Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Wednesday, August 22, 2007

Brother, Can You Spare A Housing Job?

House prices weren't the only things on the uptick over the last few years, the number of people that moved into housing related jobs also soared. For the last few years it seemed that the answers to the massive job loss following the dot com bubble and the attacks of 9/11 were to be found in the housing industry. Just as in past periods of irrational exhuberance, when the most unlikely people were found peddling stocks, trading bonds, and getting money for start-ups, the housing bubble brought it's own share of get rich quick stories. The overnight RE gazillionaire, the woman who made a bundle flipping houses, the kid from Quiznos' who started writing mortgages, or doing appraisals...or I could go on.

Well, the gravy train has finally de-railed and many of those who found themselves eager participants in the pile on are now piling on to the unemployment line.

Since the start of the year, more than 40,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by global outplacement firm Challenger, Gray & Christmas Inc. Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.

It's an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when some 100,000 employees lost their jobs.

"It's far from over," said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. "The subprime lending collapse will continue to ripple through the financial sector."

This job loss train wreck is not slow motion by anymeans. These mortgage lending companies are folding their tents faster than a snake-oil salesman with a tar and feather toting mob on his tail.

"These kind of mortgage lenders just sprung up like mushrooms and grew like men," said John A. Challenger, chief executive at Challenger, Gray & Christmas. "They staffed up and now you have a bust."

America's largest mortgage lender, Countrywide Financial Corp., began an undisclosed number of layoffs this week. Last week, Arizona mortgage lender First Magnus Financial Corp. shut down its operations and laid off nearly 6,000 workers. On Monday, Capital One Financial Corp. said it would shutter Greenpoint Mortgage, its wholesale mortgage banking business, and lay off 1,900 employees.

"It's only been weeks," Challenger said. "These companies are acting remarkably quickly, stopping on a dime."

It's called leaving town one step aheade of the sheriff, with a smidge of the evacuation from our embassy in Saigon thrown in for good measure.

"It was pretty much a free for all in the office, people taking paper, stuff HomeBanc wouldn't need," he said. "I don't feel like HomeBanc did anything. It was a perfect storm of a bad housing market."

Two of Clark's friends have already landed jobs with Countrywide. Another found work with an affiliate of First Magnus, and was almost immediately laid off again. Roach plans to open his own lending business, focusing on commercial business loans and originating home loans himself.

That's sort of like transfering by dinghy from the Titanic to the Andrea Doria.

And, it's not just the mortgage lenders who may be seeing some job losses. This news story today reveals that four top banks hit up Uncle Sam for some WAM this afternoon, to the tune of 500 million each. seems they had a few bucks in Countrywide themselves. In fact they funneled about 2 Billion bucks into Countrywide jjust today. So lemme see, they're borrowing money from the Fed to put into Countrywide????!!!

In a joint statement, the latter three banks said they decided to borrow the money to demonstrate "the potential value of the Fed's primary credit facility" and encourage its use by other banks.

"Simultaneous action by these four institutions -- at the same time, on the same day, for the same amount of money -- suggests that the move is intended to have some symbolic value," said Aaron Gurwitz, co-head of portfolio strategy at Lehman Brothers Investment Management Division. "But it may also be a way for them to make money."

Yeah. That too.


At 8/22/2007 09:07:00 PM , Blogger Tyrone said...

Zillow Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 22: 1648

At 8/23/2007 11:20:00 AM , Blogger moonvalley said...

fascinating! I went over to Zillow and looked at the Santa rosa houses. Interestingly enough one caught my eye at 917 Stewart. It's for sale at 849k meanhile the Zillow valuation is 525k. Now I know that sometimes Zillow doesn't truly match prices but still, that hopeful home seller needs a wake-up call.

At 8/23/2007 11:30:00 AM , Blogger moonvalley said...

and here's on e actually valued at about 300k more than the sellers asking.

3942 Shelter Glen Way. The place has changed hands three times in the last 7 years.

At 8/23/2007 02:18:00 PM , Blogger marin_explorer said...

1648 listings in SR? Wow...I seem to recall a much smaller number...did things hit the proverbial fan?

At 8/23/2007 02:29:00 PM , Blogger marin_explorer said..., after doing my usual search using ziprealty's useful interactive map, I see things sure have changed...the density of homes now resembles other big bust areas. It looks like carnage for the flipper crowd...lmao!

At 8/23/2007 04:41:00 PM , Blogger moonvalley said...

yes, is that blood or red ink?

