Sacramento real estate, Sacramento new homes for sale in California CA

Single Family in Sacramento, CA asking $280,000
Sacramento, CA 95829 1346 sq. ft., 3 bedrooms, 2.5 bathrooms, 1 photo(s)
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Single Family in Sacramento, CA asking $429,000
4409 Briarwood Drive Sacramento, CA 95821 2057 sq. ft., 3 bedrooms, 2 bathrooms, 5 photo(s)
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Single Family in Sacramento, CA asking $239,000
200 Clevland Ave Sacramento, CA 95833 1337 sq. ft., 3 bedrooms, 2 bathrooms, 6 photo(s)
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Single Family in Sacramento, CA asking $248,990
Sacramento, CA 95835 1653 sq. ft., 3 bedrooms, 2.5 bathrooms, 2 photo(s)
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Single Family in Sacramento, CA asking $158,990
Sacramento, CA 95823 1005 sq. ft., 3 bedrooms, 2 bathrooms, 2 photo(s)
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Single Family in Sacramento, CA asking $450,000
Sacramento, CA 95835 2973 sq. ft., 4 bedrooms, 3.5 bathrooms, 3 photo(s)
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Single Family in Sacramento, CA asking $359,990
Sacramento, CA 95829 2054 sq. ft., 3 bedrooms, 2.5 bathrooms, 2 photo(s)
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Single Family in Sacramento, CA asking $429,000
748 Portugal Way Sacramento, CA 95831 1774 sq. ft., 3 bedrooms, 2 bathrooms, 6 photo(s)
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Single Family in Sacramento, CA asking $599,000
3427 E. Country Club Ln Sacramento, CA 95821 2150 sq. ft., 3 bedrooms, 2 bathrooms, 6 photo(s)
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Single Family in Sacramento, CA asking $310,000
4947 Winamac Drive Sacramento, CA 95835 1645 sq. ft., 3 bedrooms, 2 bathrooms, 2 photo(s)
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Home prices, sales plummet at Lake Tahoe

Even Lake Tahoe's million-dollar homes are finally feeling the real estate slump.

Average home prices in the Sierra resort fell 26 percent during 2008, to $1,018,085, according to the Nevada-based real estate firm Chase International.

Lake Tahoe-area home sales were down 16 percent from 2007, with 693 sales reported.

Incline Village had the largest price and sales volume declines in 2008, Chase reported. Sales volume was down 53 percent from 2007, while average home prices fell 20 percent to $1,296,494.

Chase reported Lake Tahoe homes priced above $1 million saw sales fall 43 percent from 2007 and "continue to take the biggest hit."

The Truckee area, however, saw an 11 percent rise over 2007 in sales of homes priced $1 million or more, the firm said.

– Jim Wasserman

Posted: Wed, 07 Jan 2009 00:00:00 PST

New house in Folsom rated one of greenest in U.S.

This new 1,940-square-foot home on Mormon Street near Folsom's historic downtown received the top environmental design designation from the U.S. Green Building Council in Washington, D.C.

It began as a one-of-a-kind house, a partnership between the Sacramento Municipal Utility District and a Folsom home builder, to test the newest green-building techniques.

It turned into one of the greenest, most energy-efficient homes built in the United States.

Tuesday, SMUD announced that a new 1,940-square-foot Mormon Street House near Folsom's historic downtown received a Leadership in Energy and Environmental Design (LEED) Platinum designation from the U.S. Green Building Council in Washington, D.C. The Davis-based Davis Energy Group inspects and verifies materials and practices that lead to the certification.

The highest honor in green home building, the designation is thought to be the third for a new house in California and first in the capital region. The other two are in Santa Monica and the Oakland Hills.

The honor comes weeks after industry flagship Green Builder Magazine picked the Folsom house above 56 others for its December cover, dubbing it 2008's "Green Home of the Year."

SMUD, which has subsidized area builders to install solar systems, calls the experimental Folsom home a new step toward "zero energy" housing that is a state goal for 2020. The utility estimates the home's energy bills will be about $24 monthly, compared with $140 a month for homes built to current new-home standards.

As a bonus for Folsom custom home builder Robert Walter, the home with its 720-square-foot guesthouse in the backyard, has an El Dorado Hills buyer in escrow for $625,000.

