Desperate Times for Sonoma County Sellers

"Cutting prices, paying closing costs and crediting buyers for needed repairs, homeowners have been doing more to get homes sold. But buyers continue seeking good deals, knowing sales are down more than 25 percent from a year ago and many homes languish on the market for several months or more."

"Home sellers desperate to make a deal during the slowest housing market in a decade have embraced St. Joseph as a sacred real estate agent of sorts. Sales of St. Joseph statuettes have soared across the United States as the housing market slows."

"In Santa Rosa, sales of the figurines have doubled this year at Interfaith Books & Gifts, Santa Rosa's largest Christian book and gift store. The store even ran out of them for several weeks this summer. Most popular are eight-inch painted plaster figurines selling for $25 to $40. There is a taller, more elaborate wood-carved figurine selling for $120, although to bury it would require a far deeper hole in the ground. Many who buy statuettes also purchase the book, "St. Joseph, My Real Estate Agent."'

"Burying the St. Joseph figurine from their family's nativity scene was a desperate decision for the Sifuenteses after months of sensible moves to make their home attractive to buyers in a crowded market."

"Her real estate agent, Belinda Andrews, quipped that she once buried a St. Joseph statuette on one of the Santa Rosa housing lots she was trying to sell in the early 1990s, another desperate time for sellers."

"Before listing the home for sale, they put in new kitchen counters, floor tile and carpet and painted the outside.They began cutting the price when no offers came in after two weeks. Starting at $569,000, they reduced it to $559,000, then $539,000 and finally $529,000 over the next three months. But still there was nary a buyer."

p.s. They received a greater fool a few days after they buried their statue. They said they are not digging him up until after the sale closes. I figure if things are this desperate, sellers may as well toss in a statue of St. Jude as well, as he is supposedly the Patron Saint of Lost Causes. ;-)

The following advice was shamelessly stolen from Imploder (poster at Ben's place)

Comment by imploder
2006-12-28 18:10:28

“Home sellers desperate to make a deal during the slowest housing market in
a decade have embraced St. Joseph as a sacred real estate agent of sorts.”

I said it before, now I will say it again…
Sellers, Sellers,
Sellers…

“Don’t put poor Saint in
grass, Pull own head from A$$…”

Sonoma Valley Foreclosures 12/29/06

39 Foreclosures
(streets with foreclosures below)




2nd St
2nd St W # W
322 5th St
4th St
4th St E
5th St W
Anthony Ct
Anthony Ct
Barrett Ave
Boyes Blvd
Boyes Blvd
Brockman Ln
Buena Vista Ave
Center St
Clayton Ave
Comstock Ave
Country Meadow Ln
Emilys Meadow Ct
Fremont Dr
Haraszthy Dr
Johnson Ave
Johnson Ave
Lucas Ave
Mallard Dr
Manzanita Rd
Moll Ct
Mountain Ave
Oakwood Dr
Riverside Dr
Robles Serano Ct
Ross Ct
Solano Ct
Sonoma Hwy
W Spain St
Warm Springs Rd.
Warm Springs Rd.
Warm Springs Rd.
Kenilworth Ave
Trinity Rd.

Sonoma Valley MLS listings: 300

Below are 22 properties on the Ziprealty Price Reduced list that also have foreclosures on the same street. (complete price reduced list has 135+ properties)

Lots of Lipstick on this Pig

Sonoma County Economic Development Board Fall 2006 Report (snippets below)

* Sonoma County’s economy is expanding unevenly.

* Manufacturing still faces a number of closings and consolidations and many service industries are paring workers.

* Financial institutions account for 9.5 percent of the public company employment base in Sonoma County.

* Services account for 35.2 percent of local employment

* Transportation represents 0.3 percent of local market employment.

* Tech companies, at 41.7 percent, are the largest contributor to the Sonoma County employment base.

"Tech-related manufacturers have been on a rollercoaster ride for much of the past two years, but the general trend in hiring is still downward as the industry consolidates. The latest closure was at TriVascular, which laid off 270 workers when it closed its local facilities."

"Economic stability is not strong enough for continued hiring in leisure and hospitality services or in business and professional services, for which payrolls have fallen substantially since the beginning of this year. Neither retailing nor construction provides additional support."

"Construction payrolls already have shrunk back to their level of one year ago following a spike in residential construction in late 2005."

"The housing market reflects the weak pace of economic growth, with a downturn in prices and unsold inventory that has more than doubled over the past year."

"The housing market has cooled considerably. The California Association of Realtors reports prices for single-family homes peaked in January and unsold inventories are their highest since 2003. The turn in the housing market has been as sharp and sudden as it was during the 2001 recession."

"The outlook for Sonoma County remains very moderate with the potential for considerable near-term volatility depending upon the speed and depth of the housing market adjustment."

Some Have Gotten the Memo...

Seems the San Diego housing market has gotten the memo. Sometimes a good ass-kicking realigns people's value systems. ;-)

“San Diego proved an extreme version of what was happening in markets across the country, as inflated markets started to cool. "

“The popularity of creative financing options worries analysts. Some buyers got into homes even though they could only afford the introductory payment on the loan. Those watching the market fear an avalanche of foreclosures from those who can’t afford their loans anymore.”

