August 10, 2009
Bad June swoon for Sacramento-area homebuilders

http://www.sacbee.com/static/weblogs/real_estate/

Ouch! Homebuilders in Sacramento, El Dorado, Placer and Yolo counties reported their second worst sales month of 2009 in June, selling just 197 homes, condominiums and townhouses, the California Building Industry Association reported about an hour ago.

These things happen. But the regional sales tally was the lowest since January, when builders sold 163 homes, reported the CBIA, a trade group for state homebuilders.

It rather flies in the face of more encouraging news nationally on the new-home construction front. But sales are still very weak here as builders face significant competition from discounted bank repos. These repos still account for more than half the region’s sales.

Monthly sales totals in the four-county area by month:
Jan: 163
Feb: 201
March: 297
April: 290
May: 346
June: 197

June sales fell 43 percent from May, and were down 57 percent from June 2008, according to Costa Mesa-based Hanley Wood Market Intelligence. The firm compiles statistics for the CBIA monthly sales reports.

Statewide, builders reported 2,607 June sales. That was 13.6 percent fewer than in May and down 26 percent from the same time last year. CBIA execs called it weaker than expected and called again for the state Legislature to extend a $10,000 tax credit for buyers of new unoccupied homes in the state. The tax credit, which began in March, ran out in July due to better-than-expected demand.

Monday, the National Association of Home Builders, also called on Congress to extend the nation’s $8,000 first-time buyer tax credit for another year.

Hanley Wood research executive Jonathan Dienhart said today he expects statewide sales to match last year’s levels in coming months. But he cautioned in a statement, “It will definitely take a longer time to start mounting a significant recovery with home purchase tax credits due to expire and the broader economy continuing to struggle.”

Builders in the four-county Sacramento area plus Yuba and Sutter counties sold 1,764 homes the first half of 2009, Hanley Wood reported. That puts them on track to finish well behind last year’s 4,847 sales.

Top capital builders during the first half of 2009, according to Hanley Wood:
1) KB Home of Los Angeles, 161 sales, 9.1% market share.
2) Dallas-based Centex Homes, 143 sales, 8.1% market share.
3) Miami-based Lennar Homes, 132 sales, 7.5% market share.
4) JMC Homes of Roseville, 123 sales, 7% market share.
5) Beazer Homes, headquartered in Atlanta, 112 sales, 6.3 percent market share.

Other builders in the top 10: Arizona-based Taylor Morrison, Michigan-based Pulte Homes, New Jersey-based K. Hovnanian Homes, Michigan-based Del Webb and Texas-based D.R. Horton.

As an aside, the combined entity of Pulte, Centex and Del Webb – the result of a Centex/Pulte merger to be finalized later this year – accounted for 299 of the region’s 1,764 first-half sales, a whopping 17 percent market share.

Capital-area foreclosures keep climbing in second quarter

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/business/story/2047112.html

The capital-area foreclosure crisis raged on in April, May and June, with lenders repossessing another 4,448 homes and filing notices of default against 10,682 more households late on their payments.

The newest statistics from La Jolla-based researcher MDA DataQuick brought the foreclosure total to 41,903 households since the start of 2007 in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.

That’s 10.2 percent of California’s 410,744 foreclosures in the same time period. Statewide, 45,677 households surrendered keys to banks during the second quarter – and 124,562 received notices of default, DataQuick reported. Those are the formal foreclosure warnings issued when homeowners fall three months or more behind on payments.

As the state’s foreclosure crisis has grown and caused the economy to wobble and unemployment to rise to 11.6 percent statewide and the same in the capital region, the percentage of borrowers able to find their way out of trouble has steadily declined, DataQuick has reported.

The foreclosure tally rose both statewide and in the eight-county capital region from the first quarter, while the number of loan defaults fell slightly.

Regional highlights:

• Amador County: 29 foreclosures and 85 defaults.

• El Dorado County: 202 foreclosures and 632 defaults.

• Nevada County: 98 foreclosures and 286 defaults.

• Placer County: 515 foreclosures and 1,570 notices of default.

• Sacramento County: 3,019 foreclosures and 6,862 defaults.

• Sutter County: 154 foreclosures and 355 notices of default.