The two-story main house is styled as a 1920s Craftsman to blend into an old Folsom neighborhood.

"I've been doing this since 1991, and there are few homes I felt the way I did about the Mormon Street home," said El Dorado Hills real estate agent Jane Layton. "I would have loved to live there," she said after showing the house in recent months to hundreds of curiosity seekers, advocates of green building and would-be buyers.

Inside the home are recycled glass countertops and oak cabinets from sustainable forests. Thicker support beams allow less wood and more space for the newest style of insulation, the spray-in or blow-in cellulose and foams that better keep out heat and cold.

Walter said he's told by the city of Folsom the house will use half the water of a normal home with its special landscaping and high-efficiency toilets, shower heads and faucets.

The platinum designation, which tops other less stringent LEED categories of silver and gold, reflects how efficiently the house was built.

"We recycled just about everything that came off that job," said the builder, who spent years as a corporate home builder in the region before beginning to build solar homes, a desire he had harbored since graduating from college in 1982. The Folsom home has a solar unit twice the normal wattage, said SMUD, which spent $70,000 to help Walter build the house to specifications suggested by Boston-based consultant Building Science Corp.

"That was the purpose of this house – to try some of these things, examine them and see what issues you run into when you actually build them," said Mike Keesee, SMUD's project manager in customer research and development. "We're trying to take some of the lessons learned and put them into the commercial market, and into existing homes as well," he said.

What's next? Walter said he is already retrofitting two homes in Sacramento using some of the same methods from the Folsom house. Another couple plans to build a similar house in Rocklin this year, he said.

Keesee said SMUD is partnering with Sacramento architect John Packowski to build another LEED Platinum house in Sacramento.

"We're also going to try to do this on a retrofit basis as well," Keesee said.

Builder Robert Walter collaborated with SMUD on the house that is viewed as a step toward "zero energy" housing. Energy use is expected to cost $24 a month, compared with $140 for a typical new home.

Posted: Wed, 07 Jan 2009 00:00:00 PST

Lots of new faces on list of area's top 10 lenders

Over the past two years, Wells Fargo Bank and Bank of America have remained the top two mortgage lenders in the Sacramento region but much of the rest of the market has been upended, according to La Jolla-based research firm MDA DataQuick.

Of the rest of the region's top 10 lenders in 2006, only one – JP Morgan Chase – remained on the list in 2008. The information is from data from August, September and October in both periods.

Home lending – including purchases, refinancing and equity loans – dropped 65 percent over the two-year period. From August to October 2006, loans totaled $9.8 billion. That dropped to $5 billion during the same period in 2007 and $3.4 billion in 2008.

Most of the region's big lenders – including Wells Fargo and Bank of America – did far less business in 2008 than in 2006. But a few, including Sacramento-based Vitek Mortgage Group Inc., issued more loans even as the real estate market crashed and home equity dried up.

Vitek increased its lending 84 percent over 2007 by focusing on lending to homebuyers through government-backed programs that have remained solvent, said Harry Duncan, the company's president.

Vitek made $86.4 million in loans in El Dorado, Placer, Sacramento and Yolo counties from August to October of 2008, making it the region's seventh-largest lender.

– Jim Downing

Posted: Sat, 03 Jan 2009 00:00:00 PST

Home Front: Sacramento-area real estate market befuddled the experts

So begins a new year in the Sacramento real estate market, remarkably making its case as the fourth straight year of a downturn.

A slump that began with nervous whispers in the summer of 2005 has escalated into a prolonged economic crisis that promises to define 2009.

Home Front spent time in the electronic library this week, looking at how experts misjudged the extent of this decline as the housing market began to wobble and shift in 2005 and 2006, even 2007.

We aren't trying to pick on analysts who were then swimming in uncharted waters after a long, euphoric boom. The Bee's real estate coverage, too, had its overly sunny moments.

That said, we're now 3 1/2 years into this painful reversal of fortune. From the files, here are memories of what the pros said as the market started – slowly at first, then faster and faster – to fall back to earth.

• October 2005. As housing values had already started to roll back down the hill, a National Association of Realtors report pronounced Sacramento's real estate market in "excellent shape with a potential for significant equity gains."

What happened: In a year, median sales prices fell 8 percent in Sacramento County.

