A blog about the economy and the Sacramento-area real estate market.
August 31, 2009
August 31, 2009
Here at Home Front we love to walk, and have a great Midtown location in which to get out and see the sights and old houses. Home in Elk Grove is also a great location with a trail three houses away and a Raley's and two parks within an easy hike.There's little finer than early mornings and late evenings in the Delta Breeze when people are out walking their dogs and kids.
Therefore I share thisnewly released and detailed report contending that homes in neighborhoods that are conducive to walking to parks and stores have a nice premium when it comes to values.
August 31, 2009
Time uses his example to frame the age-old question: Is now a good time to buy?
Choe first made the magazine in June 2005 for the amazingly prescient decision to sell his house for $369,000 - twice what he paid for it in 2002 - and rent for awhile. Time then called it "the (surprising) case for renting."
In that 2005 issue the cover showed America's love affair with houses. If ever a cartoon said a thousand words and evokes a thousand memories of great times that one does. Choe appeared in that light to be a bit of a kook for selling in a rising market and renting.
Years later, what's better than national recognition for calling it right on the money?
August 31, 2009
Listen to a replay here:
Herber came out swinging against the project's design and called the developer's plan to bury tons of toxic waste below a park site - one that appears headed for approval by the state - a "toxic time bomb."
Petrovich got ticked off at that, saying it's the first he's heard that kind of concern. He called it the newest example of raising a new issue to derail city approval of his infill project on a 72-acre former railyard site between Land Park and Curtis Park.
Petrovich threw his own bomb, charging that an affluent neighborhod that is 98 percent white is trying to prevent commercial development that would bring in shoppers from nearby Oak Park and Hollywood Park, which have higher concentrations of people of color.
"I think we're talking about a high-tech way of bias, of not letting other people come in," he said.
Herber said that is hardly the case.
"Absolutely not," she said. "We stand united with Land Park, Oak Park and Hollywood Park. We absolutely believe it (the commercial aspect) should be neighborhood-serving, not retail coming from the outside in."
Petrovich repeated his threat that if the neighborhood association manages to kill his project at City Hall or sues to stop it he will use the site for its zoned industrial purpose - for a cement batch plant, rendering plant or bus terminal or something similar.
Said Herber: "That is ludicrous." She said Petrovich would need a special permit and "I do not think the City Council would do that."
Petrovich said he needs no permit to put up buildings smaller than 40,000 square feet.
So goes the battle for public opinion about the city's second-largest infill project. The first hearings are expected before the Sacramento Planning Commission in early October. A city council vote would follow sometime before the end of the year.
August 28, 2009
The pending closure of the NUMMI auto plant in Fremont is triggering an instant debate on the factors behind Toyota's decision.
The leading suspect, according to business lobbyists, is California's business climate.
The California Manufacturers & Technology Association today released a statement saying the state has been losing factory jobs at an alarming pace, in part because of high taxes and red tape. "These losses cannot be blamed solely on the recession. Our problems started long before the country's mortgage and stock market meltdowns," the association said.
Toyota's thought process may never be fully known. It's clear that the recession had something to do with this. Because of the weak economy, the company is severely plagued with over-capacity, and something had to give. NUMMI became an obvious target for closure when General Motors pulled out of the joint venture that ran the plant with Toyota.
But business lobbyists will no doubt point to the fact that Toyota will continue making NUMMI's products at other plants in North America. The Corolla will be made in Cambridge, Ontario, and the Tacoma pickup will be made in San Antonio, Texas.
August 28, 2009
As if CalPERS doesn't have enough problems. Now it's fending off a $17.2 million claim by Lehman Brothers, the brokerage firm whose bankruptcy helped trigger the collapse of the stock market.
The dispute is over something called a swap contract, a complicated arrangement in which two parties promise to make payments to each other in the future. Four days after Lehman filed for bankruptcy last September, CalPERS terminated the contract it had with Lehman while still owing the brokerage firm $17.2 million.
Lehman, through its bankruptcy lawyers, is demanding the money. CalPERS acknowledges the debt but doesn't want to pay it. It says Lehman first must pay the $433 million it owes CalPERS.
"It would be unjust to require CalPERS to pay over to (Lehman's) wholly-owned subsidiary $17.1 million (plus interest) when it is owed more than 25 times that amount," CalPERS said in papers filed by Sacramento attorney Steve Felderstein in U.S. Bankruptcy Court in New York.
August 27, 2009
Toyota Motor Corp. will close the NUMMI auto plant in Fremont next March.