• Yolo County: 216 foreclosures, 541 defaults.

• Yuba County: 215 foreclosures and 351 defaults.

DataQuick predicted foreclosure numbers will go higher in the third quarter as lenders boost hiring to deal with a large backlog of delinquencies.

The firm said half the loans that defaulted during the quarter were made before July 2006, and half afterward. The lenders that originated the most troubled loans were Washington Mutual, a failed thrift taken over late last year by JP Morgan Chase, Wells Fargo and Countrywide, the failed lender taken over by Bank of America in mid-2008.

http://www.youtube.com/watch?v=BCCg6XK3lCs

Small banks start feeling financial stress

This By Charles Piller
cpiller@sacbee.com

http://www.sacbee.com/topstories/story/2000836.html

At first, the Sacramento region’s small, business-oriented community banks appeared to have sidestepped the plight of banking titans that staggered under the burden of home mortgage defaults. Now some are showing signs of stress.

Gold Country Bank in Marysville has become the weakest bank of its size in California – below 98 percent of similar banks nationwide, according to Bankrate.com, a leading independent evaluator. It took the place of MetroPacific on June 26, when that Irvine Bank was seized by regulators.

Granite Community Bank in Granite Bay has similar problems, according to data from analysts and the Federal Deposit Insurance Corp.

Nationally, one in five banks lost money in the first quarter of this year. But among this region’s 15 small community banks, two of every five lost money, including Gold Country and Granite Community.

Those and many other small banks rely more heavily on a combination of construction, industrial and commercial real estate loans than on home mortgages and securities. Initially, most coped with the economic collapse.

Not long after the residential mortgage meltdown, construction lending followed the same downward slope. Experts believe commercial mortgages and industrial loans – sensitive to high unemployment and low consumer confidence – are following a similar path.

The impact on banks holding many of those loans could be dire. When banks fail, federal insurance protects deposits up to $250,000 in most cases, but not shareholders’ investments. Local businesses reliant on community banks for credit also could suffer.

Representatives of Gold Country and Granite Community said that despite the challenging economy, they are prepared for any eventuality.

“Everyone in this region is experiencing the same things,” including falling demand for loans and sharply declining property values, said David R. Kaiser, president of Granite Community. “I don’t think I have any more concerns than my counterparts.”

But commercial real estate loans – on which many local banks deeply depend – were recently described by Rep. Carolyn Maloney, D-N.Y., chairwoman of the congressional Joint Economic Committee, as “a ticking time bomb” for massive default problems later this year.

Local challenges

In Yuba County, home of Gold Country Bank, the process already is unfolding.

“There’s a ton of empty commercial space; somebody has got to be making payments on those,” said Steve Brammer, chief operating officer of the Yuba-Sutter Economic Development Corp., a public lending agency. “It’s hard to do that without tenants.”

Lease rates for prime commercial space in Yuba County recently have fallen as much as 40 percent, Brammer said.

“We are starting to see some commercial loans going south,” said Brent Bosanek, owner of the Coldwell Banker Commercial property brokerage in Yuba City, and a former area commercial banker.

“For commercial lending, it’s all about the cash flow,” which declines as leases are renegotiated downward, he said. Lenders from outside the region have contacted his firm to appraise commercial properties, anticipating steep declines in value.

Bosanek added: “Banks are worried.”

Tarra Victorino, Gold Country’s chief financial officer, said the commercial property threat was on her bank’s radar, but that she was “not comfortable” quantifying the possible impact on its business.

“All banks are concerned if the commercial real estate sector suffers the problems that are predicted,” she said.

Several local banks also had far higher rates of commercial and industrial lending than similar banks. Such loans often go bad quickly in a recession, said Foresight Analytics partner Matthew Anderson. “They are even riskier than real estate lending.”

Like some of the other banks, Gold Country also has relatively high levels of restructured loans. This means terms have been changed before the loan comes due.