At 8/23/2007 08:08:00 PM , Blogger Tyrone said...

Zillow Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 22: 1648
Aug 23: 1653

I got 2 e-mails from ZipRealty for a total of 17 new listings in Santa Rosa, but the total only went up 5. Maybe the e-mail notices lag the total.

We're averaging 3.78 new listings per day!!!!

House 'o the day:
3459 Baldwin Way
New in 2002: $650K
List Price: $1,089,000

Keep dreamin', big daddy!

4973 Hoen Ave is also good:
Sale History
11/30/2006: $639,000
List Price: $689,500

At 8/24/2007 07:27:00 PM , Blogger Tyrone said...

This comment has been removed by the author.

At 8/24/2007 07:35:00 PM , Blogger Tyrone said...

Zillow Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 22: 1648
Aug 23: 1653
Aug 24: 1655 (+2, disappointing)

216 Hampton Ct
List Price: $519,900 Ouch!!!

Sale History
04/28/2006: $140,818 (??)
12/07/2005: $652,500

At 8/25/2007 07:57:00 PM , Blogger Tyrone said...

This comment has been removed by the author.

At 8/25/2007 08:09:00 PM , Blogger Tyrone said...

Flipping Fraud -or- Stupidity,...

you choose.

465 Oak Brook Ct
Current List Price: $769,000

Sale History
11/05/2004: $649,000
06/30/2004: $472,000

$175K increase (37%) in 4 months. Bubble? What bubble? MWAHAHAHA

At 8/25/2007 09:57:00 PM , Anonymous Anonymous said...

The job losses reported are for salaried positions of "employees" licensed Real Estate salespeople,and the vast majority of loan brokers are legally self employed independent contractors.I worked for a Loan Brokerage in Santa Rosa,there were 6 salaried Employees,and 25 "independent contractors" who lived or died on commission.they are still considered to be self employed...

At 8/26/2007 03:18:00 PM , Blogger Tyrone said...

Zillow Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 22: 1648
Aug 23: 1653
Aug 24: 1655
Aug 26: 1659

~3.5 homes added per day. How many are being sold? Anybody?

House o' the day:
70 Noonan Ranch Cir
List Price: $675,000

Sale History
06/09/2006: $700,000 <--Sickening
07/12/1996: $257,500

At 8/27/2007 07:06:00 PM , Blogger Tyrone said...

Zillow Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 24: 1655
Aug 26: 1659
Aug 27: 1670 Nice jump, today!

House o' the day:
2075 Manzanita Ave
List Price: $675,000 WTF!!!
2 bed, 1 bath,
944 sq ft -> $715/sqft

Sale History
06/10/2003: $113,000
03/21/2002: $111,500
12/17/1998: $53,500

Very strange listing in terms of price history.

At 8/27/2007 11:06:00 PM , Blogger moonvalley said...

Tyrone, perhaps some of those weirdass sales had to do with possible past foreclosures???

At 8/27/2007 11:19:00 PM , Blogger Tyrone said...

Here is a reduced price property.

List Price: $489,900
Sale History
08/26/2005: $675,000

They still need to knock another $100K off the price, then we're getting closer to normal/realistic.

At 8/28/2007 01:26:00 PM , Anonymous Anonymous said...

2022 Lone Star Ct is bank owned, hence the somewhat realistic price and huge reduction (27%) from it's bubble sales price.

At 8/31/2007 07:08:00 PM , Anonymous tom stone said...

I am seeing a big jump in for sale signs here in sebastopol since august first,and prudential just closed its high profile office on highway 12.Prices are all over the map,with a 2 acre lot near where i live for sale at $ view,nothing special.A neighbor and friend who is a contractor has been eying that lot for years and told me he could make a dollar on it at $175k before he recent rate rise killed the market.still a few high end sales,but the recent changes in underwriting and rates are going to kill the market.MV do ask Athena if I should use the 660 e macarthur docs to start fires,i'm wood heated,and waste not,want not.

At 8/31/2007 10:53:00 PM , Blogger Tyrone said...

ZipRealty Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 24: 1655
Aug 26: 1659
Aug 27: 1670
Aug 31: 1642

Looks like we'll close out August with a down-turn in Zip listings. Expired listings, perhaps??

At 9/01/2007 08:42:00 PM , Blogger Tyrone said...

