Foreclosure Stats for June; MLS Sales Go Negative

Year-over-year change
NOD: 6.9%
NTS: -26.0%

From ForeclosureRadar:

[California] Notices of Trustee Sale dropped...with the timing of the drop indicating that it was in response to the California Foreclosure Prevention Act. This law was widely believed to have little or no impact on foreclosure filings, as it exempted the majority of large lenders that operate in the state. “A number of lenders appear to have self-imposed California’s latest foreclosure moratorium on themselves, despite having received an exemption from it,” says Sean O’Toole, founder and CEO of ForeclosureRadar. “Given the number of exempt lenders it was quite surprising to see Notice of Trustee Sale filings drop by nearly 50 percent the day the new law went into effect.”
...
Notice of Trustee Sale filings were climbing late in the month so it remains unlikely this law will have any longterm impact on foreclosure activity.

Of note this month, June MLS sales were down year-over-year for the first time since January 2008.



Also worth a look (hat tip readers):
Sacramento: 70 Percent Distressed Sales in June
Economists say recovery is on the way, but it will take awhile
13%+ Sacramento Regional Unemployment Rate Likely in 2010 [pdf]
Industry searches high and low for signs of hope
Delta town struggles to hang on with 25 percent out of work
Sacramento asking prices flatlining
Movin' on Up: Mortgage defaults spread as even 'safe' borrowers falter
High-end Immunity Alert: East Sacramento tops for reduced-priced listings
Rare East Sac Million Dollar Bank Repo For Sale
Low sales for high-end
Beyond ZIndex: Zillow adds charts of sold price per sqft, median sold price, list price and more. Some of the data goes back 10 years and can be segregated by metro, county, city, and neighborhood as well as by home type and configuration. (Note: data lags several months)

"New But Blighted Fields of Dreams"

From the Modesto Bee:

The signs are painted over. The models are empty. All building has stopped at the three Falling Leaf subdivisions in Modesto's Village I. With less than half of the planned 314 homes complete, developer William Lyon Homes has quit construction. Empty lots growing weeds remain. Falling Leaf apparently is the latest victim of the housing market downturn plaguing the Northern San Joaquin Valley.
...
Falling Leaf repeatedly cut prices. Example: Its smallest house, a 1,620-square-foot plan, was priced at $379,000 in August 2006, then dropped to $329,990 by February 2007 and dropped again to $269,900 in April 2007. By last month, the development drastically sliced prices on its remaining inventory to about $100 per square foot.

From the Modesto Bee:

Modesto home builder Harinder Singh Toor hadn't planned on being a landlord, but he's become one because he hasn't been able to sell what he's built. Now he rents out eight custom homes, some as large as 5,400 square feet. "I built this house to sell, but I haven't gotten a single bite on it in a year," Toor said about the empty five-bedroom, four-bath house on North Canyon Drive. He had hoped to sell it for $1.2 million, but he'll settle for $3,000 a month in rent, even though that will cover only about half of his carrying costs.

From the McCook Daily Gazette:

The sign proclaimed "House for Sale (bank owned)." The construction looked recent and maybe a little ticky tacky but the place was obviously abandoned, with lawn, landscaping shrubs and trees dying from drought. A house, or three, down the block was not even completed but abandoned mid-construction. The current housing financial crisis is vividly on display in and around Merced, California. It was enlightening to drive through the new but blighted fields of dreams in the town that used to be our home some 35 years ago.
...
I asked my host, Jim Glidden, what happened to the people that purchased and then abandoned all the new housing...The speculators from San Jose and other affluent areas simply abandoned their investments. The poor souls who purchased a home to live in are emotionally as well as financially strapped and either leave to rent if their job is still available or just hang on by the skin of their teeth.

From the LA Times:

[Sean] O'Toole, 40, founded the website ForeclosureRadar.com last year. The site, he said, lists every default, auction and foreclosure in California...Rather than join the rush of those mining for gold in distressed real estate, O'Toole has set himself up as Levi Strauss once did. Instead of selling jeans to prospectors, though, he is selling foreclosure data to would-be buyers.
...
[In 2002] rather than compete with thousands of speculators flipping new homes, he scoured property records to find distressed houses. Over the next few years he bought and sold 152 such properties...He's stopped buying foreclosed houses because his time and money are tied up in the website, O'Toole said. But he also said he "doesn't want to catch a falling knife" as house prices plummet. Although the foreclosure explosion is fueling his business, foreclosure sales have turned into a speculator's market, O'Toole said.

From the Daily Democrat:

Yolo County officials released their 2008-09 recommended budget Friday, which included layoffs, hiring freezes and other hard-line cost-saving elements to keep even during the lean years predicted to come. "This is probably the most difficult budget for Yolo County in more than a decade," County Administrator Sharon Jensen stated in her budget letter to the Board of Supervisors. "The economy in California is still reeling from the massive shockwaves of the sub-prime mortgage crisis and its effects on housing values, the bond market and the consumer economy." As a result, the report stated the county will have to use $8.3 million of its reserve funds to keep afloat, leaving only $8 million left for a rainy day. In addition, the county's recommended budget proposed the elimination of 118 positions or six percent of the county's total workforce.

From the Sacramento Bee:

The collapsing housing market is squeezing all local governments, but Sacramento County is feeling a special pinch. Today, county supervisors will begin deliberating on a budget that could affect almost every resident in this county. Supervisors face a $123.7 million shortfall, and so they are considering cuts to medical clinics, senior centers, youth programs (to keep kids out of gangs), domestic violence counseling, probation services and many other programs.

From News10:

Cali Krystal of Sacramento said she came to EDD to discuss her efforts to seek work...The former state office technician moved from Santa Barbara to Sacramento in December. "The cost of living was really high in Santa Barbara," said Krystal. "I thought I'd relocate back to Sacramento where a lot of state jobs are here." But her job search has fallen victim to California's tough economic times. "I've been looking for work with the state since January," she explained. "Before they did the state budget cuts, I was being called for interviews back to back. Then once the [budget reduction] bill got signed, it all just stopped."