Troubled banks tend to use the practice, which is legal, to avoid designating loans as delinquent or to forestall foreclosures – delaying bad news from reaching their balance sheets.

http://www.webstarmagic.com/gmac/stats_4_counties.htm

Sacramento area misses move-up homebuyers — they’re staying put

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/topstories/story/1959684.html

Almost four years into the real estate crash, a once-thriving sector of the Sacramento-area housing market – the move-up buyer – has become a virtual dead zone that must revive itself for a true recovery to take hold, analysts say.

Even as real estate rocks with enthusiastic first-time buyers and investors – accounting for up to two-thirds of area sales – one expert warns against being fooled by “the common belief that real estate is flying off the shelves.”

Momentum needed for a true recovery rests on the shoulders of those who traditionally dominate real estate markets: people who sell one house and buy another.

And they aren’t doing it.

They can’t.

“Half to two-thirds of sales in the Sacramento region have not triggered a move-up,” said Andrew LePage, an analyst for property researcher MDA DataQuick. “It was just some lender got its money back and then it ends. When that’s been two-thirds of your market for months and months, ouch.”

Until the move-up sector of the market recovers, housing can’t recover, analysts say. (Everything above $400,000 is almost at a standstill. DataQuick says sales in move-up neighborhoods such as Land Park, east Sacramento and Arden Park are half their 10-year average since early 2008.)

And until housing recovers, many believe the economy will lag, and the state with it. The downturn prolongs the pain of layoffs, fuels the plunge in property taxes and deepens the local and state budget morass.

What are the problems confronting move-up buyers? Charlene Singley, president of the Sacramento Association of Realtors, counts three strikes against them:

• “First are the vast numbers” of distress sales and bank repos, she said. “Those people aren’t moving up. They’re not even moving down. They’re just going into rentals.”

The National Association of Realtors says two-thirds of sales in California this year have been distress sales that don’t trigger a move-up.

• “Equally big are homeowners out there who aren’t in a foreclosure, not in a short sale,” said Singley. “They don’t have the equity to pull out to put down on another house. They used to pull it out, move up, make money, do it again. You’d see it three or four times.”

Many consider that real estate stairway the promise of California. The theory is you have to “get in” the market and then ride it up. But now about one-third of borrowers in El Dorado, Placer, Sacramento and Yolo counties are trapped where they are – perhaps for years – owing more than their homes are worth.

• “Finally, if they’re lucky enough to have equity, maybe their income is decreased or they’re worried about their job security,” Singley said. “They could move, but they don’t have to. Why would they put their homes on the market? Not when they could wait a few years.”

This large collective impact of distress sales, negative equity and job fears translates into “an outright collapse in organic sales that measure the true health of the housing market,” according to Mark Hanson, managing director of Field Check Group, a Bay Area financial industry consultant. Hanson said California resales that trigger a second move – whether up, down or across – were down 60 percent in April from three years earlier.

That explains why Cynthia Hearden’s $459,000 house in Sacramento’s Land Park neighborhood has been slow to sell since its March listing. It tells why Kathy McKnight in the city’s Pocket neighborhood decided not to offer her house for sale after an agent suggested an asking price of $525,000, less than she had hoped.

Hearden, nearing retirement and aiming to downsize, showed one of the more creative responses to lack of move-ups. When she got an offer based on the potential buyer first selling her own house, Hearden waited as neither house moved. Then she looked at her potential buyer’s $289,000 house in South Land Park, and proposed a trade accounting for price differences.

The other homeowner was interested, but even that deal fell through last week.

Home Front: Lenders’ phones silent as rates rise

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/business/story/1940229.html

Mortgage rates, rising quickly from near-historic lows earlier this year, are already having negative consequences in the capital region.

“All of a sudden the phones just stopped ringing,” said Michael McGee, president of Rancho Cordova’s Winchester McGee Real Estate & Loans.

“At least right now, the refinance window has somewhat shut,” added Brent Wilson, senior loan consultant at Sacramento’s Comstock Mortgage.

It’s also spooking buyers who haven’t locked in a rate.

“I called my agent and said, ‘We have to cancel,’ ” said Toby McBride of Citrus Heights on Thursday. He and his wife put in an offer on a house June 1 when rates were 5.12 percent. When the deal wasn’t agreed to by Tuesday, with rates at 5.87 percent, they pulled the plug. (The new rate would add $175 a month to payments, said McBride, a federal worker).