'“Many in the real estate industry blamed the media for the negative mindset of their formerly enthusiastic clients. Agents, builders and brokers lambasted those reporters, blaming the media for perpetuating a perception of doom for the housing market. But the numbers didn’t lie.”'

'“In these circumstances, convincing buyers to get into the market just for the sake of doing so will be a tough sell, said Peter Dennehy, VP of the Sullivan Group. ‘The market as a whole has gotten the memo,’ Dennehy said."

“‘Before that, it was just experts saying, ‘This is not sustainable,’ he said. ‘Now, the data actually showed a change.’”

"‘It is very hard to convince someone that it’s a good time to buy right now. That ‘let’s just get something,’ ‘gotta get in on the market’ — I think that perception is gone.’”

'"Job losses in the real-estate related sector, including agents, mortgage brokers and construction workers, will have lasting, significant effects on the local economy."'

Houses Don't Sell Themselves Any More

Knives are falling, but the prices suggest only the Greatest Fools are trying to catch them. Good luck with that.

"Backlog of unsold properties in slowing Sonoma County market has sellers trying new lures."

"Incentives to drive home sales have become more common across Sonoma County during the housing slump. Most are aimed at enticing agents to take a closer look for their clients in a market where the supply has doubled over the past year."

Sonoma County: 3002
Price Reduced: 1111

Sonoma Valley: 304
Price Reduced: 150+

'"You pull up a price range and you get more houses than you can look at. You somehow want to do something to get noticed," said Tom Kemper, Creative Property Services manager in Windsor. "Houses don't sell themselves any more."'

"In 2005, buyers were still waging bidding battles and had little leverage to negotiate over repairs or other concessions from sellers.But today, sellers are the parties beckoning for attention."

"An Oakmont homeowner offered $5,000 to any agent who brought in a buyer to purchase the $495,000 house, said the seller's agent, Mike Higgins of Century 21 Valley of the Moon realty. Higgins said he told the homeowner the offer likely wouldn't help."

"The home didn't sell and was pulled off the market."In my opinion, these incentives don't do anything to bring in an offer that wouldn't have come in anyway."

"A new Honda Civic for a $359,000 house - that was an offer posted in red letters on a large yellow banner at a busy Santa Rosa intersection."

'"With the market as it has been, I thought it might be valuable to get a hook," said David Peoples, the Coldwell Banker agent with that listing."

"More than a month later, despite more calls and interest, the lure of a new, $20,000 car still had not yielded an offer to purchase the house."

"Offering agents an all-expenses-paid trip to the Kona Coast in Hawaii - worth $5,000 - was Christopherson's latest effort in a year when Sonoma County's largest builder dropped prices 5 percent and didn't put a new foundation in the ground for seven months."

"Sonoma County home sales turned downward in November, falling 15.1% from October, off 28.8% year-over-year. Year-to-date, home sales are down 27.3%."

After four months of losses, the median price for single-family homes in Sonoma County is $565,000. This is 5.7% lower than last November, and the fifth month in a row year-over-year appreciation has been negative

Average days on the market: 106

Missed the Memo?

Someone clearly missed the housing bust memo...

772 WILLIAM CUNNINGHAM AVE, Sonoma, CA 95476
List Price: $1,674,500
Days on Market: 221

Price Reduced: 08/31/06 -- $1,675,000 to $1,674,900
$100?

Price Reduced: 11/07/06 -- $1,674,900 to $1,674,500
$400?

Total Price Reduction: $500?


According to Norcal MLS

Sonoma County listings: 3002

ZipRealty.com claims: 1111 with prices reduced in the county

Sonoma Valley listings: 304

Ziprealty shows 150 properties in Sonoma Valley on the price reduced list and a message at the top of the search page says there are another 140 that match my criteria. The only criteria I put in was homes for sale in Sonoma Valley with prices reduced.

"The housing slump has been painful for millions of people who work in real estate or recently bought a house. For Patrick Killelea, however, this year has been one long victory lap. Mr. Killelea, a 41-year-old software engineer, has long preached that it makes more economic sense to rent than buy homes."

"He recalls shouting "Wow!" when he heard about September's 9.7% drop in prices of new homes."I didn't want to gloat," he says. "But then again, maybe I did."'

"For years, Americans who refused to buy real estate at what they considered excessive prices were ribbed for failing to profit from one of the greatest booms in history. "Are You Missing the Real Estate Boom?" needled the title of a 2005 book by David Lereah, chief economist of the National Association of Realtors."

"Now, with the housing market in a slump, renters who sat out the boom are finally getting some satisfaction."

"The jobless rate in Sonoma County unexpectedly rose in November as retailers kept a tight grip on hiring while construction companies and manufacturers continued to lay off workers, the state reported Friday."

"Typically, unemployment is near its lowest point in November and usually drops a bit more in December as the holiday shopping season peaks and retailers hire extra staff to stock shelves and assist customers.While local retailers hired 500 people in November, that is 35 percent fewer people than the preceding five-year average, according to the department."