The decision didn't come as a surprise but will prove devastating to the economy of Northern California. The East Bay plant employs 4,500 workers and is responsible for thousands of additional jobs in parts manufacturing and distribution. Thousands of Central Valley jobs will be lost.
"It's a big blow. For the East Bay and northern San Joaquin Valley, it's absolutely huge. An auto plants sends out waves when it closes, not just ripples," said Jeff Michael, an economist at the University of the Pacific.
As many as half the plant's employees commute from the Central Valley.
Toyota's spokeswoman Cindy Knight confirmed to the Associated Press that the plant will close next March.
The plant, formally known as New United Motor Manufacturing Inc., has been a joint venture with General Motors Corp., but its future came into grave doubt after GM dissolved the partnership following its bankruptcy reorganization. The last GM Pontiac Vibe rolled off the assembly line earlier this month, and the plant has continued to build Toyota Coollas and Tacomas there.
State officials, led by Gov. Arnold Schwarzenegger, had mounted a campaign to save the plant by offering tax breaks and other incentives.
August 27, 2009
California income taxes will get nudged even higher for 2009, thanks to the Consumer Price Index.
New tax brackets prepared by the Franchise Tax Board show that income taxes will rise slightly because of a 1.5 percent decline in the CPI.
That's in addition to the quarter-point increase in rates enacted by the Legislature in February as part of a deal to close the state's deficit.
Since 1982, tax brackets have been adjusted upward every year to account for inflation. It's a way of preventing Californians from paying higher taxes when their incomes merely keep pace with inflation.
But the system works in reverse, too. Because prices fell, tax brackets will fall, too.
In the 2008 rates, for instance, a single taxpayer had to earn at least $26,821 to reach the 6 percent income tax bracket. This year, the taxpayer will reach that bracket by earning as little as $26,419.
"You could pay the exact same wage in 2009 and pay more taxes," said Perry Ghilarducci, a Sacramento accountant and board member of the California Board of CPAs.
"That's a horrible result," he said.
Of course, there really is no 6 percent bracket anymore; it's now a 6.25 percent bracket because of the Legislature's move in February.
The new brackets haven't been released yet by the Franchise Tax Board but were published on Spidell's California Taxletter, a private tax-information service based in Anaheim.
August 21, 2009
Late Friday Update:
And here is the ZIP Code chart to drill deeper into price/sales in the neighborhoods.
Sacramento-area sales of new and existing homes combined reached another 2009 high in July as 3,815 buyers closed escrow in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, researcher MDA DataQuick reported this morning.
That's up from 3,758 sales in June in the capital region - but down from 4,126 last year. It's the second month in a row that home sales have fallen below last year's levels. Analysts say it's because repos pushed up sales so dramatically last year. There are far fewer on the market now.
Median price rose to $180,000 in Sacramento County - the largest sector of the market with six in 10 sales. That's after two months at $175,000 - well above the low earlier this year of $160K.
Perhaps more significantly, the rate of decline in prices has slowed dramatically in the county. The July 2009 median is down just 14.3 percent from the same month last year after many months of 30 percent and higher year-over-year declines.
More Sacramento County stats:
- 38 percent of July sales were priced below $150,000.
- 6.6 percent were $400,000 and above.
- 43.2 percent of sales used FHA loans typically used by first-time buyers.
- 24.8 percent of sales by absentee buyers presumed to be investors.
- 58.7 percent of sales were foreclosed properties - lowest percentage since April 2008.
Here is an early online report in The Bee.
August 21, 2009
California's unemployment rate continued climbing to 11.9 percent last month but there was encouraging news as the pace of job losses moderated.
The Employment Development Department said the state's unemployment rate jumped three-tenths of a percentage point during the month. The 11.9 percent was the highest posted in the state's modern records, which date to 1976.
But the state lost just 35,800 jobs during the month. That's the smallest loss since last August and may suggest an easing of the downturn. The state has been losing at least 60,000 jobs a month for the past several months.
Sacramento's unemployment rate rose to 11.8 percent, up a tenth of a point from a revised 11.7 percent in June. The region lost 8,000 jobs during the month, with much of the job loss coming in education as summer schedules kicked in. In a year's time, the region has lost 45,700 jobs, or 5.1 percent, and unemployment has risen 4.6 percentage points.
One industry that's gaining jobs in Sacramento: the financial sector, which added 400 jobs due to the uptick in real estate activity. It was only the third time since 2006 that financial services added jobs, said EDD labor market consultant Diane Patterson.
