Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Saturday, February 02, 2008

All Downhill From Here, Baby!

I like the way Ben Jones characterizes the progression of this crash. It looks the same everywhere, no matter all the fools who delude themselves with: "It won't happen here." It will happen here. It is happening here. Every location that sowed the wind of the real estate bubble, will reap the whirlwind.


It looks like this...

First, the multiple bids end.
Second, sales slow and inventory builds.
Third, builders offer incentives.
Fourth, the resale market also start offering incentives, burying St. Joseph and probably praying to St. Jude, or bargaining with their gods to get them out of this mess and they will never fool with real estate again.
Price cuts and more price cuts.
Rinse and repeat.
Prices eventually stall when seller wishing prices drop to what they owe, and no fool has rushed in to bail them out.
Foreclosures spike.

All downhill from there, baby.

Sonoma Valley Pre-foreclosures

(click pictures to enlarge)























Sonoma Valley Foreclosures on the Auction Block
























Sonoma Valley Bankowned Properties

47 Comments:

At 2/02/2008 10:00:00 PM , Anonymous Tom Stone said...

welcome back.

 
At 2/05/2008 12:33:00 AM , Anonymous Anonymous said...

my favorites are when sellers acknowledge that their neighborhood is going down in value, but say that their particular house hasn't lost any value

 
At 2/05/2008 08:41:00 PM , Blogger Tyrone said...

Yes, welcome back. And here's a welcome back gift for all...

Sonoma Assessor reports:
451 Notices of Default for Jan '08
073 Notices of Default for Feb '08

(5 days)

Might be some duplicates in there, buy holy cow!

 
At 2/05/2008 10:27:00 PM , Blogger john said...

would you like a guest blog contribution?

 
At 2/06/2008 09:32:00 AM , Anonymous Anonymous said...

Sonoma county is in for a rude awakening. I'm wondering if KB homes is actually going to build that new tract in Petaluma above the freeway. I read a recent article that they were auctioning off the rights to name parks in the area. I checked their websit and prices are said to be 750,000 and up. Hahahahahah are they fricken nuts?????
I sold a house in petaluma in 05 for 550,000 zillowed it today its at 418,000 with three short sales on the same street. Now I'm renting in San Rafael for 2000 a month and just waiting......
Sonoma county is screwed!
Lets look into this KB deal, I can't believe that they're going to build it.

 
At 2/06/2008 10:26:00 AM , Blogger Athena said...

sure John. Please email me. sonomahousingbubble@yahoo.com

 
At 2/07/2008 08:15:00 PM , Anonymous Tom Stone said...

ANON 9:32,KB has done no work on their petaluma development since august last year,and money is just getting tighter,and prices have declined at an average of 1.5% per month since the peak ,officially.Although KB has large sunk costs in land,,approvals and the improvements to date I do not think it pencils out,and I expect a speculator will pick it up at about 40 cents on the dollar,and put smaller homes in at some point.KB paid too much for the land.

 
At 2/07/2008 10:44:00 PM , Blogger Tyrone said...

2 days later, Sonoma NODs up 51 in February:


451 Notices of Default for Jan '08
124 Notices of Default for Feb 1-7 '08

.

 
At 2/10/2008 10:35:00 PM , Anonymous Anonymous said...

Now we are seeing 40% reductions in SR!

532 Alderbrook; 3/2 - 1400 sqft., nice neighborhood. Sold for $675 in 2005; recently foreclosed and on the market for $415.

50% across the board is in the bag, probably will be worse.

 
At 2/11/2008 06:12:00 PM , Anonymous Tom Stone said...

I recently spoke to a appraiser who told me banks are beginning to dump REO's in the SR area.Dump is probably too strong a word,but I was told offers $100k below the most recent sale were being taken in good parts of town.I also saw my first cash-in refi last week.originally 20% down in 2005,had to bring $35k to the table.

 
At 2/20/2008 01:50:00 AM , Blogger Hummer14 said...

I'm happy to see a new post. Heres the Bay area press release from Dataquick 2-14-08. Maybe you've read it, maybe not. But here it is.
http://www.dqnews.com/RRBay0208.shtm

Sonoma county median is down 16.7%y/y

 
At 2/21/2008 12:35:00 PM , Anonymous Anonymous said...

And the Sonoma County median is down 25% from the late 2005 peak. Buy now while prices are artifically low!!! hahhahhah.

 
At 2/21/2008 07:32:00 PM , Blogger Tyrone said...

Sonoma Stats for '08...

451 Notices of Default for Jan '08
348 Notices of Default for Feb 1-21 '08

'08 Total: 799

'08 REOs: 316

 
At 2/25/2008 02:39:00 PM , Anonymous Anonymous said...

foreclosure.com lists 40 sheriff sales in SR in the next two weeks. DQ says 86 sales in SR in January. So foreclosures are up to 50% of normal sales.