From the Modesto Bee:

United Way of Stanislaus County warned its partner agencies that a downturn in charitable donations will result in funding delays of up to six months. Overall giving, said Tom Ciccarelli, United Way president and chief executive officer, is down about 9 percent.
...
"I've been a CEO for a long time," Ciccarelli said, "and I've never seen an economy like this. What scares me is (the) 'perfect storm' of factors." With food and gas prices climbing, and the bottom falling out of the housing market, Ciccarelli said, more people are worried about hanging on to their jobs and paying their bills.
...
At the same time, Ciccarelli said, more people are turning to United Way and its partner agencies for help. "In this economy," he said, "we're seeing, and will continue to see, an increased demand for services. "All my life, I've pretty much been a 'half-full glass' kind of guy. But this is different. We really need to get out front and plan to weather this perfect storm."

From the Chico ER:

A government agency that tracks the price of housing and has flagged Butte County repeatedly for high appreciation again indicates falling prices in this market. The Office of Federal Housing Enterprise Oversight listed declines in Butte County house prices for the first quarter of 2008 in a study released last week...The service showed that comparing the first quarters of 2007 and 2008, Butte County's housing prices were down a little more than 7 percent this year...Long-time appraiser Tom Fiscus of Chico has confirmed that his business is down. "I've seen this (slump) three or four times, but never this bad. I've seen the requests (for appraisals) dwindle."

From Bloomberg:

The California Public Employees' Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines. Sacramento-based Calpers hired Morgan Stanley to review seven land deals it made with joint-venture partners and real-estate advisers, said fund spokeswoman Pat Macht.
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U.S. home prices will fall another 10 percent through the end of next year, with even steeper declines expected in "bubble areas'' in parts of California, Nevada and Arizona where there's already an "overhang of supply,'' Michelle Meyer, economist for Lehman Brothers Holding Inc. in New York, said in an interview.

From the Daily Breeze:

The real estate broker who bought Rep. Laura Richardson's house at a foreclosure sale last month is accusing her of receiving preferential treatment because her lender has issued a notice to rescind the sale. James York, owner of Red Rock Mortgage, said he would file a lawsuit against Richardson and her lender, Washington Mutual, by the end of the week, and has every intention of keeping the house. "I'm just amazed they've done this," York said. "They never would have done this for anybody else."

From The Hill:

The Congressional watchdog group Citizens for Responsibility and Ethics in Washington (CREW) on Tuesday fired a shot at Rep. Laura Richardson (D-Calif.), describing her financial problems as “appalling” and calling her a “deadbeat congresswoman.”...“Rep. Laura Richardson’s appalling financial dealings raise serious questions about her ethics,” Sloan said in a statement. “What kind of responsible adult — much less elected public official — only pays her bills when she’s called out by journalists?

From KCRA:

Sacramento Price Slashing

From Business Week:

BusinessWeek.com, with the help of Mountain View (Calif.)-based Altos Research, a real-time housing research firm, ranked 14 of the country's largest cities based on how much sellers have slashed listing prices. At the top of the list is Sacramento, where the median asking price on Apr. 11 was $226,978—a 41% drop from a year earlier, according to Altos.

From News10:

Just a few years ago it seemed impossible: a home in Sacramento County for under $100,000. But a condominium developer is ready to sell some units at auction Sunday for as little as $85,000...One-bedroom condos were initially listed for $150,000 with three-bedroom units listed at $230,000.

From the Appeal-Democrat:

Median home sales prices in Yuba County dipped to $199,000 in March on nearly a third fewer home sales than a year ago, DataQuick Information Systems said....The sales price has declined $90,000, or 31 percent, from March 2007.

From the Sacramento Bee:

Layoffs are spreading to many segments of the area economy. Michael's Furniture, a Sacramento manufacturer owned by struggling retailer Restoration Hardware, eliminated 108 jobs in March, according to state records...National Distribution Centers, a West Sacramento warehouse, expects to lay off 175 workers at the end of April.

"The Naysayers Have Been Silenced"

From the Sacramento Bee:

Jose Espinosa worked his way out of the strawberry fields of Central California in the early 1990s, determined to learn a profitable trade. He did, and as a craftsman in stucco and walls, he enjoyed 12 straight years of handsomely rewarded construction work. Six months ago he was laid off and now may lose the house he and his wife bought a couple of years ago in Stockton. They had saved $30,000 for a down payment. "That was my life savings," said the 38-year-old legal Mexican immigrant.
...
His mortgage is $2,700 a month, he said. When he bought the house, he was earning at least $1,000 a week building houses....It was enough to make him feel secure. "Everybody said it was a good idea to buy a house. So we got excited and did it," Espinosa said. "My problem now is not a subprime loan. My problem is there is no work."

From News 10 (video):

Due in large part to the mortgage crisis, the demand for new homes -- and new lumber -- is down. The [84 Lumber] Florin Road store became expendable, and [Auggie] Aleman, along with about 20 co-workers, were told without warning that they were out of a job.
...
For Aleman, his wife and two kids, it means they join the ever-growing group of people who are suffering from the slow housing market. "I had a big home," said the 27-year-old husband and father of two. "Now, I gotta find a small home, because I can't afford to live in my home anymore."

Forbes: America's Riskiest Real Estate Markets

7. Sacramento, Calif.

With a 3% foreclosure rate, the country's fifth worst, Sacramento is still a long way from working out its lending difficulties. More problematic? Construction was one of the city's biggest drivers of job growth, and jobs have slumped in line with stalled building. The good news, according to Radar Logic, is that transaction volumes are up, something that could have a lot to do with the city having the nation's highest rate of homeowners reducing prices, based on data from ZipRealty. Sacto's biggest risk is whether or not it can add enough jobs to bring money and buyers into the city.

From the Sacramento Business Journal:

[B]uyers hesitate to commit for fear the market is still falling. Carmen Micsa, a broker associate with Re/Max Gold in Fair Oaks who specializes in condos, helps persuade prospects with an offer of a seven-day cruise. "I started doing this two years ago when the market turned," said Micsa, who offers the deal to both buyers and sellers. "You do anything possible so that you can motivate people to become homeowners."
...
Such tactics get mixed reviews, however. "We used to do a lot of that wacky stuff," said Cohee at Pacific West. "Nobody is going to buy a home based on that. Maybe it will get them out to talk to you."

From the Sacramento Bee:

Most folks agree that times are tough in the real estate business. But don't say that out loud if you work at the local brokerage offices of Cornish & Carey Commercial. Annoyed by the negative comments of co-workers, one employee suggested a $1 fine be collected from anyone uttering a discouraging word about the current real estate market.

"He was tired of it," C&C boss John Frisch says of the semi-serious proposal. "It doesn't help your (work) attitude to be around negativity." The idea was first adopted in the firm's Roseville office. Then it spread to Sacramento. Since then, Frisch says, the naysayers have been silenced. Not a single dollar has gone into the C&C kitty.