“Definitely, the sudden change in interest rates has caused us to rethink our condition and lower our search price,” he said.

As investors stew about inflation in the long run, rates are pushing back toward 6 percent and have reached a seven-month high, according to mortgage giant Freddie Mac.

The firm’s Thursday survey revealed a national average of 5.59 percent (plus points) earlier this week for a 30-year fixed-rate loan. That’s up from 5.29 percent last week.

Thursday, financial Web site Bankrate.com showed an overnight average of 5.74 percent.

“It just pretty much happened so quickly,” said Charlene Singley, an agent with Lyon Real Estate and president of the Sacramento Association of Realtors. “I think it will take a while for people to realize that this is where the rates are now.”

“I think we’ll get some improvement from where we are today,” said McGee. “But back to the high fours? It’s possible, yes. Likely? I question that.”

New home sales suffer

Thousands of distressed existing homes are making life harder and harder for Sacramento-area home builders. Their April sales numbers revealed the capital-area market as one of the state’s weakest, according to the California Building Industry Association.

Builders in El Dorado, Placer, Sacramento and Yolo counties sold 290 houses in April. That was seven fewer than in March, and 48 percent below the same month last year, CBIA said this week. Builders in Yuba and Sutter counties sold 33 – better than March – but down 25 percent from the same time last year.

The numbers put area builders on track for a worse year than 2008, when they sold just 4,847 homes, according to Hanley Wood Market Intelligence.

In 2004 they sold 17,491.

The declines come amid fierce competition with discounted bank repos and short sales. In April, builders closed just 9.6 percent of the escrows in the capital area, compared with 24.5 percent in April 2005.

Statewide trends were a little better. Builders said sales were almost 7 percent better in April than March. But they were still down 31 percent from April 2008.

The CBIA said the median April sales price for a new house in El Dorado, Placer, Sacramento and Yolo counties was $292,900. It was $237,000 in Yuba and Sutter counties.

More time for renters

Oh, no. Home Front muffed a figure last week in an item about the Obama administration adding new protections for renters. In mistakenly noting that California renters get 30 days’ notice to move after banks repossess houses, we overlooked last year’s state Senate Bill 1137.

The bill gave tenants affected by foreclosure an extra 30 days’ notice – to 60 days – through Jan. 1, 2013.

President Barack Obama, however, just signed a bill that gives renters with month-to-month arrangements 90 days’ notice in foreclosure situations. Renters with leases in foreclosed homes stay until leases expire.

Profiting from feng shui

These days everyone is worried about money. But how do you get more? Here are a few feng shui ideas to increase your flow of wealth at home. For these, thank New York real estate broker Debra Duneier:

• The burners on your stove represent wealth. Keep them clean and alternate your use of the burners when cooking … The refrigerator should be filled with healthy food. A full refrigerator brings in abundance.

• The indoor plants that are wealth enhancers are bamboo and jade plants.

• Take three lucky Chinese coins and tape them to the back of a rug. Every time someone walks in (your home’s entry point) they symbolically are bringing money into your property and into your life.

• Keep toilet seats down when not in use. Keep them up and money will disappear.

More tax credits sought

Finally, an update on tax credits: The California Franchise Tax Board reports that buyers of new, unoccupied homes have requested $82.5 million of the $100 million allocated for $10,000 tax credits.

The building industry is working the state Legislature to add more millions. In Washington, D.C., real estate and business executives are lobbying Congress for a new $15,000 tax credit for all buyers. A current $8,000 tax credit is just for first-time buyers.

Use of short sales on rise in Sacramento housing market

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/business/story/1933643.html

For years real estate agents have steered buyers away from “short sales,” labeling them a mind-numbing, difficult experience that could exhaust the patience of the biblical Job.

Now buyers can hardly avoid them.

“When it’s 50 percent of the inventory you don’t have a choice,” said Scott Williams, a Roseville-based ReMax broker. Williams specializes in a complex transaction that may be the next evolution of the real estate market in Sacramento.

Banks, with their balance sheets battered after 40,000 capital-area foreclosures since early 2007, are finally warming up to short sales, a traditional marker of soured real estate markets. Increasingly, so are buyers. Some analysts believe short sales – those transactions in which banks accept offers below what they’re owed to avoid the higher costs of foreclosing – may help avert a few thousand new foreclosures in the capital region.