The state numbers suggest "the worst is behind us but we're not out of the woods yet," said Dennis Meyers, an economist at the state Department of Finance.
But there are still many trouble spots. Construction employment fell by nearly 10,000 in California, showing that a turnaround in homebuilding is still a ways off. Single-family housing starts in the Sacramento region fell during the month, according to the California Building Industry Association.
The numbers also suggest a slowdown in the health-care industry, which had been a reliable job creator even as other industries faltered. Kaiser Permanente recently cut 1,850 jobs statewide. "We could always count on (health care) while everything else was going down," said Michael Bernick, a former EDD director and now a senior fellow with the Milken Institute.
California was tied with Oregon for the fourth-highest unemployment rate in the nation. Michigan was No. 1 at 15 percent, followed by Rhode Island (12.7 percent) and Nevada (12.5 percent).
Stephen Levy, who runs the Center for Continuing Study of the California Economy, said in a report that California is still doing "worse than the nation." He added that he saw little hope for optimism in the July numbers.0
The news came amid further signs of easing of the national recession. The stock market soared after the National Association of Realtors announced better-than-expected home sales for July and Federal Reserve Chairman Ben Bernanke said the economy is about to begin a recovery.
August 20, 2009
Some of this, especially the Fed's recent name and shame list of who's doing what in terms of loan modifications must be having some effects at banks.Wells Fargo reached out recently to the media with new numbers about their loan modifications. Today, Citi did the same, saying it will announce them next week. Both moves are unusual.
August 20, 2009
Just minutes ago the Mortgage Bankers Association in Washington, D.C., concluded its quarterly conference call with reporters, announcing in a news release here thatjob losses are clearly the new driver of mortgage problems nationally, and especially in states like California where home values have been dropping.
Here's a California-specific look from the MBA.
The once-safe prime fixed-rate 30-year loan is clearly the new face of the mortgage crisis, said MBA officials. The problem for many people in declining markets is there's no way out of the jam, said MBA VP and Chief Economist Jay Brinkmann. Many people financed to the edge of their ability to make payments and can't refinance because they're underwater. That doesn't give a bank much to work with in the situation.
Be glad, Californians, you don't live in Florida.
It's the worst place nationally to have a mortgage or own a house for that matter.
Brinkmann said 12 percent of all the mortgages in the Sunshine State are in the foreclosure process - that is, somewhere between a notice of default reached after three missed payments and being foreclosed.
In California, 6 percent of all mortgages are in the foreclosure process.
August 19, 2009
CalPERS filed suit today over Gov. Arnold Schwarzenegger's furlough program, saying its 2,000 employees shouldn't be subjected to the unpaid days off.
The suit, filed in San Francisco Superior Court, says CalPERS employees shouldn't be subjected to furloughs because the savings don't help the general fund. The furloughs are "inhibiting our ability to provide services to our members and to meet our contractual responsibilities to local employers," CalPERS Board President Rob Feckner said in a press release.
He said state law doesn't allow the budget problems to "jeopardize the financial soundness of CalPERS or the benefits that we are obligated to pay retirees."
Most state workers are being forced to take three unpaid furlough days a month as the state tries to conserve cash. The state's constitutional officers have refused to impose furloughs on their employees, setting off a legal battle with Schwarzenegger. Several unions have sued as well, although Schwarzenegger has won all but one of those challenges.
Schwarzenegger's spokesman Aaron McLear said CalPERS "must figure out how to operate more efficiently," like other state agencies. He said it's irrelevant that CalPERS employees aren't paid from the general fund.
August 19, 2009
This one's in Las Vegas, and I'm bringing it up only because of the Sacramento region's increasing reliance on gaming, and because this case is tied to the Cal Neva at Lake Tahoe.
Canyon Capital Realty Advisors, the Los Angeles investment firm whose executives include ex-Treasurer Phil Angelides, said today it has foreclosed on the Greek Isles casino just off the Vegas Strip. The Greek Isles is the former Debbie Reynolds Hotel and Casino; Canyon Capital and a partner, Spectrum Group Management LLC, loaned $56 million on the property two years ago and began foreclosure proceedings last December.
You may recall that Canyon Capital is trying to unload the Cal Neva after a similar foreclosure earlier this year. The Cal Neva has its own celebrity legacy, of course; the smallish resort at the north end of Tahoe was once owned by Frank Sinatra.
August 18, 2009
Wednesday morning update: Here is the full story in this morning's Bee.