• July 2006: "The evidence of a cool-down is everywhere, but I don't think there's evidence of a collapse. I think barring any major macroeconomic shock, like a real spike in interest rates or unemployment, things are going to remain pretty flat."

– Sean Snaith, then director of the Business Forecasting Center at Stockton's University of the Pacific

What happened: The next year in Sacramento County, home sales fell 23 percent and prices fell 10 percent.

• September 2006: "It's not pleasant, but in proportion of the economy it's one-third as big as the S&L losses in the 1990s."

– Chris Cagan, then director of Research at First American Real Estate Solutions, predicting $110 billion in U.S. foreclosure losses across five years

What happened: The International Monetary Fund pegged U.S. losses at $565 billion earlier this year. Then, taxpayers put up $700 billion in Wall Street bailout funds. The S&L crisis cost taxpayers $124 billion, according to the U.S. General Accounting Office.

• October 2006: "I think by next spring the residential market will reach a plateau. … If my scenario holds up, you may be under water 10 percent for a while. I don't know if you'd call it a soft landing, maybe slightly hard, or hard light or something, but you'll still be fine."

– Richard Kovacevich, then chairman and CEO of Wells Fargo & Co., in a Bee interview

What happened: Sacramento County median sales prices fell another $24,500 by June. In July, year-over-year depreciation went into double-digit percentages and has accelerated ever since.

• November 2006: "It's not like we're seeing a huge erosion in home prices, and really do not expect to see that going forward."

– Robert Kleinhenz, deputy chief economist, California Association of Realtors, giving a 2007 real estate forecast to Sacramento Realtors

What happened: In 2007, Sacramento County sales prices fell 20 percent. In 2008, they've fallen again by a third.

• January 2007: "We don't expect any significant decline unless there's some major economic shock, and we don't anticipate that."

– Alan Nevin, chief economist, California Building Industry Association, unveiling his 2007 forecast

What happened: In 2007, California's new-home sales fell 31 percent. This year, they fell almost twice that much.

• January 2007: "I agree the foreclosures will be a fact of life moving forward and will play some role. But I don't think that, in itself, it can move the (real estate) market as significantly as in the 1990s. The reason is the economy in California is on much firmer ground than we were in the '90s."

– Keitaro Matsuda, senior economist, Union Bank of California

What happened: Within 21 months of those words, California recorded 274,374 foreclosures, moving the real estate market to one dominated by bank repos. Statewide, median sales prices have plunged 41 percent the past year, according to the California Association of Realtors. Unemployment is the highest since 1994.

• June 2007: "I think right now, we're probably bouncing around the bottom."

– Sid Dunmore, then chief executive officer of Granite Bay-based Dunmore Homes

What happened: Five months later, Dunmore Homes filed for bankruptcy protection.

• March 2008: "I think California has maybe two more quarters of tough sledding and things are going to get better. … It's just a 36-year gut feeling kind of thing."

– John Robbins, a San Diego mortgage banker, and 2007 chairman of the Mortgage Bankers Association

What happened: That was three quarters ago.

So, who wants to predict 2009? Will those Alt-A loans be the next wave of foreclosures? Will the Sacramento County median price touch $165,000? Who's next to go bankrupt? When does it turn?

Such questions come as we continue the fourth year of a once-unthinkable downturn. Here's to new challenges and opportunities, to the 2009 real estate story soon to unfold.

Posted: Fri, 02 Jan 2009 00:00:00 PST

30-year mortgages hit 5.1%, lowest since '71

Thirty-year mortgage rates have dipped to their lowest levels in nearly 40 years, falling for a ninth straight week to a base rate of 5.10 percent, federal mortgage giant Freddie Mac said Wednesday.

The firm said this week's average is the lowest since it began keeping track in 1971.

Last week, rates for the 30-year fixed-rate benchmark loan averaged 5.14 percent.

"Since the end of October of this year, these rates have declined by about 1 1/3 percentage points, or payment savings of approximately $173 a month for a $200,000 loan," said Frank Nothaft, chief economist at Freddie Mac, in a statement Wednesday.

The financial Web site, Bankrate.com, reported slightly higher overnight rates Wednesday. It showed average 30-year fixed rates at 5.25 percent in California and 5.30 percent nationally.

– Jim Wasserman

Posted: Thu, 01 Jan 2009 00:00:00 PST

Capital region gets low-income housing grants

Low-income residents in Placer County and many other parts of California will have new opportunities early next year to buy their first home or rehabilitate their house.