Has all that positive thinking helped boost sales? "It hasn't trickled down to the market yet," Frisch says.

Sacramento Bee: "Bubble Bursts in Elk Grove"

From the Sacramento Bee:

Bubble bursts in Elk Grove

Elk Grove, already mired in an economic slump, may be at the forefront of what's coming to the entire Sacramento region. Already home foreclosures there are up fivefold. Unemployment has climbed. Vacancies at small strip malls are three times the regionwide average, and Laguna Ridge – a big new master-planned development – is largely a ghost town of unsold homes and vacant lots.
...
The downturn calls into question just how strong the boom really was. Rising prices enabled an untold number of residents to tap their home equity to buy sport-utility vehicles and other consumer goods. But others did well just to buy a house. They were wealthy on paper but chronically short of cash.

The Sacramento Natural Foods Co-op found this out the hard way. Preparing to expand, the Co-op looked at demographic studies of Elk Grove and saw nothing but high incomes. The Census Bureau pegged Elk Grove's median family income in 2006 at $81,771, or 25 percent higher than the state's median. But when the Co-op opened in the Elk Grove Marketplace on Bond Road, it found many residents weren't so rich after all. "A lot of these 70,000 new residents down there were young families with mortgages up to their eyeballs," said general manager Paul Cultrera. "The disposable income wasn't there. … It's tied up in mortgages and new furniture." The store closed in January 2007 and gave way to a discount food chain, Grocery Outlet.
...
Because of massive overbuilding and other issues, the vacancy rate at Elk Grove's smaller strip malls – those that frequently cater to independent merchants – has jumped to nearly 35 percent...Garrick Brown, regional research director at Colliers International real estate...said. That's three times the area average. In one stretch along Interstate 5, the vacancy rate is 68 percent, he added.

From the Stockton Record:

The lunch rush used to fill Campesino Café. That hasn't been the case for the past several months. A handful of south side businesses, such as Campesino Café, that cater mostly to Latino immigrant workers are not only seeing the effects of a sluggish economy, but they also say reverse migration has left their business nearly empty of customers, who are fleeing lackluster employment conditions.
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The soft housing market has played a huge role in the economic slowdown in San Joaquin County. The housing market slowed job growth in the county from 1.3 percent in the fourth quarter of 2006 to 0.4 percent in the fourth quarter of 2007, according to University of the Pacific's Business Forecasting Center.

From the Sacramento Bee:

Sacramento home builders have tried practically everything to move product in a slow market: lower prices, auctions, luxurious upgrades and so on. Now they're offering cheap money. Working in tandem with lenders, two home builders are offering mortgage financing for new homes at below-market rates.
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John Arvanitis, a Citrus Heights mortgage broker, said interest-rate buydowns are preferable to continued price reductions, which drive down market values for everyone in the community. "You don't want to perpetuate (or) assist in a market crash," said Arvanitis, president of Sunrise Vista Mortgage Co.

From the Sacramento Business Journal:

There are 9,310 bank-owned properties in Sacramento County, according to RealtyTrac Inc., and there are 8,337 more homes in pre-foreclosure, which means the owner is at least two months late making mortgage payments.

News10: Foreclosure Fears Pack Stockton Workshop (video)

'2008 Is Going To Be A Year To Remember'

From the Sacramento Bee:

Statistics released Thursday showed that median sales prices declined 20 percent during the year in Sacramento County for new and existing homes combined. Property researcher DataQuick Information Systems Inc. declared it the steepest fall for a large urban county in California.
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"What you're starting to see right now with the foreclosure inventory swelling is the banks are getting aggressive," said Lincoln-based real estate agent Mike Toste. "They're the ones wheeling. If all their competition is bank-owned and they drop prices 30 to 40 percent, then they've got to do the same thing. If they can't sell within 60 to 90 days, they're getting extremely hungry. I think 2008 is going to be a year to remember."
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[T]he prospects for another tough year have some of 2007's buyers already re-examining their decisions. John Reed moved to Sacramento last year from Portland when he became a computer programmer for the state. He bought a new home in West Sacramento last July. "I have a lot of second thoughts now," Reed said. "I knew the prices were dropping a little, but I didn't expect them to go down so much. They've probably gone down 10 percent in six months."

DataQuick home sales and price trends by zip
DataQuick home sales and price trends by county

From CBS 13:

From October to December of 2006, the median selling price of a home in north highlands was $264,000. In that same quarter of 2007, 63 homes were sold here, and the average price was $153,000. That's a 42.5% decline in home values according to data quick information systems.
...
But, for the Mahans, and the thousands of families like them across the valley, there is hope on the real estate horizon. Suzanne O'Keefe, a Sacramento State professor, says, "All the information I've seen has pointed to hopefully a turnaround by the end of 2008."

From the Sacramento Bee:

The customary real estate experts have had their say about the state of the Sacramento-area housing market for 2008. In last week's column their consensus called for a rough first half of this year, a more stable second half and some sense of a turnaround and recovery in early 2009. But we asked, too, for your take on the market. The responses seemed a little more pessimistic than the authorities we quoted.
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Dave W. Walker, general building contractor in Citrus Heights: I disagree with all their expert guesses. I have been in the construction field for over 38 years, and this is the worst I have ever seen the housing industry...My personal feeling is that a big problem is only starting.
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Diana Sanger, partner with RBI Builder Solutions in Loomis: What I think: The Sacramento market will not turn around until mid-2010.
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Steve Topper of Sacramento, a former banker who writes an online newsletter about marketing and advertising: We are a long way from the bottom. I believe the best guess for the duration of this correction is that it will take as long to deflate the bubble as it took to inflate it. So, assuming the bubble started inflating in 2002 and peaked at the end of 2006, it will take five years to reach equilibrium, which puts it at the end of 2011.

