Friday, January 13, 2006
Sacramento New Home Sales 'Plunge' 57%
thehousingbubble2.blogspot.com
The Sacramento Bee reports on the bursting bubble in new homes. "Sales of new homes in the Sacramento region plunged 57 percent in the last three months of 2005, forcing builders to offer buyers sweeter deals. In some cases, builders are simply lowering their prices. For example, KB Home, one of the region's largest builders, recently cut prices on many homes 3 to 5 percent to stoke sales, said Jefferey Fautt."
"The 1,569 new homes that sold during last year's fourth quarter marked the lowest total for any quarter since late 1999. The sales were in Sacramento, Placer, El Dorado, Yolo, Yuba and Sutter counties."
"Increasingly, consumers are realizing the market pendulum has swung in their favor, and they're out looking for deals. David and Darlene Hillsman of Natomas were scouting a KB Home subdivision called Westbury in Natomas on behalf of their 35-year-old daughter, who lives in Sunnyvale. 'Now is the time to buy,' said Darlene Hillsman, adding that she and her husband are pushing for their daughter to move her family to Sacramento."
"Craig and Kristina Meadows benefited from the slower market in November by taking advantage of $38,000 worth of incentives their builder, Morrison Homes, gave them on their $588,000, 3,700-square-foot home in Lincoln. Craig Meadows said they received $30,000 off the base price in exchange for using the builder's designated lender. In addition, he said, the builder reduced the price another $8,000 to compensate for two years of Mello-Roos fees the Meadows would have otherwise had to pay to cover the cost of streets, sewers and other infrastructure in their neighborhood."
"Economist Chris Thornberg of UCLA's Anderson Forecast said the Sacramento region's 57 percent decline in sales during the fourth quarter 'sounds too dramatic to me to be realistic.' Thornberg's surprise at the extent of Sacramento's slowdown is telling: For two years he's had one of the more negative outlooks on housing among the state's economists. He characterizes California housing as being in a 'bubble' that will eventually deflate with a severe decline in sales."
"Sacramento economist Robert Fountain said..the over-$600,000 market has been saturated and builders will respond with more lower-cost units, packed more to the acre. In the fourth quarter, 26 percent of the six-county region's 254 housing projects were selling condos or detached homes on lots smaller than 4,000 square feet. A year earlier such high-density housing made up just 8 percent of the projects." |