Help will come from more than $50 million in housing grants statewide, officials said Tuesday.

The grants use federal funds dispensed through the state Department of Housing and Community Development's HOME program.

They include $800,000 each for the counties of Placer, El Dorado, Amador, Nevada, Tehama and Glenn.

The cities of Roseville, South Lake Tahoe, Ione, Red Bluff and Live Oak (Sutter County) also received $800,000 each.

Chris Westlake, deputy director of the state housing department, said HOME grants go to smaller cities and counties that don't receive direct allocations from the U.S. Department of Housing and Urban Development.

Because they come from federal funds, Westlake said, the grants are not affected by the recent freeze on California Housing Finance Agency funds that was prompted by the state's budget crisis.

Joanne Auerbach, housing coordinator for the Placer County Redevelopment Agency, said $600,000 of the Placer grant will assist first-time home buyers.

Low-income households are those who earn no more than 80 percent of the area's median income.

For a four-person household in Placer, that limit now is $56,800.

Some homebuyer assistance money also is available now through Placer's current CalHOME program.

Potential buyers can apply immediately or register with the redevelopment agency to be notified when the additional money becomes available in the spring.

To qualify for Placer's home-purchase program, applicants must be first-time buyers.

They also must be preapproved for a first mortgage loan; complete eight hours of homebuyer classes through the local home loan counseling center; and have at least 3 percent of the total purchase price available for the down payment.

Through the program, the county provides a 30-year, second-mortgage loan of up to $36,650 that is not due and payable until a home is sold or transferred, or no longer owner-occupied.

Posted: Wed, 31 Dec 2008 00:00:00 PST

Low-income homeowners can apply for free repairs

Low-income homeowners in the Colonial Heights neighborhood are eligible for free repairs and home improvements this spring.

Volunteers for the nonprofit Rebuilding Dreams, along with the Sacramento Housing and Redevelopment Agency, will repair and improve 15 eligible houses on "Spring Rebuilding Day" in April.

So far, only 12 homeowners from the neighborhood off Stockton Boulevard have applied, said program manager Cindy Slagter.

Anyone interested in finding out if their home is eligible should call (916) 455-1880 and ask for an application.

Homeowners also can apply online at www.rebuildingtogethersacramento.org and clicking on Rebuild Days. A third option is picking up a "pre-application" at the following locations:

• Colonial Heights Library, 4799 Stockton Blvd.

• La Familia Counseling Center, 5523 34th St.

• Mark Twain Elementary School, 4914 58th Ave.

• Stockton Boulevard Partnership Office, 5625 Stockton Blvd.

• Tahoe Colonial Family Resource Center, 5959 Eighth Ave.

– Cynthia Hubert

Posted: Wed, 31 Dec 2008 00:00:00 PST

Commercial real estate broker scrambles in depressed economy

Boyd Cahill has been in the real estate business for 35 years. Lately business has been difficult, but he sees reason to persevere. "Good brokers can make money," said Cahill, of TRI Commercial in Roseville. "People still want to do deals, and now they really need you. Some are at risk of losing their property."

Second in a four-part series.

A drive to Chico would have been unthinkable a year ago. Boyd Cahill would have been too busy, the deal too small, the time too precious.

That was before the banks failed, credit markets seized up, the stock market had a nervous breakdown and some of Northern California's biggest retailers went bankrupt.

Now retail commercial real estate brokers such as Cahill are working harder for their commissions. There are fewer tenants and more empty stores. Jittery lenders are squeezing nervous landlords. The landlords, drowning in a deepening pool of empty space, want new tenants. Now.

"The phones haven't been ringing like they used to. There just aren't a lot of tenants looking for space," Cahill said last week as he drove from his TRI Commercial office in Roseville to show a soon-to-close McMahan's Furniture store in Chico. "So you have to get out of the office more and work smarter and a little harder."

Commercial real estate is in trouble. The industry figures that about $530 billion in commercial mortgages will need refinancing within three years. Meanwhile, the credit markets have come to a standstill and commercial rents are down.

Brokers such as Cahill are suffering along with their clients. For a while, they were uneasily holding ground while colleagues in residential real estate were seeing their livelihoods melt away as home sales plummeted.