It's done. Two of the capital region's biggest home building companies - Pulte Homes and Centex Homes - won shareholder votes today to merge into the nation's largest builder - and one that will assume a powerful 17 percent market share in the six-county Sacramento area. Here is the company'sofficial news release on the merger this morning.
We're working up a full version of the story for Wednesday's paper, but here's an early look at what this entails. Locally, it means about 70 employees of each Sacramento division will merge into one entity likely to be headquartered in Roseville as Pulte Homes. Not everyone is going to be able to stay on the job. Sacramento-Reno Division President Chris Cady said in a telephone interview minutes ago that some duplicative office jobs will have to be elminated as part of the merger.
Cady has been division chief of Pulte's Sacramento-based operations for 13 years.
The new entity will be called Pulte Homes Inc. and trade under the ticker symbol of PHM. Regionally, it combines Centex's specialty in starter homes, Pulte's move-up specialty and Del Webb's active adult and retirement communities. Pulte reps say they will continue to use the Centex brand name.
Statewide, the two entities have about 500 employees. Its divisions will be headquartered in Sacramento, Pleasanton and Irvine.
Here's a by-the-numbers chart:
The three entities of the new Pulte Group - Pulte, Centex and Del Webb - collectively account for 16.9 percent of the capital region's 1,764 new-home sales the first half of 2009, reporting 299 sales. Top 10 homebuilder market share in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, as it looked before the merger approved by Pulte andCentex shareholders Tuesday.
Builder Sales Market Share
KB Home 161 9.1%
Centex Homes 143 8.1%
Lennar 132 7.5%
JMC Homes 123 7.0%
Beazer Homes 112 6.3%
Taylor Morrison, Inc. 102 5.8%
Pulte Homes 89 5.0%
K. Hovnanaian 82 4.6%
Del Webb 67 3.8%
D.R. Horton 65 3.7%
Source: Hanley Wood Market Intelligence
August 17, 2009
A Southern California investment firm announced this morning that it has purchased John Laing Home's 25-acre Folsom development named Folsom Treehouse.
PCCP, LLC, formerly known as Pacific Coast Capital Partners, picked up the property in a foreclosure sale last week.That's good news for those who bought at least 64 homes and condos, according to Hanley Wood Market Intelligence, and then saw the project stall out with Laing's demise. The Orange County-based builder imploded earlier this year after building homes in Sacramento since 1999.
The firm said it will reopen the subdivision for sales in the fourth quarter. The new owner says it's teaming with Bay Area-based Signature Properties to build out the 291-lot development.
August 16, 2009
Sierra Curtis Neighborhood Association President Rosanna Herber, who believes the design is too suburban-like and auto-centric, asks where's the village in Curtis Park Village?
Land use attorney Tina Thomas, attorney for the project and a Curtis Park resident, contends the project is the definition of "smart growth" and will be a vibrant addition to the old neighborhood.
August 14, 2009
Great reaction, and two amusing invitations today in response to a column about the above 817-square-foot house in Natomas, and how millions of Americans lived in homes that size as recently as the 1940s.
A reader in Land Park touted her 526-square-foot house, saying her PG&E bill is about $8 monthly and her SMUD bill about $20 a month. Come and see it, she said.
Another in Auburn offered an invitation to visit a house he built "just under 500 square feet." It's a two-story with a 288-square-foot garage that can be used for living space. I loved this writer's line: "This little place has gotten a lot of attention over the last few years; it used to be a novelty, but now it's starting to make sense."
Another reader wrote about how most people live in one part of their house day in and out - and don't need so much space. She says: "If the recession brings the industry back to home sizes that reflect how people really live, I'll be very happy."
A fourth, a former home building company executive, wrote about his company's struggles to design a smaller house that would make a profit: "Small houses still need heating/air conditioning systems, bathrooms and a kitchen - the expensive parts of a house - so the builder's cost per square foot goes through the roof and he simply can't charge buyers a price point high enough to make money. Sad, but true."
Photo by Sacramento Bee, Randall Benton - K. Hovnanian Homes Production Manager Dave Cook exits the company's 817-square-foot house at Westshore in Natomas.
August 14, 2009
After a long haul of rising affordability for first-time buyers, home prices in Sacramento County were slighly less affordable in the second quarter than in the first quarter of 2009, says this release today from the California Association of Realtors.
The report says 79 percent of first-time buyer households in Sacramento County have enough income to afford the median priced starter home at $150,870 and make a $900 monthly payment.
