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Sales of new homes plummet (40% decline for 3-month period is sharpest in 15 years)
sacbee.com ^ | November 16, 2005 | Andrew LePage

Posted on 11/17/2005 6:21:49 AM PST by 2banana

Sales of new homes plummet

The 40% decline for 3-month period is sharpest in 15 years.

Sales of new homes in the Sacramento region dropped 40 percent over the past three months compared with the same period last year, according to the local Building Industry Association.

It's the sharpest decline the group has seen for the August-October period since 1989-1990, when sales plunged nearly twice as much - 79 percent.

...

Cancellations of pending home sales have spiked in recent months because more buyers, including investors, either got cold feet, couldn't qualify for a loan or couldn't sell another property fast enough, industry sources reported. Also, some builders insist they're strictly enforcing the anti-speculator clause in their sales contracts and will cancel deals if they learn a buyer is an investor, not a primary resident. In addition, lenders are beginning to scrutinize loan applications more closely, meaning some marginally qualified borrowers now find it more difficult to use the most aggressive, riskiest forms of financing.

...

In stark contrast to the frenzied market of the past few years, many Sacramento-area builders are now forced to offer incentives worth tens of thousands of dollars to attract buyers - especially for nearly built homes where an initial buyer has canceled the deal.

Builders have been using these increasingly lucrative incentives, such as $50,000 toward upgrades on higher-end homes, in lieu of lowering prices.

(Excerpt) Read more at sacbee.com ...


TOPICS: Business/Economy; Extended News; US: California
KEYWORDS: bubble; housing; popping
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Hmmmm...cooling off, bubble popping, return to normalcy?
1 posted on 11/17/2005 6:21:50 AM PST by 2banana
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To: 2banana
Or regional adjustment
2 posted on 11/17/2005 6:23:31 AM PST by apackof2 (There are 2 theories to arguing with a woman... neither works. Will Rogers)
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To: 2banana

Sacramento. Houses in California are much costlier, and taxed to the hilt.


3 posted on 11/17/2005 6:23:46 AM PST by theDentist (The Dems have put all their eggs in one basket-case: Howard "Belltower" Dean.)
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To: 2banana
Admin, please change this headline to include:

in the Sacramento region

4 posted on 11/17/2005 6:24:45 AM PST by ChadGore (VISUALIZE 62,041,268 Bush fans.)
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To: 2banana

Exactly as I predicted. Now . . . check EXISTING HOME SALES after CHRISTMAS, when they will go up dramatically, because the price of an existing home relatively to building a new home will be much better.


5 posted on 11/17/2005 6:25:18 AM PST by LS
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To: ChadGore

this is happening in all the high cost areas, not just in sacramento. this news is avaiable in any business paper if one cares to find it.


6 posted on 11/17/2005 6:26:01 AM PST by son of caesar (son of caesar)
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To: 2banana
Bubble not popping.
Interest rates have climbed a bit.
The holidays are coming up.
The new homes MIGHT be where there are no shopping malls, freeways, gas stations, etc.
The new homes MIGHT be over-priced.

Bubble not popping....just readjusting to the local conditions.

An acquaintance of mine has a home in North Dakota....three bedroom, two bath. The home is worth $60,000. That same house in California would be triple the price, at least. In San Francisco, it would be one million. IN L.A. or Hawaii, London, Paris, MILLIONS.

Location, location, location.
Those new homes in Sacramento -- SOMETHING smells a little fishy. :o)

7 posted on 11/17/2005 6:28:17 AM PST by starfish923 ( It's never right to do wrong. Socrates)
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To: 2banana

"Also, some builders insist they're strictly enforcing the anti-speculator clause in their sales contracts and will cancel deals if they learn a buyer is an investor, not a primary resident"

ANTI-SPECULATOR CLAUSE? What the heck is that? Is it now illegal in in California to speculate on real estate? or own rental property? No wonder people and companies like Nissan are leaving there.


8 posted on 11/17/2005 6:29:02 AM PST by Long Distance Rider
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To: 2banana

9 posted on 11/17/2005 6:29:50 AM PST by HamiltonJay
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To: 2banana
... now find it more difficult to use the most aggressive, riskiest forms of financing.

Why now? Why stop offering these risky forms of financing now? If it was okay two months ago why not now?

10 posted on 11/17/2005 6:32:17 AM PST by raybbr
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To: 2banana
Friends of ours just sold their 2350 SQ FT home for 730,000... 10,000 over asking in Rocklin ( 25 miles E/O Sacramento). They are moving to eastern Kentucky.

Existing home sales are down just a little here.

11 posted on 11/17/2005 6:32:45 AM PST by afnamvet
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To: 2banana; ex-Texan

Probably a regional thing, but this should be interesting to you.


12 posted on 11/17/2005 6:35:21 AM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: 2banana

Sacramento.

Not exactly a good barometer for the rest of the country.


13 posted on 11/17/2005 6:35:39 AM PST by rightinthemiddle (#1 Rule in Dealing with the Media, Democrats and Terrorists: Can't Please 'Em, so Don't Appease 'Em.)
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To: 2banana

Sales of new homes in the Sacramento are falling, which is a testament to how liberal government fails democracy.


14 posted on 11/17/2005 6:37:21 AM PST by street_lawyer
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To: HamiltonJay

Funny... Nationally sales were up sharply, and prices were up by an obscene amount.


15 posted on 11/17/2005 6:37:31 AM PST by dangus
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To: afnamvet

They can buy eastern Kentucky with that much money.


16 posted on 11/17/2005 6:38:05 AM PST by Moonman62 (Federal creed: If it moves tax it. If it keeps moving regulate it. If it stops moving subsidize it)
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To: 2banana
Man, I wish that bubble would hurry up and pop! I looked at 2bdrm, 2bathroom pre-existing condos in Fairfax last weekend. The price is still $350K. The new ones are $450K to $500. Whatever is happening in Sactown needs to hurry up and spread so that the rest of us can afford a roof over our heads.
17 posted on 11/17/2005 6:38:31 AM PST by .cnI redruM (Sticking a microphone in front of (Terrell) Owens is like giving a crackhead a spoonful.)
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To: 2banana

With housing costs at about $500/sq ft in California, I cannot imagine why.</dry sarcasm>


18 posted on 11/17/2005 6:38:41 AM PST by Blood of Tyrants (G-d is not a Republican. But Satan is definitely a Democrat.)
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To: ChadGore; Admin Moderator

>> Admin, please change this headline to include:
in the Sacramento region <<

I'll second this request. No need to start false rumors, since nationally home sales were up sharply and prices were up obscenely


19 posted on 11/17/2005 6:39:05 AM PST by dangus
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To: starfish923

Same thing here in NE PA. My house in Putnam County NY is 1/2 million. Bi-levels that are 30 years old? Ok mine is only 13 years old. I will never be able to afford to move back to NY, unless I win lotto.


20 posted on 11/17/2005 6:41:47 AM PST by angcat
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