Then the bad economy got drastically worse and the commercial business crashed. The industry's biggest player is in trouble. Cahill and others believe next year won't be much better. That will cost many brokers their jobs.

"A lot of people are going to leave the business," said Carlton Lowen, a longtime Chico real estate broker. "The new folks will be the first to go. They're not patient. In this market, you need patience."

Earlier this month some of the nation's biggest property developers warned that thousands of office complexes, hotels and shopping centers face bankruptcy and foreclosure. The industry wants the federal government to include it in a program created to salvage car loans and student debt.

Northern California's retail real estate – the bedrock of Cahill's 36-year career – is a small link in that taut economic chain.

"Making sure that a buyer can qualify for a loan has become my No. 1 priority," Cahill said during his drive to Chico. "You have to know that the person you're dealing with has the wherewithal to make a deal. Sometimes, especially in this economy, the best thing to do is to tell them not to go ahead."

Cahill decided to make the Chico drive after talking with a potential buyer on the phone: "When the guy told me he'd already talked to his bank, I knew he was serious."

The 40-year-old McMahan's store on Cohasset Road in Chico lists for $1.9 million. "Going out of business" signs festooned the building's front. It's closing next month.

Many retailers are following a similar course.

Department store chain Mervyn's LLC and KB Toys are using the holiday shopping season to go out of business. Linens 'n Things shut down earlier. Their closures and others will add hundreds of thousands of vacant square feet to the Sacramento area's inventory. The space won't be easy to lease.

Locally, Colliers International says that about 4 million square feet of leasable store space – roughly equal to four Arden Fair malls – was vacant in November. That's about 8.8 percent of the total retail space in the area and a 1.2 percentage point jump from the third quarter of this year.

The rate would be higher, experts say, but landlords are cutting prices to help out struggling tenants. Prime spaces that once leased for up to $3.50 per square foot have come down to $3, according to a November report from Colliers International.

This holiday season's lousy retail sales numbers indicate more trouble ahead.

"But you know, good brokers can make money," Cahill said. "People still want to do deals, and now they really need you. Some are at risk of losing their property."

Commercial real estate brokers earn commissions of around 6 percent by selling their time and their knowledge. They use those two things to put together buyers and sellers, landlords and tenants, builders and land owners. No deal, no dough.

Cahill's knowledge runs deep from a 36-year career in local retail real estate.

After graduating from the University of Santa Clara in 1965, Cahill joined the Navy and flew surveillance missions in Vietnam. He joined the Sacramento office of CB Richard Ellis Inc. in 1972.

A decade later Cahill established his own firm, then sold it. He's had a hand in hundreds of deals from Sacramento to the Oregon border involving small proprietors and huge chains. His clients included McDonald's Corp., Target Corp., Office Depot Inc. and WinCo Foods Inc.

But the deals, big or small, are fewer and farther apart now. "There's no more shrimp on the plate," Cahill said. "It's down to the radishes now."

A couple of years ago he was feasting on shrimp. Cahill usually had 30 deals in various stages as retail echoed the housing boom. The business practically came to him.

Then the economy tightened. So did his business.

"When things get tough, it might get down to five or 10 deals cooking. That means your 'kill ratio' has to be better," he said, referring to the percentage of transactions that a broker closes.

Good brokers with relatively little experience have a 30 percent to 50 percent kill ratio, Cahill said. Experienced brokers close 60 percent to 80 percent. "These days, because you're doing fewer deals, you'd better be hitting the high end of your range," he said.

Cahill arrived in Chico around 10 a.m.

He walked the potential buyer through McMahan's sparsely stocked showroom and empty warehouse space. They surveyed the lot.

The buyer had questions about everything – on the easements and traffic patterns, on the building's wiring, on whether the roof leaks.

Cahill steered the conversation back to whether the buyer could get cash to do the deal and had a business model that would succeed in the space.

The meeting ended an hour later. Cahill's assessment: "That guy is for real. I'm glad I came up to meet him."

A commission check could be months off. Lenders used to dole out money based on drive-by "windshield appraisals." Now they want detailed evaluations of properties and business plans before they'll let go of their cash. Closing escrow takes more time.

"Not long ago you could move a property in 90 to 120 days," Cahill said as he drove through Yuba City. "Now you can go six months, a year."