In the first quarter of 2009, 80 percent of Sacramento County first-timers could swing it, said CAR. Prices have risen a little since Q1 as bidding wars have broken out over declining repo supplies.
- 67 percent of first-time buyers could do a deal in the second quarter of 2009 compared with 49 percent the same time a year earlier.
- The median price of an entry-level home in California was $224,180 in the second quarter.
- The estimated monthly payment including taxes and insurance was $1,330 in the second quarter of 2009.
- The minimum household income needed to purchase an entry-level home in California in the second quarter of 2009 was $39,930.
August 14, 2009
That's the take at Sacramento rsearcher TrendGraphix, which says there are plenty of them in pending status. All that and more about July sales in the region in this August 2009 Lyon Press Release.
August 13, 2009
The Sacramento Association of Realtors just released its July numbers showing that the median sales price of an existing home in Sacramento County and the city of West Sacramento held steady at $180,000 for the third month in a row.
The SAR counted 1,848 closed escrows in July, up 6 percent from June, but down 6.6 percent from the same time last year. It's the second month in a row that sales failed to post year-over-year gains. Many real estate agents say it's because there are fewer bank repos on the market this summer than last. Banks have been holding them back even as they ramp up foreclosures.
Bank repos accounted for 49 percent of sales - their first drop below 50 percent in many months. Short sales - in which banks accept less than owed to avoid foreclosing - accounted for almost 17 percent of sales. That's about the same as last month.
The specific SAR reports follow:
The ZIP Code Report.
Sacramento Bee Photo
August 13, 2009
This video, courtesy River City Bank, shows CEO Steve Fleming discussing the commercial real estate market in the Sacramento area.
It's not a happy video. "We built way too many buildings in the good times," he says. "The demand for space has fallen off a cliff."
August 13, 2009
In Sacramento-Arden-Arcade-Roseville-Woodland, 257,871, or 51.10 percent of all properties with a mortgage, are in negative equity.
Santa Ana-based First American CoreLogic just minutes ago released a grim look at the mortgage crisis, reporting that32.2 percent of all U.S. mortgages were tied to homes worth less than the amount of their loans.
In California, it says, 42 percent of mortgages are in that condition often referred to as "under water." The report says 2.9 million California mortgages are in a state of negative equity and 3.1 million more are nearing it as the housing crisis persists and the economy worsens.
Nationally, 15.2 million mortgages tied to $3.4 trillion worth of residential property are in a negative equity position, and consequently in some danger of foreclosure, says First American.
The firm didn't immediately have a Sacramento-area breakdown, but in the past has said that more than one-third of the region's mortgages were in that condition. We have an email into the firm to try and get the regional picture.
"Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock such as a job loss, illness or other adverse situation. Given that negative equity did not increase this quarter and home prices declines are moderating or flattening, we may be at the peak of the negative equity cycle. However, until negative equity recedes and unemployment declines, mortgage risk will continue to be very elevated," said Mark Fleming, chief economist for First American CoreLogic.
August 13, 2009
Construction begins on affordable senior housing; Eskaton Roseville Manor slated to open next year with 49 units
Located across the street from Del Webb Sun City's
southerly entrance, Eskaton Roseville Manor will provide much-needed affordable
It will consist of 49 one-bedroom units of affordable senior rentals, households qualifying as low and extremely low-income. Groundbreaking ceremonies were held July 30, with completion and tenant move-ins beginning October 2010
The City of Roseville's Redevelopment Agency reserved $500,000 toward project costs over the past five years, while Eskaton secured all of the financing necessary to fully fund the development; staff also secured $3.4 million in a HOME grant (a competitive federal/state grant process) as well as helped Eskaton obtain $5.8 million in HUD funding to finance the project. With a HUD rental assistance component, their rent will be as low as $210 month.
August 12, 2009
The insurance industry called for a 22.8 percent increase in workers' compensation premiums today, earning a quick scolding from Insurance Commissioner Steve Poizner.
Insurers are free to raise rates as they please, and the recommendation by the industry-supported Workers Compensation Insurance Rating Bureau signals that rates are likely to go up again. The new rates would take affect next January.
Rates went up roughly 10 percent last month, although premiums remain far below the 2003 peak, when soaring premiums prompted a legislative overhaul of the system.
Poizner said the industry's recommendation would have a "devastating effect" on small businesses. He said he will scrutinize the recommendation.
August 12, 2009
Next Tuesday closes a colossal merger in the nation's home building industry, maybe the biggest ever, the union of Pulte Homes of Bloomfield Hills, Mich. (PHM) and Dallas-based Centex Homes (CTX).