From News10:

Many small business owners admit their profits are on a downward slide due to current economic conditions..."I believe everyone across the board is down," [restaurant owner Carl] Steagall said. "With the housing market kind of settling down quite a bit, disposable income and the entertainment dollars have decreased pretty drastically."
~~~
Even before Christmas, News10 started working on a series of stories about an impending recession. It was clear people were already feeling the pinch of reduced wages, layoffs, and rising gas and food prices.

Still, just mentioning the "R" word gives most economists the jitters. They've been reluctant to name this economic climate as a recession because a significant part of a recession is the public's frame of mind and how it can affect consumer spending. But, UC Davis economist Brad Barber says there's no ignoring the fact that "the indicators of recession are growing stronger, not weaker."

Video: Local Businesses Feel Economic Punch
Video: Has the U.S. Hit a Recession?
Video: Sagging Housing Market Compounds Troubles for Natomas

From the Sacramento Business Journal:

Greater Sacramento lost a net 300 jobs in December and saw annual job growth fall to a puny 0.3 percent as the jobless rate increased in both California and the capital region, the state Employment Development Department reported Friday.

From the Sacramento Bee:

Sacramento's unemployment rose three-tenths of a point to 5.9 percent, the Employment Development Department said Friday. It was the highest unemployment Sacramento has seen since March 2004.

From Central Valley Business Times:

The confidence California workers have in their economic future is at a record low, according to a survey done for Spherion Inc. (NYSE: SFN). Its California Employee Confidence Index dropped 2.5 points to 50.3 in December, the lowest level seen in the history of the survey.

From the Sacramento Bee:

Yuba County voters, do Gary Gallelli a favor on Feb. 5: Vote against his housing development. Never mind that the developer has fought for a decade to build the Yuba Highlands – 5,100 suburban-style homes in the oak-shrouded foothills near Beale Air Force Base. And disregard the thousands of dollars he's poured into newspaper and television ads touting the controversial project as an economic savior.
Gallelli doesn't want to build it anymore. At least not as proposed on the ballot. "If we win in February, we'll have to spend money on something we no longer believe in," the Rocklin developer said in an interview Thursday. "So, yes, we're asking people to vote 'no.' "

Gallelli's emerging campaign against his own campaign is testament to a housing market slump that is hitting the Sacramento area harder than just about anywhere. Gallelli said he'd been pushing so hard for the Highlands, on the ballot as Measure N, that he failed to recognize how sour the market had turned. "You never step back to think of the consequences of what you're doing or ask if this still is a good project," Gallelli said. "I guess you could say we were in the heat of battle."

Weekend reading/viewing:

• The new bubble-prone economy (LA Times)
• Why Baby Boomers May Bust the Housing Market (WSJ)
• The “generational housing bubble” (The Economist)
• How I blew off the housing bubble and cleaned up financially (LA Times)
• Warning lights (The Economist)
• This is not your father's recession (MarketWatch)
• They're all double-digit declines now (Mess That Greenspan Made)
• Video: Bulls and Bears on Housing (California Housing Forecast) Summary (CNN)
• Is U.S. heading for Japan-like troubles? (APP.com)

"Like Riding a Roller Coaster - Headed Steeply Down"

From the Stockton Record:

Home foreclosures and a slammed residential market in San Joaquin County continue to make dark headlines, but there are growing signs about the negative effects of the home-market downturn on other parts of the area economy. Offices vacancies - typically lean in recent years - have jumped, as has unemployment related to the housing industry. There also are signs that consumer spending is slowing, both in retail employment and such a mark as new-car sales.
...
In recent years, office vacancies been less than 2 percent have most of north Stockton, she said. These days, office vacancies have climbed to 16 percent, a level not seen since the early '90s, [Shelly] Cannon-Keely, [CB Richard Ellis] said. Half the vacancies are sublease spaces from downsizing, she said, "and we haven't had subleasing for years."

Also, now that the area's population boom has slowed, the market is much quieter, she said. "There aren't all the companies out there expanding because of the population growth," she said. "They are conservative, waiting to see what's going to happen."
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John Solis, executive director of the San Joaquin County Employment and Economic Development Department, said the residential housing-market downturn has hurt. "There definitely has been a loss of jobs with real-estate brokers, title companies and construction in the hundreds," he said.
...
"It's a buyer's market but nobody's buying. In the next six months, the prices of housing will continue to drop, and nobody will buy because they don't want to buy until prices are down." There really not much place in the employment market to absorb the workers from real estate-related fields, he said.
...
Ian Poth, a tile installer for a Modesto tile company, figured he's lucky to be working on the few homes still being built these days in Spanos Park West. Right now the construction field feels like riding a roller coaster - headed steeply down. "The job market is slowing down in construction right now," he said. "I got a lot of buddies out of work."

From Bloomberg:

Federal Reserve policy makers underestimated the role that housing plays in triggering recessions and merit an 'F' grade for their failure, said Ed Leamer, director of an economic forecasting group at UCLA...The Fed ought to have raised interest rates more aggressively to head off the "bubble" in home prices that grew from 2003 to 2005 and should have lowered rates by now, he said.
...
Leamer said in an interview today at Jackson Hole that some former "hot markets," such as pockets of California, may see declines of 30 percent to 40 percent.

From Bloomberg:

Homes may lose as much as half their value in some U.S. cities as the housing bust deepens, according to Yale University professor Robert Shiller. "The examples we have of past cycles indicate that major declines in real home prices -- even 50 percent declines in some places -- are entirely possible going forward from today or from the not too distant future,'' Shiller wrote in a paper presented today at an economic symposium in Jackson Hole, Wyoming.
...
Because price gains were larger and more widespread this time compared with past speculative booms, the risk of "substantial'' price declines is greater, wrote Shiller, also the chief economist and co-founder of MacroMarkets LLC.
...
Shiller noted that 50 percent declines in the worth of some cities' homes wouldn't be unprecedented. Prices in London and Los Angeles fell by almost that amount from the late 1980s to mid- 1990s.

U.S. home values, adjusted for inflation, rose 86 percent from the end of 1996 to early 2006, the peak of the most recent housing boom, Shiller said. Economic factors such as rents and construction costs don't appear to explain the jump in prices, suggesting "speculative thinking'' and a "boom psychology'' was at work. "Extravagant'' expectations for future price increases since the late 1990s fueled the bubble, Shiller said.

From the Fresno Bee:

A real estate mystery lingers in southeast Fresno: Why would a developer build two dozen houses, sell only two and then disappear?