As "the toughest year" of his career closes, Cahill said the first half of 2009 doesn't look much better.

He thinks more retailers will file for bankruptcy protection, adding to vacancies and making it even more competitive to land the few tenants looking for space.

The shakeout will strike commercial brokerage firms, too, Cahill said. His company just closed its Sacramento office and pulled staff to Roseville. CB Richard Ellis, the world's largest commercial real estate company, has seen its stock price fall 75 percent within the past year.

Some firms demand a bigger cut of the commission brokers earn. Some charge for marketing materials and research information.

Outside the office, clients want more accountability, Cahill said, and they're quicker to switch representatives if they don't see progress.

"(Brokers) have to perform," he said as he neared Roseville. "A landlord getting yelled at by his bank needs to have a program to present to the lender. There's no time to fool around."

It was after 3 p.m. when Cahill returned to his office. He wrote notes on his Chico presentation and called the building's owner with an update.

Then he started working the phones for other leads.

Posted: Mon, 29 Dec 2008 00:00:00 PST

Experts debate role of housing in Sacramento economy's recovery

Randy Burford helps build the frame of a prefabricated modular home ealier this month at the Details warehouse in North Highlands. Some experts think the construction and housing markets, which have been at the heart of the economic downturn, are poised to spur a recovery.

First in a four-part series.

Six months ago, with the economy on the skids, Mark Wintz and Bruce Evans made an expensive bet on economic recovery. They moved to Sacramento to open a home building venture at McClellan Park.

"We looked at the West Coast and decided Sacramento was the best location," said Wintz, a custom builder from Ventura. "It's on the 80 and the 5, with access to the Bay Area and the Sierra, up and down the Valley and access to Oregon and Washington."

It was a leap of faith. Most builders called 2008 the worst year of their professional lives.

But Wintz and Evans have an angle that hints at better days to come in real estate. They believe central cities will be the West's first markets to roar back. When that happens, Details, their McClellan prefab home factory with thousands of square feet of expansion space, will supply a new generation of urban infill housing.

"We wanted to enter near the bottom and be prepared for an emerging market, one that you can grow with," said Wintz.

On the surface, this startup seems a reassuring signal from a battered business world that this, too, will pass. These are some of the darkest economic days in generations, yet Wintz's and Evans' $4 million investment points to a key element that some say may lead to an eventual recovery: a resurgent real estate market, the same real estate market that sent the economy into a deep tailspin.

"One bright note is that the (housing) sector that led the economy into this morass is about to turn the corner, perhaps as soon as this summer, and will start to lead us out," said Scott Anderson, senior economist at Wells Fargo & Co.

It's still too early to declare real estate's revival. And others will argue forcefully that consumer debt, the collapse of esoteric global financial instruments and the abrupt and almost unprecedented freezing of credit have created an immense disaster far beyond real estate's reach.

But 2008 could also be seen as the year Sacramento-area real estate began to show signs of stabilizing, and the idea that housing might help establish a foundation for the economy here is something experts are starting to debate. Prices and inventory are down and sales are up, even as foreclosures continue. Mortgage rates have fallen to their lowest levels in at least 37 years. The correction has been enormously painful, but there are believers who contend Sacramento will be among the first U.S. markets to recover.

• Supply is down. It would take 3.9 months to sell today's nearly 11,000 listings in Sacramento County and West Sacramento. A year ago: 12.2 months.

• Sales are up. After 37 months of declines in the region, something new began in April: eight months of year-over-year sales gains. Prices better match area salaries.

• Conservative lending and safe loans are back. Nine in 10 California mortgages this year had fixed rates, according to the California Association of Realtors. At the height of the boom, two-thirds of all new mortgages in California were loans with adjustable rates. The new lending portends a stable base of homeowners.

But not even the most optimistic forecasters see housing as the ultimate solution to all that's wrong with the local, state or national economies. We're beyond the point when a single sector – even one so pivotal as home sales – can alone propel the financial sector to new heights.

• American households have lost $10 trillion in the collapse of the stock market and the plunge in home values, according to Merrill Lynch economist Sheryl King.

• More than 2 million people nationwide have lost their jobs this year, and many of those still working are fearful and cutting their spending. November unemployment in the Sacramento region reached a 15-year high at 8.1 percent; California's tops out at 8.4 percent.