“I still see a ton of defaults coming down the line … but a large percentage, 50 percent or more of these, will get done as short sales and keep the flow of repos to a manageable level,” said Williams. “I don’t see us getting flooded.”

Industry analysts say half the for-sale signs in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties that aren’t bank repos are short sales. They’re especially prevalent in newer suburbs built during the housing boom. According to Sacramento-based Metrolist Services Inc.:

• 56 percent of Lincoln homes priced between $200,000 and $250,000 are short sales.

• 55 percent of Rancho Cordova homes priced between $200,000 and $300,000 are short sales. In Folsom, 46 percent of homes in that price range are short sales.

• 44 percent of Elk Grove houses priced from $300,000 to $325,000 are short sales.

All their owners owe more than their homes are worth. (Online evaluator Zillow.com says 68 percent of Sacramento-area households that bought in the past five years are in that boat). And most are believed to be in some stage of the foreclosure process.

Currently, nearly one in four sales pending – those expected to close escrow within weeks – are bank-approved short sales, according to Williams’ analysis of Metrolist data. That’s a rise from a January-through-June average of one in seven.

Bank repos, by comparison, are about 60 percent of area sales this year. But their share is falling now as the region’s short-sale market share rises.

“It’s a more cooperative solution,” said David Sunlin, senior vice president with Charlotte-based Bank of America Home Loans. He said the firm is adding staff and streamlining procedures to do more short sales more quickly as an alternative to foreclosing.

“It allows the borrower to leave on their own terms. It’s a more dignified exit strategy and the credit reporting is less negative afterward,” he said. “It’s a win for the lender as well. It’s going to shorten the recovery cycle, which is important to all of us.”

The firm, which bought Countrywide Financial last year, services one in five U.S. mortgages and is a top lender in the capital region.

Agents such as Williams hope the new BofA approach brings results. They complain that Countrywide has been among the industry’s most difficult servicers for short sales.

Buyers say short sales make great deals – if you’re patient.

“It probably saved us $50,000″ said Helen Martinez, who, with her husband, Robert, closed escrow two months ago on a short-sale property in Davis. It took almost four months, she said.

“If you need something right away it’s not going to work out,” she said. “You’ll sit around and wait forever and find something else.”

Jamie Trussell also expects to go into escrow soon on a short-sale property in Elk Grove. He and his wife, Tricia, made an offer on the house in February, then sweetened it by $10,000 when others bid on it.

“We fell in love with the house so we remain dedicated to it,” he said. The two checked out other houses while waiting, including bank repos, but Trussell said, “It’s been tough to beat the house we have with everything we want.”

Their long wait has had consequences, however. Higher interest rates are adding to their expected borrowing costs.

“The last few weeks I’ve been watching the interest rate climb,” said Trussell. “It was 4.8 percent in May, and now, it’s at 5.2 percent.

“Our greatest concern when we started was ‘how long is this going to take?’ It’s really pushing to the wire for us.”

Williams said many short sales fall apart between the offer and acceptance because people find other properties.

Short sales take so long because lenders must negotiate permission from other parties, such as investors and private mortgage insurers. Most recent home loans also have so-called “seconds,” an extra loan that financed the down payment. Other short sales involve home equity loans or homeowner associations seeking restitution for unpaid dues.

“That can make the process more complex,” said BofA’s Sunlin. He said BofA also asks some borrowers to contribute funds to ease the lenders’ losses “or sign a promissory note for a later date.”

“We see this every week,” said Scott Thompson, principal at Carmichael-based Mortgage Resolution Services, a short-sale specialty firm. He said such lender requests scuttle many short sales, prompting homeowners to instead “walk away” from the house.

Thompson said homeowners often prefer to walk away than request a short sale.

“Now, banks are ready to do them,” he said. “But many homeowners are so far under water on their mortgages that they’re disinclined to participate at all.”

Sunlin concedes the difficulties on both ends in a still-unraveling housing market.

“These are tough times,” he said. “But we are committed to make the process work better … By doing this we should see more private sales instead of bank-owned sales.”