Both firms, individually, are already among the capital region's biggest builders. Now, the merger will create a Wall Street giant in the region that can take a buyer from Centex's traditional starter homes to Pulte's traditional move-up homes to Del Webb's houses in post-55 adult communities.
The three entities collectively held a 17 percent market share of new-home sales the first half of 2009 in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to Hanley Wood Market Intelligence of Costa Mesa.
Right now, the big issue is new office space for two divisions housed separately on Douglas Boulevard in Roseville and Granite Bay. "We will consolidate into a new office," said Chris Cady, long-time president of Pulte's Sacramento division. "Both leases are up and we're talking to landlords for new space. It will be somewhere in the corridor," he said.
August 12, 2009
We've written lately about the financial stresses facing Stanley Thomas, the Georgia developer who's overhauling Sacramento's downtown railyard. Because of cash-flow issues, Thomas has been sued by former contractors and partners for millions of dollars. City officials say the project has been hurt by delays in state funding but is generally heading in the right direction.
In the interest of fair play, we provide a link to a story in today's New York Times about the promise the railyard project holds. It's an upbeat story, to say the least, without a hint of the problems the project is facing.
August 10, 2009
These things happen. But the regional sales tally was the lowest since January, when builders sold 163 homes, reported the CBIA, a trade group for state homebuilders.
It rather flies in the face of more encouraging news nationally on the new-home construction front. But sales are still very weak here as builders face significant competition from discounted bank repos. These repos still account for more than half the region's sales.
Monthly sales totals in the four-county area by month:
June sales fell 43 percent from May, and were down 57 percent from June 2008, according to Costa Mesa-based Hanley Wood Market Intelligence. The firm compiles statistics for the CBIA monthly sales reports.
Statewide, builders reported 2,607 June sales. That was 13.6 percent fewer than in May and down 26 percent from the same time last year. CBIA execs called it weaker than expected and called again for the state Legislature to extend a $10,000 tax credit for buyers of new unoccupied homes in the state. The tax credit, which began in March, ran out in July due to better-than-expected demand.
Monday, the National Association of Home Builders, also called on Congress to extend the nation's $8,000 first-time buyer tax credit for another year.
Hanley Wood research executive Jonathan Dienhart said today he expects statewide sales to match last year's levels in coming months. But he cautioned in a statement, "It will definitely take a longer time to start mounting a significant recovery with home purchase tax credits due to expire and the broader economy continuing to struggle."
Builders in the four-county Sacramento area plus Yuba and Sutter counties sold 1,764 homes the first half of 2009, Hanley Wood reported. That puts them on track to finish well behind last year's 4,847 sales.
Top capital builders during the first half of 2009, according to Hanley Wood:
1) KB Home of Los Angeles, 161 sales, 9.1% market share.
2) Dallas-based Centex Homes, 143 sales, 8.1% market share.
3) Miami-based Lennar Homes, 132 sales, 7.5% market share.
4) JMC Homes of Roseville, 123 sales, 7% market share.
5) Beazer Homes, headquartered in Atlanta, 112 sales, 6.3 percent market share.
Other builders in the top 10: Arizona-based Taylor Morrison, Michigan-based Pulte Homes, New Jersey-based K. Hovnanian Homes, Michigan-based Del Webb and Texas-based D.R. Horton.
As an aside, the combined entity of Pulte, Centex and Del Webb - the result of a Centex/Pulte merger to be finalized later this year - accounted for 299 of the region's 1,764 first-half sales, a whopping 17 percent market share.
August 10, 2009
As the first local builder to go under as the housing bust gathered steam here in Sacramento, it was probably inevitable that Dunmore would be among the first rumored to be engaged in some kind of comeback.
Not so, Dunmore, 54, said in a phone conversation. Not yet. He has no new limited liability corporation to sniff around for land to start over.
"I'm always looking. I'm always looking at opportunities," said Dunmore. "I can't really say I've found anything at this time. But I'm still in the hunt if some opportunity pops up. But there's nothing on the horizon."
Dunmore Homes filed for bankruptcy in Nov. 2007 and was liquidated in Feb. 2008 - after more than a half century in business and construction of 22,000 homes. Dunmore described the current building industry economy in the capital region as "pretty flat." But at least it's finally stopped getting worse, he said.
August 7, 2009
Pacific Ethanol Inc., the Sacramento ethanol maker mired in bankruptcy, reported higher second quarter losses today.