 
At 2/27/2008 07:21:00 PM , Blogger moonvalley said...

howdy, athena.
glad one of us is back. the doofus building the spec house up the road from us at a cost so far of 1.5 mil + just discovered the gas line stops about 200 yards short of their property. dontcha just hate when that happens?? back to the drawing board. i heard they're going solar for another 40 or 50k or so. hey, it's only money!

 
At 2/29/2008 07:33:00 PM , Blogger Tyrone said...

Sonoma County By the Numbers...

451 Notices of Default for Jan '08
513 Notices of Default for Feb '08

164 Foreclosures for Jan '08
238 Foreclosures for Feb '08

Totals:
'08 NODs: 964
'08 REOs: 402

 
At 2/29/2008 10:31:00 PM , Anonymous Anonymous said...

Starting to see 2002-2004 asking prices in SR; e.g.:

4/3 - 2200 sqft in JC - current list $450k; bought for $420k in 2002; exact comp bought for $720 in 2006

2/2 - 1500 sqft in McDonald District; current list $595k; bought for $550k in 2004

 
At 3/01/2008 11:20:00 PM , OpenID witzwurst said...

welcome back. tons of good info in here.

looking forward to buying when things hit bottom, but i have a feeling it'll be a while.

 
At 4/01/2008 07:06:00 PM , Blogger Tyrone said...

Lets keep the stats rolling...


451 Notices of Default for Jan '08
513 Notices of Default for Feb '08
498 Notices of Default for Mar '08

164 Foreclosures for Jan '08
238 Foreclosures for Feb '08
221 Foreclosures for Mar '08

Totals:
'08 NODs: 1,462
'08 REOs: 623

That's a lot of trouble right now, and a lot more to come.

 
At 4/02/2008 11:37:00 AM , Blogger marin_explorer said...

I dropped by Sonoma over the weekend, and "the vibe" wasn't quite as upbeat as last year. I overheard some downcast talk about real estate, and wondered whether that's still the local fixation? I saw fewer smug types infesting the square on a Sat afternoon, but I was sad to see my favorite cheese shop is gone, replaced by yet another execrable "wine bar". Sigh.

 
At 5/01/2008 02:26:00 PM , Blogger Tyrone said...

I see no signs of NODs or foreclosures slowing. Do you?

451 Notices of Default for Jan '08
513 Notices of Default for Feb '08
498 Notices of Default for Mar '08
509 Notices of Default for Apr '08

164 Foreclosures for Jan '08
238 Foreclosures for Feb '08
221 Foreclosures for Mar '08
236 Foreclosures for Apr '08

Totals:

'08 NODs: 1,971
'08 REOs: 859

 
At 5/23/2008 10:55:00 AM , Anonymous Aaron said...

I wish you would updat this blog more. Sonoma County is toast. That KB project was canceled long ago and now even their coming soon sign is gone. My old house in petaluma sold in August of 05 (yeah thats right I'm a lucky sob) for 550,000 zillows for less than I bought it for in 02 at 367,000 and I bet they coulden't get that. Oh yeah the new owners pulled money out and owe 600 grand. I'm sure that there's many many more in the same situation.
Its all going down hill no sign of slowing on the horizon.
Please update this blog more I really enjoy reading it, you do a great job, and man I'm sure you've heard it before but way to have the insight to predict the obvious.
Sometimes I listento the real estate show on ksro on the weekends and what an idiot the host is. He was predicting the bottom in 06. What a total sham the real estate industry has been over the last decade. I'm so glad that people are starting to see what idiots many in the real estate industry are.

 
At 5/24/2008 04:41:00 PM , Anonymous Anonymous said...

Yeah, how come there's no activity here?

Total bloodbath occurring in SR; a recent repo in Montgomery Village is listed at 52% of its 2006 sales price. $510k -> $265k in less than 24 months (and no sale yet).

And this ain't in a ghetto area.

 
At 5/25/2008 05:40:00 PM , Blogger Lisa said...

I'm watching the west side of Petaluma for my next house, and it seems nothing is selling. Wishing prices are still insane, but at least the knife catchers seem to be few & far between.

Does anyone on this board know anything about the little houses at McNear Landing? Small & close together, but for an inexpensive purchase that would probably pencil out as a rental (if I chose to move elsewhere), what do folks think of that development?

 
At 5/30/2008 09:52:00 PM , Blogger Tyrone said...

.
.