"Friday's data marked the seventh consecutive month that Sonoma County had fewer overall jobs than a year ago, according to the state report. With several sectors slowing down, the county has lost 2,400 jobs over the last year."

"Electronic manufacturers have cut 5.9 percent of their workforce since November 2005, according to the state's data.General merchandise stores cut back on employment by 10.5 percent during the past year. Retailers have shed 400 workers following the closure of the J.C. Penney store in Petaluma and three Yardbirds home centers, one of which was replaced by a Home Depot store."

"Meanwhile, temp agencies have reduced employment by 6.3 percent. Employment agencies are often an early indicator to the economy's future, said Ben Stone, executive director of the Sonoma County Economic Development Board."

"The economy felt the strain of the housing bust and lost momentum in the late summer, with more sluggish performances expected in the months ahead."

"The economy has lost momentum all year long. The crumbling housing market, the toll of the Federal Reserve's two-year credit tightening campaign and once-surging energy prices have affected economic activity. "

"Economic growth slowed to a 2 percent pace in the July-to-September quarter, the Commerce Department reported Thursday."

"Investment in home building declined at a 18.7 percent rate - even more than previously estimated - and was the largest cut in 15 years."

"The message was loud and clear: The deepening housing slump is crimping growth."

SFGATE.com stats

Marin County Total sales as of Dec 4 ~ 68
Median price ~ $850,000

Napa County Total sales as of Nov 30 ~ 24
Median price ~ $599,000

Solano County Total sales as of Dec 4 ~ 140
Median price ~ $450,000

Sonoma County Total sales as of Dec 4 ~ 124
Median price ~ $525,000

Oops Prices Falling Again....

"Sonoma County home prices fell in November for the fifth consecutive month, although there are signs more buyers are testing the market."

"The county's monthly median price began to fall in July as the housing downturn took hold following an eight-year run of record sales and price increases. The succession of monthly price declines is the longest since prices dropped over a six-month period from September 1993 through February 1994."

Does anyone remember the realtor windbag that said prices would not come down? The one who said that even during the last downturn prices only declined about 4%?

"At that time, the county was reeling from a recession. Now, fewer buyers can purchase homes in a region where affordability long has been a problem. While recent price declines and lower interest rates have reduced mortgage payments, many homes remain too costly and buyers are cautious."

"Falling prices and lower interest rates are drawing more buyers into the market. But one barometer shows that more buyers are backing out of sales agreements in search of better deals."

"One measure of buyers' unease is the number of sales they back out of before a deal is closed. In November, 39 percent of the sales that had been pending the end of October were not completed. The fallout rate so far this year is 30 percent, compared with about 25 percent last year."

"Sonoma County homes take more than three months to sell on average, compared with two months a year ago. Given the sluggish pace, the supply of homes for sale is sticking at levels not seen since the last downturn more than a decade ago."

"Several economic forecasts call for home prices to continue falling into early next year. "

Sonoma County Affordability is the Worst

Pressdemocrat.com

Home prices fell more sharply in Sonoma County last month than anywhere else in the Bay Area, except Solano County, according to a report issued Thursday.

Steve Cochrane, an analyst with Moody's Economy.com who tracks Sonoma County's economy, said he wasn't surprised by Sonoma County's drop.

"I've always felt the Sonoma County housing market was at fairly considerable risk," he said.

YAWN!!!!

"It seems like Sonoma County is one of the weakest economies in the Bay Area. There's hardly any job growth to speak of. That's essentially the basic building block of the economy," Cochrane said.

YAWN! we've been reporting on the state of the economy for the past 8 months. This should not come as a surprise to anyone. Plus who cares about the reporting on this... if you live here you KNOW this because you live it every day.

A weak economy, combined with home prices that remain out of reach for many residents, continues to dampen buyer demand in the county, Cochrane said.

The county has lost 3,100 jobs over the past year, putting the brakes on what had been a sluggish economic recovery from a recession that was longer and deeper than expected.

Sonoma, Solano and Contra Costa counties, which are the farthest from the core of Bay Area jobs and have the region's least-expensive homes, suffered the largest rate of decline in November, according to Data-Quick Information Systems, a real estate research firm.

In Sonoma County, prices have dropped 7.7 percent to a median of $530,000, while sales have declined 22.5 percent, according to DataQuick.

An expanding labor market is critical to housing's health because that draws workers and can boost incomes.

Another disadvantage for Sonoma County is being on the edge of the Bay Area and far from major job centers. That limits the number of commuters willing to move here and first-time homebuyers drawn to where jobs are forming, Cochrane said.

"Income growth has been sluggish as well, so we haven't really seen enough of an improvement along with lower housing prices," he said. "The affordability of housing in Sonoma County is probably the worst in the Bay Area."

Even if prices level off next year, the county's housing market could remain weak through the middle of 2008, according to the latest forecast by Economy.com. The correction in home prices will be deeper in Sonoma County compared with the Bay Area as a whole, Cochrane predicted.

"It may be until the middle of next year until things settle down," he said.