The company, which put most of its operations into Chapter 11 bankruptcy protection in May, said its second quarter loss grew to $27.4 million from $8.3 million a year earlier.
The per-share loss grew to 49 cents from 23 cents.
Revenue fell to $70.1 million from $198 million, the result of lower prices and a steep reduction in output. The company has idled three of its four wholly-owned production plants.
August 7, 2009
Earlier this week, a Land Park resident gave us the postcard sent out by New Jersey-based builder K. Hovnanaian, offering three different models in the 800-square-foot range at its Four Seasons community at Westshore. Apparently, the builder is trying to coax some Baby Boomers out of their lairs in Land Park and East Sacramento.
I had never heard of a new home that small in Sacramento, so we got in the car and drove out to see it.Sales consultant Dee Elrod gave us a quick tour of the interior - one great room, one regular-sized bedroom and a bath and a half. It was easily, surprisingly livable. If you're thinking of pets, though, better think bird cage or fish tank. The back patio is tiny.
I didn't understand the story exactly, but these tiny units were built to fill an irregular lot. So there are no plans by K. Hovnanian to build a tract of them. This is just a handful of models they are trying to sell.
But it brought up a question: why can't builders add these kind of tiny, affordable houses to the sales mix? My question of readers: Have you seen anything - new - that size or smaller anywhere else in this region? I'd like to know about that.
August 7, 2009
Dallas-based Trammell Crow is the builder, pushing up a 275-unit apartment center to be called The Alexan. It's one of the few apartment complexes being built in the region as the housing bust continues. Plans are to finish this fall. If the housing downturn backs off a little by next year some of these units might also be sold as condos. Home Front, being a Friday tourist in its own town, shot this little piece of video to bring home the sights and sounds.
August 7, 2009
The company that operates Red Hawk Casino says the Shingle Springs casino is still suffering the effects of the down economy nine months after opening.
Lakes Entertainment Inc., in its second quarter earnings report this week, said Red Hawk is getting strong customer traffic but the volume of money spent gambling, particularly on the slot machines, has been disappointing.
Lakes executives said staffing levels are being reduced at Red Hawk, although they wouldn't say by how much. In an interview in May, Lakes Chief Executive Lyle Berman said the number of full-time equivalents had fallen to 1,500 from 1,750 when the casino opened in December.
In an interview today, Lakes Chief Financial Officer Tim Cope said, "We're getting a tremendous amount of guests coming through the doors. It's the 'spend' per customer" that's the problem.
Management fees from Red Hawk did boost the company's second quarter results. The company earned $2.8 million vs. a loss of $5.2 million a year ago.
In the Home Front video below, Petrovich talks up a design feature he's considering at the site involving an old locomotive, the promises a project that will be popular with neighborhoods to the south of downtown Sacramento.
"I'll blow people away with this," he says.
Petrovich was pretty blunt about his expectations of being sued by the Sierra Curtis Neighborhood Association over his plans for a $211 million project. He trotted out all the benefits that developers do when proposing these projects: 1,600 construction jobs, 500 permanent jobs at the site and $2.5 million in annual property taxes on a site that now pays
about $10,000 a year. He also estimate that sales taxes will reach about $900,000 a year for the city's treasury.
He said he wants to do an athletic club at the site, or a bowling alley. And noted that that's upsetting some of the neighbors who are worried about traffic.
"There are people in the neighborhood who are going to sue. I'm convinced of that," he told the Oak Park residents. He also warned again that the project is costing him $4,000 a day and that if sued, he'll go straight to city hall and apply for permits to build indutrial space or possibly a lumber yard surrounded by industrial buildings - all allowed without a city council vote under the site's current zoning.
(Leaders of the Curtis Park neighborhood association have said they don't necessarily plan to sue, but aren't going to be "ramrodded" into accepting a plan they believe is too suburban in character for the historic older neighborhoods that surround it).
One in the audience asked Petrovich why he wasn't doing "mixed use," that is, putting homes above stores. His answer: "I did that at Safeway (R Street in Midtown Sacramento). "I lost my butt on it." He said he couldn't get the rents he expected to make it work.
Petrovich also got challenged pretty hard about the likelihood of adding more traffic to Sutterville Road.
But he wrapped up at the end, saying, "I'm a developer. That doesn't mean I'm evil."
Then he asked people in the audience to email their support or call their local city council member, Lauren Hammond. The whole big project is expected now to go to the Sacramento Planning Commission in September with a city council vote expected weeks later.