Waiting game on low mortgage rates backfires

By Mark Glover
mglover@sacbee.com

http://www.sacbee.com/business/story/1903523.html

Sacramento-area homeowners and prospective first-time homebuyers might be wondering: Did we miss the boat on mortgage rates?

The short answer from experts is: Probably, but rates are still very attractive.

For 10 weeks, mortgage rates were riding well below 5 percent on 30-year loans, but housing and industry analysts speculated that many first-time homebuyers and homeowners looking to refinance existing mortgages were waiting for rates to drop even lower.

Then on Wednesday, rates went the other way.

Mortgage rates at some lenders spiked anywhere from 0.5 percent to 1 percent, and industry analysts pointed to economic indicators favorable to even higher rates in the coming weeks.

Rates on 30-year, fixed-rate mortgages averaged 4.91 percent this week, according to the Sacramento Association of Realtors. Some lenders’ rates spilled into the 5-percent-plus ballpark.

For those who were waiting for rates to go lower and others who had yet to lock in rates, the window of opportunity may have closed, experts said. They added the market is still relatively good.

“Did they miss it? Well, I think they did in the short term,” said Mike Lyon, head of Sacramento-based Lyon Real Estate. “The good news is it’s still cheap. For most people, I would say, ‘Let’s not get greedy.’

“Rates are still good. For decades, we were in the 10-percent-plus range. Prices are still soft. This is not the time to lose hope, but to be a little more vigilant. Maybe this was a wake-up call for people who were waiting.”

Still, Lyon said the rate spike will have its effect – probably on 5 percent to 10 percent of escrows in the local market.

“I think the initial problem is for those who did not lock in, and thinking (rates) would go lower was really extremely optimistic,” he said. “A lot of people who are first-time homebuyers are now going to think about the price. It reduces their buying power.”

Andrew LePage, an analyst with researcher MDA DataQuick, speculated that this week’s rise in mortgage rates might have a more limited effect on the local market.

“Anything under 5 percent is really good, period,” he said. “I’d guess that (borrowers) who might affected by this are at the margins.

“There are other factors. Lenders are being very picky, home prices are still in flux. Prices are temporarily firm in some areas. (Rates aren’t) the only factor, and nobody can predict mortgage rates, because there are so many factors.”

Lyon agreed that predicting the long-range course of mortgage rates requires a crystal ball, but he said demand for refinancing remains high. He said mortgage rates will continue to be affected by numerous economic factors, including overseas bond buying and the finite number of bonds that can be purchased in the market.

Keith Springer, president of Capital Financial Advisory Services in Sacramento, agreed, noting that the recent rally in the U.S. stock market also has applied pressure for increased rates.

“(Borrowers) probably have missed the boat on the lower rates,” Springer said. “If they skipped 4.5 (percent) or 4.75 (percent), we’re probably not going to see that again for maybe a couple years.

“The good news is that they’re probably not going to raise the prime rate soon, and that’s tied to the adjustable (rates). … People shouldn’t be scared, because even 5.5 percent is a good rate.”

Springer added that heavy borrowing by the U.S. government will be critical in determining rates over the months ahead. That was echoed this week by Federal Reserve Chairman Ben Bernanke, who said mortgage-rate increases are linked to concerns that enormous federal borrowing will decrease the value of government-backed assets.

The 30-year fixed mortgage rate was at a record low of 4.78 percent in April, which analysts linked to the Fed buying more than $1 trillion in mortgage securities and $300 billion in Treasury notes. Some analysts hope the Fed will continue to take aggressive steps, saying that U.S. economic recovery depends heavily on free-flowing credit and a stabilized housing market.

The same analysts point out that homeowners who refinance their mortgages tend to spend their extra cash more freely on goods and services, providing an overall lift to the economy.

The downside of more Fed action is that increased yields on Treasury notes tend to drive mortgage rates higher. Another potential downside of buying more Treasury notes is that it creates inflation.

Home Front: European media want close-ups of capital-area housing crash

By Jim Wasserman
jwasserman@sacbee.com

http://www.sacbee.com/736/story/1883525.html

Europeans are making Sacramento a regular stop on media expeditions to the housing crisis that has been pounding their banks.