• Banks have dampened the economy by not lending. Until lately, they've been slow to modify mortgages, enabling foreclosures that kicked the economy into a tailspin.

• State government – Sacramento's lead employer – is paralyzed by estimates of about $40 billion in deficits through June 2010. Tax revenue of all sorts – income, sales and property – has crashed. The governor is proposing furloughs and layoffs of state employees.

In this fog of dire news, it is hard sometimes to remember that real estate once drove a booming economy, here and across the country. Yet that boom is also how we got here.

Real estate propelled a spectacular wealth effect with housing values soaring in the first half of this decade. Cheap, easy financing created an area buying frenzy of 75,738 home sales in 2004 – nearly twice the number sold this year.

The real estate boom fueled jobs and population growth, driving home prices higher. The higher they went – the median more than doubled in the region between 2001 and 2006 – the richer people felt. They borrowed and spent, a phenomenon that accounts for 70 percent of the economy, according to experts. In El Dorado, Placer, Sacramento and Yolo counties, people tapped $22 billion in home equity loans and lines of credit from 2002 to 2005 – a bonanza of cash for pools, patios, vacations, motorcycles, cars, boats and more, according to La Jolla-based researcher MDA DataQuick.

Investment portfolios also swelled. A little more than a year ago, on Oct. 9, 2007, the Dow Jones industrial average touched 14,164, a record.

But 14 months is a long time. On Friday, the Dow closed at 8,515.55. Now home equity loans are rare. Many homes in Sacramento County are worth half as much as they were in 2005.

For better or worse, real estate's imprint on the economy for worse couldn't be clearer. What once drove consumer confidence has shattered it. Its role in restoring the faith is open to debate.

Neither Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast, nor Chris Thornberg, head of Beacon Economics in Los Angeles, is betting on home sales doing the trick.

Nickelsburg said he thinks the Barack Obama administration will be key to consumer confidence, fueling the public's belief that it's OK to start spending again.

"History tells us consumers don't stay out too long," he said. "But we do need to have some feeling that our economic leaders know what they're doing."

Thornberg said the country should be ready for a prolonged downturn.

"What's going to fix this problem? How is this economy going to recover? Who is going to be the miracle worker? There is none," he said. "It's just a matter of working through this period.

Americans "need to tighten up, batten down the hatches and start saving again. It's that situation that's going to keep the economy in a bad situation for a year or more," he said.

Jeff Michael, director of business forecasting at Stockton's University of the Pacific, said the economy's troubles are now well beyond housing's woes. Earlier this month, he predicted California will lose 300,000 jobs in 2009 – after losing 100,000 this year.

But he does believe that "real estate stabilizing is a precondition to the financial markets stabilizing and credit flowing again." And home prices in the region will stabilize over the next year, Michael said.

In the meantime, he thinks lower mortgage rates – he recently refinanced – and cheaper fuel – he lives in Elk Grove and commutes – will be a key part of any recovery. Michael said the fall of both has put an extra $400 a month in his family's pockets.

"That frees up our budget a little to do other things. Go out to eat," he said. "And we're not the only ones."

Daniel and Kathleen Alcantaro hope Michael is right. This year the pair invested $100,000 in Buonarroti Ristorante, a new eatery at Town and Country Shopping Center on Fulton and Marconi avenues. It opened in October as the economy swooned.

"There was nothing we could do; we already had said we were going to open it," said Daniel Alcantaro.

The restaurant is their second. Five years ago they opened a place in downtown Lincoln, and then in September they placed another bet on better days by adding a wine bar.

"I'm a bit of an optimist," said Kathleen Alcantaro. "I think people are looking for ways to escape. … From our perspective, people are going to want to go out to eat. … If we can hang tough, I think the strong will survive."

At Details in McClellan Park, Wintz's view is that confidence in real estate has started to grow.

"Surprisingly, in the last 30 days we've had a handful of clients show interest, and a few who were on the sidelines make preparations to move forward in the first quarter," he said.

Partly, that's due to upscale clients. Since opening, the company has built and trucked homes to Shasta County, Lake Tahoe and Silicon Valley for executives and surgeons with income for extras like $10,000 German-built doors.

So Wintz is counting on the second quarter of 2009 to offset overhead expenses – and more.

"That will be a milestone for us, and, in my opinion, a marker of an initial regional recovery as well," he said.