ZipRealty Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 26: 1659
Aug 31: 1642
Sep 01: 1624

165 Sherwood Dr
List Price: $549,900
Sale History
02/13/2007: $459,000

The assessor says the owner is Trione Corporation. Little chance it'll go for that price. Fair value is probably no more than $300K.

At 9/01/2007 10:47:00 PM , Blogger Tyrone said...

My favorite Realtor, Chris Nunez, might sell a home:
2337 Brompton Ave
Santa Rosa, CA, 95403
Bd: 4 Ba: 3 1870 sqft.
MLS#: 20714926 Status: PS
Price: $449,000
Sale History
11/07/2003: $212,000

This one is proving more difficult:
559 Ironwood Ct
List Price: $320K
Sale History
11/26/2003: $362,000

Reduced: 06/18/07 - $405K to $390K
Reduced: 07/13/07 - $390K to $360K
Reduced: 07/17/07 - $360K to $350K
Reduced: 08/21/07 - $350K to $320K
Very interesting disparity between these two properties. I wouldn't put funny business past the sale of the 1st property.

At 9/04/2007 01:50:00 PM , Anonymous Anonymous said...

Check out today's foreclosures - 29 of them!
Must be record.

At 9/04/2007 08:34:00 PM , Blogger Tyrone said...

Talk about buying at the peak...

2808 Hidden Valley Dr
List Price: $619,000
Sale History
06/15/2006: $680,000

I place fair value at $325K.

At 9/05/2007 06:36:00 PM , Anonymous Anonymous said...

619k? hahhahhah. Sorry, try again.

A larger bank owned house down the street just sold for $510k (2135 Hidden Valley). Oh yeah, that's before jumbo loans dried up.

Now there's 1807 Terrace, also right down the street; same size, currently listed by bank for $480k.

At 9/05/2007 09:28:00 PM , Blogger Tyrone said...

So many Santa Rosa homes, so much stupidity.

List Price: $979,000
Sale History
09/22/2003: $650,000

Tyrone Price: $500K

At 9/07/2007 01:26:00 AM , Anonymous Anonymous said...


Sorry to yell.

I'm on your side.
We need more great stuff from you.

Keep this thing going so I can buy a house someday.


At 9/07/2007 07:04:00 PM , Blogger Tyrone said...

This comment has been removed by the author.

At 9/07/2007 07:06:00 PM , Blogger Tyrone said...


Looks like somebody hit the "ATM" and walked.

4374 Sebastopol Rd
List Price: $342,900
Now owned by BANK OF NEW YORK
Sale History
04/18/2007: $353,250
07/19/2000: $60,000

The BANK OF NEW YORK owns 19 homes in Santa Rosa!!!! Santa Rosa, you are F'd!!!!

At 9/09/2007 07:07:00 PM , Anonymous Anonymous said...

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At 9/10/2007 11:44:00 AM , Blogger moonvalley said...

can't see the house you mentioned! how do I get to it?

At 9/10/2007 01:39:00 PM , Blogger marin_explorer said...

That is one sad looking home! looks like $342K worth of pain! Let the New Yorkers have fun with that one!

Btw, does anyone recall that small, dumpy Eichler near the square in Sonoma that was listing for around $1M? I'll have to dig that one up for laughs.

At 9/10/2007 02:16:00 PM , Blogger marin_explorer said...

Ok, this isn't that dumpy Eichler I saw, but it seems to typify a segment of Sonoma's listings:

2 BR/1BA, 1000sqft = $968K?

Wow. This isn't an isolated case. Who are these people--severely deluded flippers, or retirees hoping to "cash in"?

At 9/10/2007 02:24:00 PM , Blogger marin_explorer said...

And here's that '51 Eichler, another eastside wonder:

2BR/2BA 999 sqft = $1.1M

When I noticed this a year ago, it was priced the same.

At 9/10/2007 08:19:00 PM , Blogger Tyrone said...

Totally unreal. 2bed/1bath/~$1M!!!

I like how they staged it. As if that will draw the buyers in. Before 2000, Zillow has the home valued <$200K.
Sale History
05/04/2006: $725,000

Dream on, fools.

At 9/10/2007 08:24:00 PM , Blogger Tyrone said...

ZipRealty Santa Rosa homes:
Aug 09: 1600
Aug 21: 1643
Aug 24: 1655
Aug 26: 1659
Aug 27: 1670
Aug 31: 1642
Sep 01: 1624
Sep 10: 1679 New HIGH!!!!


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