Man, this is some shocking stuff, and it's just gonna get more shocking.
Sales halved. "Reported prices" back to 2004 levels. 20% of completed homes have no buyer. Use of incentives up 218%. Inventory up 500% Speculators have fled market. And of course, realtor blames crash on hot weather.
I liked the MSM use here of "Not including incentives, the average new home price....". Note to MSM - to correctly report the bogus data being supplied by the NAR and US government, you MUST include that disclaimer - "Not including incentives". Otherwise you are participating in the lie.
New-home sales tumbled 46 percent in the third quarter from a year ago, the latest evidence of a struggling housing market in the Sacramento region.
The region's median-home price -- meaning half the homes sold for more, the other half for less -- dropped 3.9 percent to $440,240, the lowest price since the second quarter of 2004.
The third quarter started slow, possibly because hot weather dissuaded home-shoppers from tours, said Greg Paquin, owner of The Gregory Group.
Housing inventory in the region, including lots ready for building, reached 4,598 in the third quarter -- more than five times the 875 homes and lots in second-quarter 2004, the lowest point since 2000.
About 20 percent of the current housing inventory is completed homes waiting on buyers, Paquin said.
In the past six months, speculation in the market has largely stopped. Large homebuilders are not starting construction without a signed contract, said North State Building Industry Association senior vice president Dennis Rogers.
Not including incentives, the average new-home price dropped to the lowest level since third-quarter 2004 in Sacramento, Placer and Yolo counties.
The average incentive of $14,916 in the third quarter was 218 percent higher than in the third quarter of last year. The perks reached up to $50,000 for new homes and $125,000 for existing homes, according to the Gregory Group.
October 14, 2006
Some amazing numbers coming out of crashing-hard, housing-bubble-epicenter-Sacramento
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BYE BYE 2006 - HELLO 2004:
http://bakersfieldbubble.blogspot.com/
When are they going to get rid of the damn incentives and just lower the price to what they should be?
Incentives are the only way the REIC hide what's really going on out there - that an epic, historic real estate crash is underway
If they did away with the games and incentives, then everyone would find out prices are significantly down from the peak, which would cause even fewer suckers, I mean buyers, to take the plunge, which would drive prices down even faster
Incentives are the final deception. And the MSM willingly or blindly goes along with the scam.
But eventually, in the final stages of the meltdown, even the incentives won't work, or matter, and that might be when the banks and government step in to do the foreclosure and short sales.
The Sacramento real estate crash is well underway. But, how could there be any other outcome? The double-digit appreciation was unsustainable, but nobody seemed to care. The greatest Ponzi scheme of all time was in full swing and real estate prices had nowhere to go but up -- forever.
A few years ago, speculators caused 90 year old, 780 square foot Oakland bungalows to sell for over $400,000. Many people looked at the advantages of moving far away from the city and driving back and forth to work every day. This is the reason that the Sacramento Valley became a popular bedroom community of the Bay Area.
The original concept of moving to the Sacramento area, buying a huge McMansion, on a bigger lot, in a safer community, with better schools -- for a lot less money -- seemed like a trend that would go on forever. Then the speculators came to the valley and prices begin to soar. Gas prices rose 40% as the tiring commute took its toll. In the meantime, builders put up endless new Styrofoam houses in farther-flung communities and prices soared even more.
Moving back to the Bay Area started to look good to many people. The Bay Area now offered expensive junior McMansions built on 1/16 acre lots, pricey, soulless condos in high rise boxes and the traditional overpriced fixers. Even these meager options seemed better than commuting back and forth to the exurbs.
So, the endless building cycle continued in the Bay Area and Sacramento, where speculators drove the prices up and up. Now, there is more housing available in the Bay Area and Sacramento than will probably ever be needed, at prices nobody can really afford without a gimmicky loan.
Originally, loan applicants could lie about their income, exaggerate their assets and hide their debts and nobody cared. However, many liar's loans are going bad and banks are starting to verify the claims made on loan applications. As a result, there are fewer and fewer buyers with unlimited money to throw at debt boxes. An overpriced home cannot be sold to a Greater Fool without a mortgage to pay for it. Greedy speculators who stayed in the market too long are stuck in the real estate tar baby as prices in both Sacramento and the Bay Area drop. So now, the real estate market is crashing and soon, all of the phony equity gained in the last 5 years will be wiped out.
It's not just in Sacramento.
http://www.ccartoday.com/members/forms_docs/stats/2006/08_06_statistical_report.pdf
http://www.ccartoday.com/members/forms_docs/stats/2006/09_06_statistical_report.pdf
Sorry, try these:
http://tinyurl.com/ycc5x2
http://tinyurl.com/ycjenr
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