Mark Wintz says he and his partner, Bruce Evans, want to prepare their Details home building venture at McClellan Park for "an emerging market, one that you can grow with." They expect a 2009 recovery.

Posted: Sun, 28 Dec 2008 00:00:00 PST

Home Front: Advice to walk away from loan draws fire

No apologies, says Ruben Ramos, owner of a Marysville real estate office.

"If people don't think it's a reality, they better wake up."

Ramos got attention in real estate circles this week after explaining in Sunday's Bee how he encourages troubled borrowers to walk away from their homes.

His comments – during a real estate round table with three other panelists – went off like a bomb in an industry that constantly tells people to hang in and try to save their homes. In real estate, "walkaways" are not to be acknowledged publicly, let alone encouraged.

But they've become a frightening reality. The San Diego firm You Walk Away said it's helped 3,000 American homeowners do just that this year.

"There are a number of cases where that is the only option available," said Ramos, broker-owner of Ruben Ramos Realty and a Yuba College real estate instructor. He explained in detail how he counsels borrowers to get maximum free months in the house and cash from lenders while they plan their exit.

"Pocket the money you're saving," he said. "Call me 25 months later, I'll put you in a nice home."

Ramos said it's not the end of the world when homeowners walk. They can get a new government-backed mortgage in about two years.

Home Front heard from readers "astounded" to see such raw advice in print. Others called it outrageous.

"It's not the right thing to do. I wonder if this is what we want taught in our colleges, to defraud lenders," said retired Sacramento homeowner John Lewis.

Leigh Rutledge, a Sacramento real estate agent, said, "There was part of me that thought The Bee shouldn't have printed it. The other part is that as a Realtor I'm incensed that this guy … that this is what people think of us. It's not how most Realtors feel."

To be fair to Ramos, another dialogue on the topic was edited out for space. He talked about working first with banks to get loan modifications. If the bank is willing, give it a try, he said. If not, leave.

"If I see that the modification only benefits the lender by keeping that borrower on the hook and slamming the door harder in their face two or three years further down the road, I'm going to be the first one to say, 'Walk away.' "

Some in the business said Ramos invited trouble with his remarks. But he cited the trouble that borrowers face.

What are they to do, he asked, when Congress passes Hope for Homeowners – to help 400,000 U.S. borrowers get principal reductions – and 10 weeks later it's called a failure, with just 312 applicants?

Ramos told another long story about a client in Williams who got a risky subprime mortgage that reset to an unaffordable payment in two years. When the man went to refinance, he was given "one of the worst loans in the market, and they stiffed him for $14,000 to $16,000 in loan fees."

He was one of the first Ramos helped walk away.

"I stand by what I said," he said. " I stand by it 100 percent."

Be cautious in seeking help

Firms claiming they can get your troubled loan modified are now leafleting neighborhoods.

Maybe they can help. But be careful about paying in advance.

The state Department of Real Estate says: The firms are not allowed to collect fees in advance if your lender has issued a notice of default against you (after you have missed three or more monthly payments). It's state law.

If you aren't yet in default, these firms may charge you in advance. Also, remember that many nonprofit loan counselors do the same thing for free.

More information: (916) 227-0864 or www.dre.ca.gov. (Click at top on homebuying and mortgages. Then click at left on Advance fees/Loan modification).

Low rates drive refinancing

The refi boom is on. With 30-year rates averaging 5.14 percent early this week, according to Freddie Mac, most mortgage applications are for refinancing. (Rates were jumpy later in the week, but trending up a little, according to other sources). The Mortgage Bankers Association pegs the refinance share at 83.2 percent.

Mortgage brokers are happy, but also frustrated. Some say borrowers are "locking in" rates and breaking the deal in days to lock in lower. That's an expense for brokers.

A time to cherish our homes

Finally, a thought about the holidays, when our homes take center stage. It's a time of year when we've wrapped our houses in lights, like big colorful ornaments in themselves.

Our kids come home to live again for a few days inside houses where they grew up. The big holiday movies stress the importance of home and the families inside them. Outside it's cold and inside is the warm glow of the house and the people who live there.

Our houses are a focal point for parties. We invite our friends in. We make cookies.

Enjoy yours and think about how lucky you are to have one.

Posted: Fri, 26 Dec 2008 00:00:00 PST