451 Notices of Default for Jan '08
513 Notices of Default for Feb '08
498 Notices of Default for Mar '08
509 Notices of Default for Apr '08
505 Notices of Default for May '08

164 Foreclosures for Jan '08
238 Foreclosures for Feb '08
221 Foreclosures for Mar '08
236 Foreclosures for Apr '08
280 Foreclosures for May '08

Totals:

'08 NODs: 2,476
'08 REOs: 1,139

 
At 6/01/2008 04:25:00 PM , Blogger marin_explorer said...

"Does anyone on this board know anything about the little houses at McNear Landing?"

A few years back, I considered renting a home in that development. Eyeing that neighborhood, my "gut feeling" was the place had a high incidence of rentals stuffed with too many people--and probably not a peaceful setting.

I really like the low-key tone to Petaluma, but many West Side sellers ask far too much for those humble homes. And, if my last listing tour was any indication, many homes there have "additions" that were hastily constructed and likely non-code. Those constructions on McNear are worse: slab floors supporting multiple levels which are likely future maintenance nightmares--imo. I see similar developments in Marin that are falling apart post-haste.

 
At 6/01/2008 09:16:00 PM , Blogger Lisa said...

Marin Explorer:

Thank you so much for the feedback on McNear Landing, it's hugely appreciated! One of the local papers did a story on it a while ago...calling it a nice "village" neighborhood but also saying that roughly half the units were rented out, so you're absolutely right about the "rental vibe."

I'll probably focus on one of the older Westside neighborhoods near downtown. Prices are stubborn, but I also see very little that's actually selling. And I would be looking at small, 2 bedroom houses, so hopefully sometime in late 2009, prices will be down enough to make some sense. We still have the option ARMS and AltA loans to go this year....

Thanks again!

 
At 6/03/2008 07:56:00 AM , Blogger g66t said...

web hosting resources:

http://webhostingserving.com

 
At 6/11/2008 12:14:00 PM , Blogger marin_explorer said...

Here are the foreclosure stats as of today for Sonoma county, source Foreclosure.com. If memory serves me correctly, this is a big jump over last month.

Preforeclosures: 1,808
Sheriff Sales: 78
Foreclosures: 1,031
Bankruptcies: 587
FSBOs: 24
Tax Liens: 3,093

 
At 6/12/2008 08:25:00 PM , Anonymous Anonymous said...

I actually saw an income/commercial property in west county I would buy at the asking price,if it were within my means.I moved here in 2004 and this is the first time I have seen any commercial property I would be willing to touch.I would offer a bit less of course,but it pencils out and the location is excellent.

 
At 7/03/2008 10:17:00 AM , Anonymous Anonymous said...

It looks as if some of the "wishing prices" are less extereme than a year ago, or even three or four months ago. That said, there doesn't seem to be the kind of economy to support the current prices. I'm seeing the occasional SFH in the 200's, but most of the homes are still asking "God's country" prices. I don't expect to see prices get "cheap' anytime soon, but why am I thinking that most of these "wishing prices" don't indicate wishful thinking so much as delusionality?

 
At 7/03/2008 10:27:00 AM , Anonymous Anonymous said...

This is anonymous 10:17 again. Let me ask my question a little differently. How bad will price declines in the interior and East Bay cities (to say nothing of job losses and inflation everywhere)get before most homedebtors in Sonoma "get religion"? Or is it different there? It may be a stupid question to some of you, but gathering from the non-avtivity here, I have to wonder if that's because very little is changing, or if so much is changing that everyone is house-hunting instead of blogging? Just wondering.

 
At 7/04/2008 02:58:00 PM , Blogger Tyrone said...

Anon @ 7/03/2008 10:27:00 AM,

There may be little activity here, but things are far from over. Houses are still way overpriced. They need to get back in line with incomes. Plus there is recession taking hold. Plus inflation is running rampant. Go read Housing Panic and Calculated Risk.

Sonoma is in serious trouble. I'll post the June totals for NODs and Trustees Deeds. The numbers ARE NOT coming down.

But do your due diligence, and catch a falling knife at your own risk.

 
At 7/04/2008 04:23:00 PM , Blogger tom12008 said...

Tyrone,
it's defintely a matter of when people will start do drop prices, not whether Sonoma is that much different. It doesn't seem that Sonoma had the infrastructure to weather hard times when home values were ionospheric, and that things are bound to get more dire as time goes by and property tax revenue goes down.

 
At 7/04/2008 10:39:00 PM , Blogger Tyrone said...

County totals:
.
.

451 NODs for Jan '08
513 NODs for Feb '08
498 NODs for Mar '08
509 NODs for Apr '08
505 NODs for May '08
492 NODs for Jun '08

164 Trustees Deed for Jan '08
238 Trustees Deed for Feb '08
221 Trustees Deed for Mar '08
236 Trustees Deed for Apr '08
280 Trustees Deed for May '08
324 Trustees Deed for Jun '08

Totals:

'08 NODs: 2,968
'08 REOs: 1,463

 
At 7/05/2008 07:56:00 AM , Anonymous Anonymous said...

