt to foreclosures to give more time for Obama Administration loan modification efforts to work. It's estimate this ruling may affect up to 5,000 homeowners.
May 5, 2009
Davis ranks 19th on top 25 towns to live well
Davis makes the list along with eight other California cities in a ranking of America's Top 25 Towns to Live Well.

What's it take? Cultural amenities that can compete with those in bigger cities and a business environment with high education levels, good salaries, lots of patents and start-ups.

19. Davis, Calif.

Population: 68,660
Location: Between Sacramento and the Bay Area, though definitely solidly part of the Sacramento metro area.
Median income: $52,322

Strongest categories: Davis attracts a high share of people with a bachelor's degree or higher (70%) and international workers with education (who represent 6% of the adult labor force). A college town, it's stocked stocked with plenty of restaurants and bars.

Drawbacks: It's a decent hike to Northern California business capitals San Francisco and San Jose. It lacks the world-class entertainment those cities regularly attract. Further, Californians earning $52,322 have a difficult time making ends meet.

Data provided by ZoomProspector.com

May 5, 2009
The housing boom comes to this...
Investors are buying subdivsions and tearing down houses rather than try to sell them according to a pair of stories today in The Wall Street Journal and Los Angeles Times
and this You Tube video from Southern California.

May 4, 2009
New York Times on Sacramento: Is this what bottom looks like?
Interesting take here on Sacramento - as a possible candidate for touching bottom ahead of the rest of the U.S. - in The New York Times. 

 Sales are strong, inventory is down and prices are cheap as 2001. Except for fears about another pile of foreclosures coming onto the market the story suggests this is what it looks like historically about six months before a market touches bottom.
May 4, 2009
Slot machines, income taxes and a stubborn recession

     The national news continues to brighten a bit here and there. Today we had a 200-point jump in the stock market, thanks to good news on housing sales.

     Around here, though, we still have more than our share of bad news to dribble out, signifying the recession is far from over. Earlier today we learned that the mega-palace known as Thunder Valley Casino is laying off 5 percent of its employees. 

     Just a little while ago, the State Controller's Office released the final state personal income tax revenue collection figures for April. The numbers were less than ideal. Not only was revenue well below April a year ago, the state is now running $700 million behind forecast for the fiscal year.

May 4, 2009
Why these foreclosures keep coming
Here, in a letter from a Sacramento-area homeowner trying to work out something, anything with his bank - so far not getting much help, he says - is a look from street level at the common phenomenon called "walking away."

Writer says:  "I am amazed at how freely folks I work with and am acquainted with discuss how they plan to skip mortgage payments, extend the foreclosure process by filing bankruptcy and any other number of convoluted schemes to attempt to free themselves from the burden of a crushing mortgage on a home worth far less than is owed.
 I understand the frustration that they are feeling yet can't help but think that the way they and the banks are handling things will lead to larger fiscal problems in the future.  It seems that the banks, empowered by the government, are rewarding poor consumer behavior and punishing those of us that are looking for real solutions that make fiscal sense to the consumer as well as the financial institutions."

May 4, 2009
Tower North

    You may have missed it, but my colleague M.S. Enkoji had a brief story over the weekend about the old Tower Records on Watt Avenue is becoming a Goodwill Industries thrift shop. 

     Not to take anything away from the good work done by the folks at Goodwill, but there's something a little sad about this. The Watt site is one of the iconic retail locations in all of Sacramento, remember. Originally known as Tower North, the outlet was the first stand-alone Tower Records that ever opened, in 1960. The original Tower opened in the back of the old Tower drugstore on Broadway.

    The chain became a global powerhouse. It folded in 2006.

May 1, 2009
Mortgage Rates 101
An editor forwarded me this great Q&A about mortgage mortgage interest rates from The AP's Adrian Sainz.

Highlights: Why can't I get rates as low as those advertised every week by Freddie Mac?
 How does my FICO score play into this?
Why do rates change by the hour?
 What are points?

It's all here. Pass it onto your friends.
May 1, 2009
Numbers, numbers, we have numbers
 .....These are in from Metrostudy, a Houston consultant that tracks the home building industry. It places Sacramento last on a list of major American cities - where last really means best.

The category here is months of inventory, the time it would take to sell all the finished, but empty unsold new houses in your market. Sacramento is one of three metros - along with Minneapolis and Colorado Springs - where there were fewer empty unsold homes in Q1 2009 than in Q1 2008.

Builders in all the other metros are still finishing more new houses than they can sell:

A few highlights:

City                     Months of Inventory Q1 '09            MOI Q1 2008        % change 1 year
Sacramento                        3.0                                    4.0                        -24%
San Joaquin Valley             3.7                                    3.4                          +9%
Atlanta                               8.8                                    7.1                         +23% 
Calif. Inland Empire             4.6                                    3.6                         +27%
Phoenix                              4.3                                    3.0                         +44%
San Diego                           9.1                                    6.1                         +51%
Las Vegas                           9.4                                    5.2                         +81%*

*Worst in U.S.

Says Greg Gross, who heads Metrostudy's Sacramento-based Northern California office: "Basically, Sacramento has outperformed the other markets that we track based on months of supply improvement."
May 1, 2009
One couple: same languishing industry
A Bee colleague is starting the reporting next week on a story about Sacramento-area couples who are in the same industry who are feeling a double-whammy pinch of this economic downtown. It doesn't take a rocket scientist to guess that real estate, mortgage lending, title searching and homebuilding might be prime arenas for this phenomenon.

If this means you and you are willing to talk a bit about how you are making do, please contact Anita Creamer at 916-321-1136 or acreamer@sacbee.com. Thanks in advance.

May 1, 2009
Sacramento's St. Anton Partners: a top 10 U.S. developer

Hanley Wood's Affordable Housing Finance Magazine has ranked Sacramento-based apartment developer St. Anton Partners eighth on a list of the nation's top 50 affordable housing developers.

That's up from 29th a year, says a spokeswoman for the firm.

 St. Anton, a for-profit developer that specializes in affordable developments financed with tax credits, has five projects going at the moment. And that's a time when conventional market-rate apartment construction has virtually ceased in the capital region.

May 1, 2009
Bankruptcy judges will not be rewriting any mortgages
 The U.S. Senate has rejected a proposal near to the hearts of many consumer groups that would have allowed bankruptcy judges to arbitrarily rewrite mortgages.

  The idea, a key part of the Obama Administration's foreclosure-fighting efforts, was always an uphill struggle against powerful bank lobbies which opposed it. Only Citibank came on board for the idea. Consumer groups called it a powerful tool that would have let judges lower the amounts owed to today's values - enabling people to keep making payments and stay in their homes.

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