Builders Still Dreaming...
Sonoma County reported 1,895 new homes were built in the first 11 months of 2006, down 30 percent from the same period in 2005.
"Because there's excess inventory, there are still significant concessions," he said. "We expect that will drop considerably later in the year. In other words, now is a great time to buy," said Alan Nevin, an economist for the home builder's trade group."
"Prices will remain soft or stable throughout most of California. The state's strong economy, job growth and low interest rates will keep demand steady, he said."
Sonoma County MLS: 2777
Sonoma County Price Reduced: 1004
Looks to me like it is raining knives and a whole lot of FBs are following the market down. Kind of like Sonoma County's version of Mr. Toad's Wild Ride for bagholders. NOT a great time to buy, though Mr. Nevin, who is a paid shill for the industry would have you believe otherwise.
In the words of Graspeer, a poster at Ben's Place:
"When has the Real Estate industry ever said it was not the best time to buy
a house? Prices go up, buy a house, prices go down buy a house, if you already
have a house buy a second house. Spring is the best time to buy a house, unless
its Summer, or Winter or Fall and then is the time to buy a house. Good credit,
Bad Credit, No Credit, its always a good time to buy a house. If you are young
its time to buy a house, if you are old its time to buy a house, if you are
middle aged its time to buy two houses. If you have a job its time to buy a
house, if you don’t have a job its time to buy a house..."
Mr. Nevin might want to look at the reality of Sonoma County's job growth and economy. Here is a dose of reality.
"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," Steve Cochrane, an analyst with Moody's Economy.com said."
"Home prices fell more sharply in Sonoma County last month than anywhere else in the Bay Area, except Solano County."
"Steve Cochrane, 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."
* Employment peaked in Sonoma County in 2001 at the end of the tech boom when the county had 196,700 payroll jobs.
* By 2003, the economic downturn had wiped out 7,600 of those jobs.
* Through 2005, only 2,400 had returned.
*By October 2006 The county has lost 3,100 jobs
Here is a little bit more this time from Christopher Thornberg.
"This year is predicted to be a bad one for those either looking to buy or sell a home in California. Construction, sales and prices will keep plunging, according to Chris Thornberg of Beacon Economics."
'"I am extremely negative about 2007," Thornberg said. "I see foreclosures going up in 2007. I think prices are definitely not going to bottom out. I think prices will continue to go down slowly."
'"In fact, Thornberg sees the entire California economy for 2007 in a negative light. When asked why, he said "the state is in a completely unsustainable situation."
'“Consumers cannot continue to spend more than they earn," he said."Thornberg said those in the most trouble are newer home owners whose mortgages will re-set this year. The higher interest rates will mean larger monthly payments for many borrowers."
'"There are a lot of people out there who are in trouble, who were promised that real estate could be a no-lose investment."'
By 2005 it was estimated only 7% of Sonoma County residents could afford a median priced home. Job growth and a strong economy were not behind the Sonoma Housing Bubble.
It was pure greed inspired speculation, and people believing they were rich with home equity they could tap and spend forever and ever, because real estate only goes up. Debt = Wealth.
The only thing behind ridiculous pricing and frenzied buying and selling was a mass of fools with an overinflated sense of entitlement. The mantra by mortgage holders and their sycophantic real estate agents and mortgage lenders was that they were special. Sonoma is special. We are the new Sausalito. Everyone wants to live here.
Hmmm... notice that jobs were being wiped out while the housing bubble cauldron boiled... and risky mortgages became all the rage.
Percentage of Sonoma County home buyers choosing exotic financing
(Interest Only, ARMs, Negative Amortizing Loans)
Let's review: YOY datapoints from Rereport.com
Sales -23.2% yoy
Median was up 14.8%
January was also the fourth month in a row that sales were off by double digits year-over-year. The total sales for January 2006 was the lowest number since 1998.
Sales -16.3% yoy
Median price up 0.9%
Sales -14.5% yoy
Condos were down -34.8% year-over-year.
Median price was up 0.8%
Sales -24.6% yoy
Condo sales fell -32.1% year-over-year.
Median price was up 0.9% and was reportedly the third month in a row yoy appreciation was less than 1%.
Sales -29.4% yoy
condo sales down -42.1% yoy.
The median price was up 1.8% yoy.
Sales -38.1% yoy
Median was up 1.6% year-over-year and was reported to be the fourth month in a row annual appreciation has been less than 2%.
Sales -40% yoy
Median was down 2.9% year-over-year
Sales -22.7% yoy
The median price was 7% lower year-over-year.
Sales -40.1% yoy
Median price -7.3% yoy
Median price fell for the third month in a row.
Except they way Reprert.com worded it was: "it was the third month in a row year-over-year appreciation has been negative."
I have a fundamental problem with this... to say appreciation has been negative implies that yoy appreciation exists in some solid form though just inverted. Appreciation means increase of value.
If prices are falling, you have depreciation. Loss of value. Therefore appreciation does not exist. As in, did you hear that FBs? Appreciation isn't an entitlement. It isn't a solid assumption you can count on like some sort of gumby number on a graph.
(by the way, aren't May, June, July, August, September supposed to be PRIME time for buying and selling real estate? oops... no bubble here.)
Sales October's report is nowhere to be found on the site. The reports go from September's numbers to November numbers. What does THAT suggest? Possibly too much carnage in October to report?
Median -5.7% yoy
Sonoma County home sales dropped about -27 percent YOY
median prices falling almost -8 percent.