Few cars visit this ghost tract south of Butler Avenue, known as Ashwood Park. Weeds choke many lots. The model home complex is closed. There are no real estate signs in the yards, and no phone numbers posted anywhere. Just placards in the windows that read "available."
...
It's unclear what happened to this neighborhood. Officials at Lafferty Homes did not respond to repeated phone calls...But experts say the developer likely turned the tract over to lenders because it couldn't sell houses fast enough to cover debt payments -- much as some troubled home buyers walk away from a house they cannot afford and cannot sell.
...
Regional builder Dunmore Homes is pressing ahead with tracts in Dinuba but is putting one at Temperance and Dakota avenues in Fresno on hold....The company will finish grading the site but won't go any further right now, said Mike Lutz, division president. "In light of the current marketplace, we are concerned about putting more money into it and bringing it to market," he said. "We will sit and wait." Dunmore's office staff in Fresno, which oversees projects in Dinuba, Bakersfield, Merced, Atwater and Livingston, has shrunk from 12 employees to five, Lutz said.

From the Stockton Record:

Rosalee and Ernie Schimpf have enjoyed the country life east of Stockton for nearly three decades...But now they want to get on with the next phase of their lives - retirement and relocation to Colorado near their children.

This isn't the real-estate market for such dreams, so they are discovering as they try to sell in a brutally slow home-sales market that has left them feeling as if they have hit a brick wall. There have been lots of lookers, they said. They can't get any serious offers, though, for their 1,700-square-foot home, plus finished basement and a 600-square-foot workshop on two acres. They got the property appraised and initially set the price at $589,000 in May, later lowered to $549,000, a price below anything similar in the area, they said. Still, the only offer they have gotten came in at almost one-third below asking price.
...
The Schimpfs said they have followed the rises and falls in the real-estate market over the years but never expected to see a downturn so severe..."We didn't know whether to laugh or cry," Rosalee Schimpf said. "We look at each other and ask, 'Could we have chosen a worse time to sell?'"
...
"Buyers right now are saying the market is going to come down even more, so if we're going to buy now it's going to be for a lot less than they're asking," [Jerry] Abbott [president and co-owner of Coldwell Banker Grupe] said.

From the Sacramento Bee (hat tip Gwynster):

Tracy Trammell sold the boat, the extra vehicles and tried everything to "find a way to refinance, or do what I could not to lose the house for my children." She is in a bind all too common in Sacramento: a home losing value and an adjustable-rate mortgage with payments that jumped $1,000 a month in June.
...
Trammel made her new $3,000 payment in June. She made another in July. Then she considered reality. She is bound to lose the house with this loan, a loan with one more year before its pre-payment penalty expires. When Countrywide suggested a roommate, Trammell felt insulted. She skipped a payment. It is one more foreclosure now in motion.
...
As many attempts at solutions fail and foreclosures rise, arguments abound about who bears responsibility. Consumer advocates say lenders freely gave cash to people with risky profiles and now owe them waivers of prepayment penalties and options to restructure loans.

Lenders, for their part, say it's a two-way street. Staffers often find people unwilling to give up cell phone service or satellite TV to finance strategies to save their houses, Ed Delgado, a senior Wells Fargo executive, told the California Senate Committee on Banking, Finance and Insurance last month.

'There's nothing to compare it to'

From the New York Times (hat tip Calculated Risk):

The median price of American homes is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950...The reversal is particularly striking because many government officials and housing-industry executives had said that a nationwide decline would never happen, even though prices had fallen in some coastal areas as recently as the early 1990s.

From the Sacramento Bee:

In a sense, New Century and other fallen lenders -- as well as homeowners who are losing their properties -- are victims of history. Until now, most experts say, the housing market had never undergone a serious swoon as long as the economy was still growing. Lenders took comfort in the argument that only a recession could do major harm to the housing sector and ignored signs that the market was going cold.
...
Mortgage specialist Heather Fern-Luzzi, with two decades of experience in the business, thought she'd seen it all. But this downturn, which just claimed her job, has her baffled. "There's nothing to compare it to," said Fern-Luzzi, the Roseville branch manager of recently collapsed mortgage lender First Magnus Financial Corp. "I've seen it since the 1980s -- I've been in downward markets and there's always been the light at the end of the tunnel," she said as she packed files for shipment to First Magnus' headquarters in Arizona. "This one seems to be different."
...
Loose loans have made the collapse unusually swift. Defaults and foreclosures have increased at a much faster pace than in previous slumps. In the 1990s, even with unemployment soaring, it took five years for defaults in Sacramento County to double, according to DataQuick Information Systems. This time, the default volume has more than tripled in a little over a year.
...
"It's more severe now; it's much faster," said Michael Carney, a professor of finance and real estate at California State Polytechnic University, Pomona, and director of the nonprofit Real Estate Research Council.

Mortgage defaults 90s v. now chart (4-county)

• 90's peak: 3,055 (6-7 years into bust)
  
• 2007 Q2: 5,201 (2 years into bust)
  

From Realty Times:

Banks, loan companies and small real estate companies are going out of business. Record numbers of home owners are going into foreclosure or attempting to sell their home "short sale" (less than what they owe). Many loan companies have stopped doing 100% loans and eliminated several other loan products, raised rates and requirements for the loans they will do.

Many have said that this market is worst than 1991 for sellers and most anyone involved in the real estate industry. I've been in real estate full time now since 1991 and I agree. We have more internet technology than we did in 1991 so more information is available to people than before and consumer confidence is at an all time low.

From the Sacramento Bee's editorial page:

As is now well known, the subprime blimp has crashed to Earth, and the wreckage on the ground includes tens of thousands of homeowners and real estate businesses that, for a variety of reasons, failed to see this crash coming.
...
This page has warned since 2003 that the real estate market was being overinflated by risky and predatory lending practices, such as interest-only loans and deceptive marketing. But we failed to anticipate that when the bubble finally burst, it would not only send shock waves into subdivisions in Stockton and Elk Grove but to markets around the globe.
...
Looking back, it is easy to see how this bubble burst so dramatically. Behind each subprime lender was a phalanx of financial institutions, which bundled risky loans with regular mortgages and sold them to investors. Just as many prospective home buyers imprudently failed to examine the conditions of their loans, many investors didn't realize the risks involved with what they were buying. When they did, they panicked.

From the Modesto Bee:

If all the homes for sale in Modesto were crammed on a menu, it probably would be several inches thick and weigh a couple of pounds. A recent search of Realtor.com showed 2,273 single-family homes; 197 condos and town homes; and 131 mobile homes for sale in Modesto.
...
"When there's so much to choose from, you kind of get gun-shy," [Modesto newcomer Kevin] Schinmann said, "because you know there's always going to be something else to look at." And look he did. During his three-month search, Schinmann studied a couple of hundred Internet listings and toured about 40 homes. "We ended up buying the very first house we had looked at online when we were back in Chicago," Schinmann said. But between the time he initially spotted that Bayview Drive house and the day he bought it, he said, "the price dropped $130,000."

It's been that kind of market. Prices for new and used homes have been dropping as inventory has soared. Median sales prices are down more than 13 percent since last summer and sales volume has plunged about 45 percent.

From the Stockton Record:

Victoria Rodriguez was not only a thriving real-estate agent in recent years, she was honored as one the area's top-selling real-estate agents four years in a row. That was in the boom time, and that spigot shut down to a trickle nearly two years ago. Today Rodriguez is still in the real-estate field, but she's not working as an agent. As a single mother with four children, she said she simply couldn't pay her bills. This in a residential real-estate market slammed so hard that sales plummeted over the months from nearly 900 in May 2005 to a low of 268 last month - a 70 percent decline in business.
...
The Central Valley Association of Realtors, which covers much of San Joaquin County and Stanislaus County, reported that membership is down about 14 percent since January. Marian Norris, president of the group, said the market shift was partly the reason why she closed her Real Estate Gateway agency in the spring.

Also from The Record:

At first glance it looks likes a dream business plucked straight from a late-night infomercial: buy foreclosed homes and turn them around in a short time for a big profit. It's the American dream.

But in the case of Stockton's Iftikhar Ahmad, federal agents suspect it was too good to be true. Ahmad is accused of spearheading a ring using his company I&R Investment Properties to illegally "flip" more than 100 homes, allowing him to reap millions of dollars along the way...The one common thread in all the deals was Ahmad who bought up Stockton homes in foreclosure - often paying cash - and sold them at inflated prices to "straw buyers," or fake buyers, created with the help of stolen identities or fake documents, the affidavit said.

Ahmad supposedly sold the homes to some of those named in the affidavit who obtained subprime loans using the false identities. That allowed them to put little or nothing down to start. Most of the homes went into foreclosure within months when nobody made the loan payments, the affidavit says. Ahmad amassed $8.6 million in the past decade....

"This is happening everywhere in the country, and it's easy to do," said Ralph Roberts, a Detroit-based realtor who has published widely on property scams...In mortgage scams, lenders lose the most money, but neighbors of the foreclosed homes who are left looking at empty, unkempt homes suffer most, Roberts said. Their property values drop, he said, describing the scams as a "cancer of the American dream."

"A New Hit" on the Sacramento Housing Market

From the Sacramento Bee:

...[H]omebuyers are also finding fewer loan products available to finance their buys, say Sacramento-area lenders. They claim widespread investor concern over the rising risks of loan defaults and foreclosures is shrinking the pool of money for home loans. "There's a lot of product this week that's been taken off the shelf," said Brent Wilson, mortgage strategist with Sacramento-based Comstock Mortgage.

No one is sure how long this surge of credit tightening will continue. But it signals a new hit on a Sacramento-area housing market already coping with rising defaults, slow sales, excess supply and downward price pressure in many neighborhoods.

Also from The Bee:

All over the capital region, home builders are trying smaller lots and shaving extras to bring down prices. But some El Dorado Hills architects are unveiling the ultimate, a return to something not seen here in years. It's the $150,000 house. This is not as far-fetched as you might think. Prices for new small-lot houses already are dipping to $230,000 in parts of the region.
...
[B]ased on what we know to be true on sales of homes now, $150,000 is very achievable," says Kerrin West...West believes "the market for this is huge." "We've got so many folks priced out of the market," she says. "Also, on the flip side, people are making too much money to qualify for low-income housing." Should builders eventually sign on, these could be the first $150,000 new houses seen in the region since the earliest days of a housing boom that began to take shape in 2000.

From CNN Money:

...[M]otivated sellers may have to slash prices to move properties. Already, in Sacramento, 48 percent of sellers have discounted from their original listing price. Some 47 percent of Orange County, California sellers have dropped their price and more than 45 percent of sellers in both Boston and Phoenix have done the same.

From Bloomberg:

The 9,000 unsold houses sitting empty in Northern California's Sacramento and Yolo counties aren't just a headache for owners: They're a threat to public health. The danger is in their yards, where deserted swimming pools, spas and ponds provide prime breeding grounds for mosquitoes. That heightens the risk of West Nile virus....

About 1,200 of the empty houses are known to have swimming pools, said Greg Vlasek, director of government relations for the Sacramento Association of Realtors.
...
Real-estate agents are being drafted to help combat the spread of the sometimes fatal virus. Health officials asked agents to report vacant residences with standing water, in what the National Association of Realtors says is an effort unique to the Sacramento area.
...
More than 1,000 homes have been reported since the program began in May, Brown said. The average time a single-family home sits on the market in Sacramento was 52 days at the end of June, according to the Sacramento Association of Realtors. The selling time tripled in the past three years.

Two Years of Change

From Rocklin and Roseville Today

Early on we had a number of people, who came to be known as “bubblers,” who
were using words like, “crash” and “doomsday.” Right now, I don’t recall anyone being very close to predicting where we are today. The local real estate market has not crashed, not all homeowners wish they were renters; some of us who are working in the industry still have jobs and are making a living doing something we enjoy. At the same time it is also clear that all the changes of the past two years have taken their toll on companies and individuals. Many jobs in the industry are gone, there are more homeowners facing foreclosure than we know about and some dreams based on growing equity have been shattered.

'Run Out of Time'

From USA Today (via Builder Online) (hat tip: HBB):

Lupe Arroyo and her husband, Richard, for example, just took their Sacramento home off the market. Having tried to sell it since April, they cut their $369,000 asking price three times, to $329,500. "This last reduction was well below market value," Arroyo, 36, says. "It was a giveaway (price), and we still had a low-ball offer. We've frankly run out of time. We were planning to move to a different area, and we wanted to get our daughter enrolled in a new school. Now, it's one month before school starts."

Their agent, Tracey Saizan, says five of her clients have taken their homes off the market in the past few days. "I've had heart-to-heart talks with sellers who refuse to keep reducing prices."