Tyrone,
thanks for making these so user-friendly. Even if REIC can put a happy spin on this (you know they will try their hardest), they are probably still placing most of their hopes on a taxpayer-funded bailout of some kind or other.
Tom

P.S. I did this "anonymously" due to password trouble with Google/Blogger. I'll get this figured out.

 
At 7/05/2008 08:13:00 AM , Blogger tom12008 said...

I found the county's website to be very helpful in getting an additional sense of the larger picture.
Jobs are an example. Salaries for county jobs are good by national standards, and there are jobs available. However, it must be hard to attract specialized talent when the admitteldly above-average salaries buy so little.
If someone has psoted this already, accept my apologies.

Tom




http://www.sonoma-county.org

 
At 7/06/2008 09:04:00 AM , Blogger Spartakus said...

According to a blog comment by a realtor on trulia.com, there were 400 real estate sales in Sonoma County in May. 60% were on distressed properties (short sales, foreclosures, etc).

My wife grew up in Sebastopol and really wants to move back to her ancestral stomping ground. (We're living in the East Bay Area at the moment.) It doesn't have to be Sebastapol - we're looking at Petaluma, Cotati and Rohnert Park as well.

Nearly all the houses within our budget are short sales or REOs. And most of these are in crappy condition.

This is distressing to me personally and I can't imagine the pain that Sonoma County property owners are feeling.

Thanks for letting me vent. What's it take to get some update action on this fine blog?

 
At 7/06/2008 12:55:00 PM , Anonymous Anonymous said...

A window into what is to come is the Sonoma County Assessor's office. I'll bet that Janice Atkinson's office is very busy these days, and will get busier as the year wears on.

Tom

 
At 7/06/2008 01:19:00 PM , Blogger tom12008 said...

Propsition 8 reassessment requests stipulate that the 3 comparison properties should have sold as close to January as possible, but not later than March 31 of 2008. The appeal period is for nearly five months, from July 2to November 30. All of this information is on the request form, available through the Assessor's website.
There will thus be limits to whatever tax relief homeowners or homedebtors will be able to obtain in the event that the Assessor's office grants their requests. In other words, a reassessment can do only so much to keep a distressed family "above water". Expect things to get very ugly.


P.S. Thanks to Tyrone at Housing Bubble Hall of Shame for the links to the Assessor's website. I've taken my own research from there, but I want to give credit where it is due.

 
At 7/17/2008 06:34:00 AM , Anonymous Anonymous said...

I missed this June 21 article from the Sonoma Press Democrat. Their source does his best to put an optimistic spin on things; he's predicting only a 16% decline.


http://www.pressdemocrat.com/article/20080621/news/806210343

 
At 7/17/2008 07:07:00 AM , Blogger tom12008 said...

Hello all,
did you see this?



http://www.pressdemocrat.com/article/20080716/NEWS/345127249/0/WEATHER



The YOY median home price has supposedly plunged by just under a third, or back to 2002 levels, REO properties constitute the majority of sales, and the YOY improvements cited are pretty weak. Six months of inventory is less than I expected. This probably explains why prices aren't falling faster.

What is scary about this is that I don't see how an economy that has depended so much on consumption and real estate revenues at every level can keep things together as revenues from real estate, retail, contruction, and tourism fall off. What do you all foresee as future quality-of-life concerns?

Tom

 
At 7/17/2008 07:12:00 AM , Blogger tom12008 said...

The link didn't post in it's entirety. It's a 7/16/08 article from the Press Democrat. If I can figure out what's wrong, I'll re-post it.

Tom

 
At 7/17/2008 07:16:00 AM , Blogger tom12008 said...

Here is the tinyurl link.

http://tinyurl.com/5gmjaa

 
At 7/17/2008 07:30:00 AM , Blogger tom12008 said...

The REIC wants you to go knife-catching!

Tom



http://tinyurl.com/5nmtpa

 
At 7/23/2008 11:37:00 AM , Anonymous Foreclosure Doctor Online said...

good post! interesting to see how individual regions are affected by the housing crisis in the US!

 
At 7/24/2008 12:35:00 AM , Anonymous Anonymous said...

The price drops in SR are insane.

The $510k -> $265k two year plunge I mentioned above is still for sale, now down to $230k (55% drop in two years). Again, this is a nice house, near Montgomery Village, not in the ghetto and not on a busy street.

Let's not even talk about Taylor View Dr. Every single house is for sale there, many at late 90's prices.

Laughably you still see people trying to flip crappy little bungalows in average neighborhoods they bought a year ago. "You've got to see this house!" hahhahha

 

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