This year, Home Front has received inquiries from a Swiss newspaper, a German magazine, a Dutch television show and most recently a German public TV program about finding places that reveal California’s housing crash and the people who have endured it.

Know this: The big real estate meltdown that defines the Central Valley and the outer Bay Area suburbs is interesting to people who live nine and 10 time zones east of here. It’s more than curiosity. Big European banks are taking hits after investing in the risky mortgage-backed securities tied to California real estate.

Public broadcaster ZDF Television of Mainz, Germany, said it plans to show up this Memorial Day weekend in the capital region as part of a Northern California tour. Producers called last week from Washington, D.C., scouting for newer struggling neighborhoods marked by foreclosures and for-sale signs. The aim is to show the audience back home the thousands of homes financed with subprime and adjustable-rate loans sold by Wall Street to German financial institutions.

The Dutch public television current affairs program NOVA also initially planned to have a crew in California this week, but didn’t make it. It was looking for partially inhabited and bankrupt apartment buildings, and was scouting Sacramento for possibilities.

“We didn’t actually make it to California (yet),” said Lynn Berger, a journalist with the Hilversum-based current affairs show. “But although we didn’t make this specific report, we have reported about the California real estate situation in the past (about foreclosures, mostly). It is definitely a topic that has been, and will be, covered widely on Dutch TV and in the newspapers,” he said in an e-mail this week.

Several weeks ago, Munich-based Focus Magazine sent reporter Stefan Wagner to Northern California for a magazine story on “effects of the financial crisis on Californians.” Wagner planned a trip to Sacramento and the Central Valley’s foreclosure belt (Merced especially) to talk with people losing their homes.

A Google search hasn’t yet turned up his report yet. But if you see Germans with video cameras this weekend be friendly; wave your adjustable-rate mortgage for the viewers back home.

Expanding affordability

There’s more good news on the affordability front. On the heels of last week’s California Association of Realtors report that 80 percent of first-time buyers can afford the median-price starter home in Sacramento, a prominent national housing index says three-fourths of homes sold in the capital area are “affordable.”

The National Association of Home Builders/Wells Fargo Housing Opportunity Index reported this week that 76 percent of homes sold in the first quarter of 2009 in El Dorado, Placer, Sacramento and Yolo counties were affordable to households earning the region’s median income of $72,800.

What’s most astonishing is how fast that ratio has changed. Just two years ago in the first quarter of 2007, only 13.4 percent of homes in the four-county region were affordable to households with a median income of $67,200.

Don’t miss credit deadline

There is one new thing Home Front should say about the state’s $10,000 homebuyer tax credit after a phone call from a buyer who missed the boat: Be sure to hound everyone involved in your sale to fax the application to the state Franchise Tax Board within seven days of closing escrow.

This caller said many real estate and escrow agents aren’t up to speed on the tax credit for buyers of new unoccupied homes. And he missed the deadline to apply, being busy with moving and paperwork. Goodbye $10,000 tax break.

The Franchise Tax Board says the builder’s people must complete a state form and give a copy to the buyer or escrow rep. The buyer fills out more details and then the escrow agent faxes it to the FTB. Advice from one who learned the hard way: Keep an eye on them.

Incidentally, a bill, AB 765, that would add $200 million to the tax credit allocation easily passed its first committee test – winning a 9-0 vote Tuesday in the Assembly Revenue and Taxation Committee. It goes now to the Assembly Appropriations Committee for similar consideration.

Pulte dominates region

The giants are getting bigger and more powerful. If 2009 continues the trends of its first quarter, Pulte Homes will sell one in five new houses this year in the capital region.

Pulte, with its Del Webb subsidiary and pending merger with Centex Homes, had a 20.4 percent market share in El Dorado, Placer, Sacramento, Yolo and Yuba counties, reports market tracker Hanley Wood Market Intelligence.

The firm counted 148 sales by Michigan-based Pulte and its two affiliates among 725 January, February and March sales in the six-county region.

That level of market share is unprecedented in the region in the last 20 to 30 years, said Hanley Wood’s Sacramento analyst Kathryn Boyce.