From the Tracy Press:

Neighbors are finding it difficult to tolerate the condition of the house on the corner of Kavanagh Avenue and Lincoln Boulevard. It’s a typical suburban dwelling, a home just like theirs. But the house at 2901 Lincoln Blvd., is in foreclosure and abandoned. The front yard has chest-high weeds in place of a lawn, the side gate and garage door are wide open, and cigarette butts are strewn across the driveway. It appears to be a sitting duck for vandals and squatters.
...
The Lincoln Avenue property is hardly the only one in such shape. More than 10 percent of homes on the market in Tracy are being taken over by banks in foreclosure proceedings, local real estate agent Brian Barringer said. That’s 104 homes citywide, many of them abandoned or neglected....

Tracy residents have been filing a record number of complaints about the unkempt yards, stagnant pools and attempted burglaries associated with foreclosed homes, according to city code enforcement officer Jim Decker. “We have had a lot of complaints about foreclosed homes,” said Decker, “and we’ve had a marked increase of calls in the last 2½ months.” Decker said complaints haven’t come from one neighborhood in particular, but from areas both rich and poor throughout the city. “There’s really no concentration of these abandoned homes. They’re just sporadic locations,” he said. “These are vacant homes people have just abandoned.”

But real estate professionals are quick to point to the root of the problem — bad loans.

From the Stockton Record:

He is a successful business man, owner of a restaurant, a home and some rental property with decent credit. You wouldn't think Efrain Flores, 47, was struggling with mortgage payments.

He wasn't, until a few months ago, after walking into a subprime lender office to refinance his home. Flores walked out with an adjustable interest loan, 5.5 percent more than his original loan. Flores, a Spanish-speaker, signed something he didn't understand.
...
The refinance was supposed to trim Flores' monthly payment, but instead it nearly doubled from his original monthly mortgage by $1,000. And now, his equity line is dissolved. "I've worked hard to be someone and now I feel the bank is robbing me"...he said.
...
"By far, the ones that got mixed up with the piggy back loans to finance 100 percent of the property are most at risk," said Richard Pittman, housing services coordinator with ByDesign Solutions, a credit counseling organization based in Los Angeles. Often, by the time homeowners seek help, 60 percent of them find out it's too late to save their homes, said Pittman. "They have to pick up the phone before the damage starts, as soon as they realize the adjustment is coming up," Pittman said.

Sacramento Horton Lays an Egg

From the Associated Press:

The traditional spring home-selling season was a bust for D.R. Horton Inc., one of the biggest nationwide homebuilders. Horton said Tuesday it will post a loss from operations for its latest quarter after net orders fell 40 percent and it wrote down the value of unsold houses...The rate of canceled orders was 38 percent...The report provided more evidence that the housing sector continues to sink.
...
A glut of unsold homes has pushed prices lower - Horton said it has adjusted prices to cope with the deteriorating market. Builders have also been throwing in extras to entice buyers. But neither freebies nor lower prices have brought in enough traffic, particularly for entry-level homes where the pool of available buyers is being reduced by tougher mortgage-underwriting standards.

Horton's June-quarter orders fell the most - 53 percent - in California. Horton was building entry-level homes in Sacramento and other inland markets that emerged as affordable alternatives to the pricey coastal markets but are struggling now.

From the Sacramento Business Journal:

In the six-county Sacramento area, D.R. Horton sold 182 homes January through May 2007. The homebuilder had sold 590 homes in the same period of 2006.

-69%? Ouch!

Sacramento Real Estate Market - June 2007

The Wall Street Journal confirms that Sacramento housing inventory has exceeded last year's high (see also BMIT). Supply of MLS inventory now stands at about 11 months according to the Sacramento Real Estate Statistics blog.

The Sacramento real estate market also tops a priced reduced list, beating out 17 other housing markets such as Phoenix and Boston (see the chart here). According to The Journal, 47.7% of Sacramento homes for sale have reduced their listing prices.

Meanwhile, Sacramento real estate prices are falling by double-digits year-over-year according to the Sacramento Real Estate Blog:

• Sacramento County Median: -10.5% [-13.4% since peak]
• Sacramento County $/SF: -10.3%

Cue the Marketing Mavens

From the Sacramento Business Journal:

Scavenger hunts and concert sponsorships are just a couple of the more creative tools that marketing firms have recently unveiled to lure potential buyers to a sluggish new-home and condominium market.
...
Greg Paquin, a new-home analyst and founder of The Gregory Group, said price cuts and incentives are now widespread, so homebuilders are looking for new ways to distinguish themselves. "The philosophy is: 'Let's get people in the door before they go next door,' " Paquin said. "Everyone's trying to be unique and stand out from the crowd."

Advertising has become common on radio, with live presentations at new-home sites; television advertising is the next logical step, he said. Paquin noted other ploys, such as free dips in swimming pools for those touring model homes.
...
With a market expected to continue to slump, perhaps for another 18 months to two years, according to Paquin's estimate, builders will likely continue to rely on unique marketing. "Soon you'll be seeing hot air balloons with messages on the side," Paquin said.

17 Months of Inventory

From the Stockton Record:

[T]he median sales price [in San Joaquin County] has steadily fallen from $395,000 in February to $370,000 last month. That compares with a high of $425,000 last July.

Meanwhile, the number of listings, fed by rising foreclosure numbers, broke the 5,000 mark for the first time since the downturn began in the fall of 2005....At the current anemic sales pace, it would take 17 months to sell those homes if no other houses went on the market in that period.

"The prices are coming down," said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton. "When people are reducing the sales price of their home, they're not reducing it by $3,000 to $5,000, they're reducing it by $10,000 or $15,000 - or more.
...
Sean Snaith...said the "housing hangover" is lasting longer than thought because of the subprime market implosion that began in March. "It is a painful transition, no doubt about it," he said. "With all the inventory, it's difficult to sell a house, and there's downward pressure on prices." He predicted that the market wouldn't begin to return to normalcy until the first or second quarter of next year.

Must be Sean Snaith week at The Record.

'Confused' Potential Buyers Remain on the Fence

From the Sacramento Bee:

Prized species spotted locally -- homebuyers

Now that it's done, Joi Bess couldn't be happier about selling her Rancho Cordova house and buying a bigger one in Folsom...Bess says she still wishes she had made more off the house in Rancho Cordova. But she takes comfort in knowing she got a house in Folsom for $100,000 less than those like it cost two years ago..."Our consensus was if you're going to do something, you better do something now," she says.
...
In what's proving to be a second straight year of slowed sales and falling prices in many neighborhoods, that closing makes Bess a hero to the Sacramento region's real estate trade. She is a buyer.
...
