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BUILDER UNLOADING HOMES AT AUCTION
Starting bids for West Sac townhomes set at $146,000 below original asking price. Rather than drop prices to entice buyers in less time, John Leonard slashed prices on 22 new homes he built in West Sacramento to sell them in a day -- he hopes in less than an hour. Leonard is owner of Leonard Development Co. Inc. of Sacramento, and he's hired a public auction company to sell homes in his River's Side at Washington Square project quickly. He's not being forced to sell. The project is still current with its loans. But people simply are not buying them. "There isn't permission for people to buy a house. People's peers, parents and family won't let them feel good about buying. Everyone says, 'Wait a little longer and the prices will come down,' " Leonard said. "The carry cost on the project is not insignificant. We decided on the auction to expedite the sales." Leonard worked on the River's Side at Washington Square project for 30 months. He assembled the land, got entitlements, negotiated with the city, mapped the development, installed infrastructure and had 25 homes built. He started selling them last fall, while most were under construction. He has sold only three, and the other 22 have just sat. The project will be completed in the next few weeks. Hundreds of people have toured the homes, but no one is willing to pull the trigger and buy one. Leonard chose to go the auction route to force the issue. "I wanted to take an aggressive approach to make people come out of the woodwork," he said. "I built a good product. I just want to do the right thing. I'm going to pay the bank back and move on." Leonard says his timing to market just came too late. If he were selling the same project two years ago, he would have sold them all while they were under construction. "The housing market turning put me in a tight spot. That is the risk of doing development work," he said. "I'm proud of the project. I just wish I wasn't where I am in it. It came out as good or better than I thought it could." The auction company, Real Estate Disposition Corp. of Irvine, set the prices with the lowest at $259,000. The homes are around 1,600 square feet each. Info From Sacramento Business Journal August 31, 2007 |
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Real estate speculators drove prices up in some
of
the hottest markets during the boom. Now they're
making foreclosures jump.
Flippers and other speculators investing in single- family homes helped drive up prices in many hot housing markets during the boom. Now they're contributing heavily to mortgage delinquencies in several of those markets. Defaults in non-owner occupied houses are driving defaults in four of the states with the fastest rising default rates in the nation, according to a report released Thursday by the Mortgage Bankers Association. "Defaults are on the rise in most parts of the country, but...it is not always the case of a homeowner losing his or her home," Doug Duncan, the MBA's chief economist, said in a statement, "but [it's] often the case of an investor gambling on a continued increase in home values and losing that gamble." Several sun-belt states were magnets for real estate speculators during the home-price boom. Coastal California led the early charge, but as prices there raced ahead of affordability, many investors abandoned those markets for Central Valley cities as well as Las Vegas, Phoenix and other Arizona towns. Florida drew droves of investors from the Northeast, who spurred a rash of condo development in Miami, Ft. Lauderdale and other coastal towns. Single family home prices were also driven up in towns all over the Sunshine State. "California, Nevada, Arizona and Florida were among the states with the fastest home price appreciation over the last five years. This...attracted both speculators and home builders, a volatile combination that led to an over-supply of homes that was beyond the capacity of the local populations to support," Duncan said. "When this over-supply became apparent and prices began to fall, many of these investors simply walked away from their mortgages." In Nevada and Arizona, 29 percent of all the prime mortgage loans written in 2005 were for non-owner occupied home purchases. In California, it was 14 percent and in Florida, a whopping 32 percent, according to the MBA. Info From CNN Money August 30, 2007 |
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FOR A FREE MARKET ANALYSIS OF YOUR HOME AND ESTIMATE OF VALUE CALL OR EMAIL ME! I WILL GET YOU THE INFO WITHIN 24 HOURS OF YOUR REQUEST. Please contact me with all of your real estate needs and questions. I am always available to you, your family and friends!
Sincerely,
Kia Kapci
Lyon Real Estate
email:
kkapci@golyon.com
phone:
916-782-0558
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