August 6, 2009
Friday UPDATE: Here's the actual report. (Thanks to the Center for Responsible Lending). The link below is to the CNN story about it.
An estimated 25 million borrowers will owe more on their mortgages than their homes are worth by 2011, says a new report from Deutsche Bank.
"The twin centers of underwater world are the "sand states" and the rust belt. The worst hit metro areas are Merced and El Centro, Calif., where 85% of mortgage borrowers are underwater.
Other hard hit areas include: Modesto, Calif. (84%), Las Vegas (81%) and Stockton, Calif. (81%). The leading Florida cities are Cape Coral (76%) and Orlando (71%). Mansfield and Cleveland, Ohio, (54%) had the highest rates in the industrial Midwest."
August 6, 2009
The association is looking for lots more applications.
"We thought we'd have five or six times that many," said Jim Liptak, CAR president a few minutes ago in a telephone conversation.
The CAR "mortgage protection" program announced in April contributes up to $1,500 a month for six months to help with payments. It's free and scheduled to run through the end of 2009. So far, those approved haven't had to take advantage of it, said Liptak.
Liptak says first-timers should ask their real estate agents about it. Approval takes two to three weeks.
Similar deals have been rolled out at home builders and car dealers in a state where unemployment has reached 11.6 percent.
August 6, 2009
Sacramentans' earnings were clearly affected by the recession last year, according to figures released today by the U.S. Bureau of Economic Analysis.
Per capita incomes grew by 1.5 percent during the year. That was well below the U.S. average of 2.5 percent. It was also lower than the 2.4 percent inflation rate. Which means Sacramentans lost ground during the year.
A look deeper inside the numbers show that wages went into a serious stagnation in Sacramento. Overall incomes were propped up to a significant degree by so-called government "transfer payments," which include unemployment benefits and so on. Such payments jumped 9 percent in Sacramento last year, pumping an extra $1 billion into the economy.
The numbers, which take into account the entire year, don't really reflect the free-fall that began last fall, when the financial markets collapsed and layoffs began in earnest. "The calamity was in the last quarter of the year," said David Lenze, a BEA economist. "The economy dipped slowly at first and then dropped off after the stock market crashed."
August 6, 2009
We keep reading (and reporting) that the economy is starting to come out of its nosedive. But it's important to remember that there's still a lot of pain ahead, particularly in the state that was at the forefront of the real estate bubble. A new survey from Orange County's Chapman University released today bears this out.
The university's quarterly California Employment Indicator Index shows more layoffs are coming. Its third quarter index clocked in at 72.1, or slightly worse than the second quarter reading of 73.4.
When the index is 100, that means hiring will cancel out layoffs. Anything below 100 points to further job loss.
The folks at Chapman say job growth won't begin until early next year.
Chapman's survey is in line with other economic forecasts. Sacramento State, for instance, says the Sacramento area unemployment rate will rise to 13.5 percent by mid-2010. It's currently 11.6 percent.
August 4, 2009
Tuesday update: Here's a couple more weigh-ins on yesterdaty's topic:
A news release from Wells Fargo that says the bank is "accelerating" its efforts.
And this from the Consumer Federation of America saying "more work needed" on loan modification front.
The big news today is about a Federal Reserve report showing who's actually modifying mortgages for people. The initial look shows JPMorgan Chase leading the pack in the percentage of loans modified, with Bank of America and Wells Fargo modifying low percentages of their loans.
Here's an AP story about the Federal Reserve report.
Here is an CNBC recap of the report this morning from Steve Liesman. That starts at 1:10 in this video and runs to the end. Good dialogue.
August 4, 2009
By now you've likely read out colleague Darrell Smith's report in today's paper about Kohl's opening four stores in the Sacramento area next month.
That will provide a nice boost to the job market. It will also help the troubled real estate market, which might be in even rougher shape than the job market. According to the latest quarterly report from Home Front friend Garrick Brown, of Colliers International real estate, the retail vacancy rate in greater Sacramento reached 12.9 percent at the end of June.
That was up from 11.8 percent at the end of the first quarter.
In his analysis, Brown said Kohl's will help stabilize the market in the third quarter, but it won't be the spark of a genuine turnaround. "With unemployment not expected to peak until early next year, we don't see the outlook for retail real estate improving in anything less than two years," he wrote.
Some of the "sub-markets" are doing horribly. Vacancies are at 19 percent in Lincoln, 19.8 percent along Highway 50 and 18.3 percent in the Arden/Howe/Watt area.