"I wish all the other people luck," she says from the calm of her new house. "I still see a lot of other properties for sale. I remember that feeling: 'Is it going to sell?' It's really a tough game."
...
[Michael] Alexander recently stopped looking -- for now. He cites the sudden crackdown on 100 percent financing due to rising numbers of loan defaults..."It was starting to look feasible," Alexander says. "It was really looking feasible. We talked to a Realtor a few weeks ago, and that's when all the credit issues hit."

Alexander's departure from the buyer pool puts him among an estimated 30 percent of potential buyers who have vanished from area model homes and open houses as the real estate season reaches its busiest months...Alexander says, wherever he looks he sees prices going down. Or he sees that prices are too high and the houses aren't selling.
...
The Wahlstroms, a couple in their 50s, recently toured an Elk Grove condominium complex. Its builder had contracted with an auction company to unload a handful of unsold units. The opening bid for a 1,200-square-foot condo previously valued at $259,900: $149,000.

John and Celeste Wahlstrom looked one over for their 22-year-old daughter, who saw it advertised on television..."But we're not in a hurry," John says.

Part of the reason is uncertainty about where this market is heading. In 2001, the couple bought a house in Elk Grove and more than doubled their investment before selling it. They're not having the same luck with the value of their new house, bought in 2005. "I don't know about the values," says Celeste. "Right now everything is going down."

With that sentiment, the Wahlstroms take their place among thousands of potential buyers whom sales reps for home builders sometimes describe as "confused." Many would-be buyers who have seen prices fall for months are waiting for them to fall more.

Even as agents clamor that "now is the time to buy," they remain on the fence. They're waiting for the bottom of a market that began to weaken in late summer 2005.

Flashback: Jasmine Condominium

Sacramento Land(ing), April 25, 2006:

This condo complex in Elk Grove wants to reward reluctant buyers "big time."

Jasmine, a community of attached homes in Elk Grove, will hold a special spring celebration with as much as $50,000 off some homes, as well as special financing and other incentives. "When we say this is a special celebration, we really mean it," said Scott Bolli, director of sales for Pacific West Cos., a residential development company. "We've never offered so much. If you've been waiting, it's paid off, big time."

Wow! I wonder what the payoff will be if one waits even longer!

Sacramento Land(ing), May 30, 2006:

At Jasmine:
May 13, 2006: "Prices start in the high $200,000s"
May 20, 2006: "Home prices start in the mid-$200,000s"

Today, seven Jasmine condos went on the auction block. A reader sent in this ad:

Seven Luxury Condos in Elk Grove
Reduced! Opening Bids Now From $149,000!

'Struggling to Find Qualified Buyers' in Sacramento

From Reuters:

D.R. Horton Inc., the largest U.S. home builder, said on Thursday quarterly earnings fell 85 percent, in part due to charges related to the lower value of land.
...
The results included charges totaling $81.2 million, or 16 cents per share for land options forfeited and for the lower value of inventory of land and houses it owns.

"We believe that there will be continued softness in '08, and I would expect that we'll continue to adjust our inventories downward in the first two quarters of '08," Tomnitz said.

About 80 percent of the impairment charges were related to California projects, particularly in Sacramento.

From the Associated Press:

The weak market will linger into 2008 and could get worse before it improves, he said, blaming some of the company's troubles on high home prices and high costs for builders in California.

"We're struggling to find qualified buyers" in Sacramento and San Diego, Tomnitz said. "The only way we can increase that pool of affordable buyers is to make a product more affordable and lower average sales prices."

Tomnitz said the company had cut prices in California in the past month after trying to hold them steady.

'Feeling the Effects of the Slowdown in the Subprime Market'

From the Sacramento Business Journal:

National homebuilding giant D.R. Horton Inc. on Tuesday announced its second-quarter new-home sales dropped by 37 percent -- or almost 5,800 fewer homes than a year ago, with much of the slow down in California and the Southwest.
...
D.R. Horton was the Sacramento region's leading homebuilder last year, selling 1,168 homes -- almost 12 percent of the market share. But the company's sales in the area have slowed in recent weeks, after an impressive 100 homes in January, but only seven in February, according to Hanley Wood Market Intelligence. D.R. Horton has 5.6 percent of the new-home market for the first two months of the year.

From the Stockton Record:

New-home sales jumped by nearly 20 percent in the first quarter in San Joaquin County, up from the previous quarter as well as from the first quarter of 2006, when a housing slowdown was settling in.

Prices, though, continued to slide, from an average $519,350 at the end of last year to $507,115 in the most recent quarter, a decline of 2.4 percent, according to the latest sales numbers from the Gregory Group, a real estate information and consulting service in Folsom.

That's down from a high of well above $550,000 in the third quarter of 2006.
...
Even with the sales-numbers growth, the first quarter was mixed, said Joe Anfuso, president of Stockton-based Florsheim Homes.

The number of people out looking at home models significantly increased beginning in mid-January, he said, but that dried up again several weeks ago with the implosion of the subprime market, which either took many potential buyers out of the market or scared them off for now with reports of tightening credit standards.

"I certainly think all the builders are going to be feeling the effects of the slowdown in the subprime market," Anfuso said. "It will take some time to flush out of the system."

Gregory Group president Greg Paquin said builders have been lowering the presence of incentives in the sales market because these days, would-be buyers are responding better to lower sales prices, rather than to higher base prices with incentive packages thrown in.

'Dumping' Homes

From the Manteca Bulletin:

Three homes in Marsh Creek and Springtime Estates — two popular custom neighborhoods in East Manteca — reflect the new realities of home selling in the South County. The homes closed escrow this month but at selling prices $145,000 to $175,000 less than what owners had listed as the asking price. In one case, a home listed for $775,000 with similar amenities to one nearby that sold in late 2005 for $10,000 more ended up closing escrow at $600,000.

The market from top to bottom is being hit by what Realtors are referring to as a "dumping" of homes by owners who are trying to avoid huge jumps in their monthly loan payments created by a frenzy of zero down, sub-prime balloon-style loans that were made two to three years ago. The buyers accessing sub-prime loans were gambling home prices would continue climbing so they could refinance or sell before monthly payments climbed by upwards of $1,000 depending upon the loan.

Manteca now has 523 resale homes available with 75 sold so far this year. Compare that to last year at the same time when there were 381 active listings with 134 sold as of the third week of March. The difference is even starker from the week of March 22, 2005. There were just 78 available resale homes in Manteca with 149 sold in 2005 by mid-March.

"I think it is going to take two to five years for this to completely shake out the market," said Steve Roland of The Real Estate Group.