On a tree-lined street in central Napa, green lawns in front of modest 1940s-era homes paint the typical picture of middle class suburbia.All seems in order — except for the one house with furniture dumped on the lawn and boxes of clothing and other detritus scattered on the driveway. An old garage sale sign hangs on the trunk of a shady tree, covered with a second, hastily scrawled sign that reads “Free.”
The two-bedroom, one-bath home on Pacific Street foreclosed on June 30. To a passerby, it seems the residents attempted to make few bucks as an eviction date drew near, then gave up as the deadline passed.Unfortunately, the trouble isn’t isolated to Pacific Street.
As I read last Sunday’s front page of the Napa Valley Register, our largest local newspaper, it was as if it had awaken to the fact, THERE IS MORE BAD NEWS OUT THERE THAN THEY EVER ACKNOWLEGDED IN THE PAST. Granted, the Register has run many articles through time which highlighted issues from the current real estate bubble-bursting we are going through. But never before has it tried to truly represent the extent of the problem here.
The Napa Valley is an exceptional place to live and we do have an international re-known which tends to insulate us from the depths of this down-turn which many other areas of California are experiencing. Yet we too are feeling the pain. This all leads back to the question I have been continually asking in this blog, “Are we approaching a bottom for declining real estate prices?”
But declining values have meant tough times for some homeowners, including a number on Harrison Avenue in Napa.This Westwood street of about 60 homes built in the early 1940s is just two blocks long. Back in late 2004 and early 2005, a number of the typically 800-square foot homes on Harrison Avenue sold in the low-to-mid $400,000s.Between March and July 2008, five of those homes foreclosed. Another three are in pre-foreclosure, meaning the owners must renegotiate their debt or make arrangements to stave off loss of the properties to banks and other lenders.
I can remember back over 18 months ago, when at an office meeting for my company, Coldwell Bankers Brokers of the Valley, one of the agents stated he felt this down-turn would go on for 3-5 years. At the time, I felt he was too pessimistic. Then I believed it would last 18-24 months and we would be coming out of it by now. After going through this period, I feel more like I am on Survivor, the popular reality show, than a Realtor selling property in one of the true enclaves, my expression for what a great place the Valley is. This is the third down-turn I have been through in my 25 years selling real estate, but by far the worst. As it continues to rain more bad news every two or three months and a “new shoe continues to drop” in this on going saga, I have changed my opinion and am now of the camp that this down-turn will last 3-4 years, with the worst behind us at the end of 2009.
In the past 12 months, the median price of a Napa County home has fallen approximately $200,000, according to Trendgraphix, Inc. In June 2007 the median price for a Napa County home was $660,000. As of June 2008, the median was $446,000.A foreclosed home in the Rancho Del Mar neighborhood of American Canyon is just one example. Three years ago, the three-bedroom, one-bath home at 211 Carolyn Dr. sold for $465,000.The current listing price: $219,900.
Thus, when reading some of the comments by other agents, managers in the Sunday articles, below are examples, I feel they, and after reading the Register, both still don’t quite understand, nor portray, the depth of what is going on. As I stated, the printing of the three articles on Sunday’s front page is the first time the Register’s news coverage was nearing reality. I think it has a ways to go given what is happening beyond Napa County’s borders. An example, from 2 blogs I read, is how commercial lending will tighten dramatically in 2009, becoming mostly a cash only purchase environment. And guess who many of these cash buyers are? This transfer of wealth from America to many oil and commodities rich countries and their buying of America is a separate article I am working on for the future.
“Historically Napa has shown the ability to bounce back from economic downturns,”
“My opinion is that the worst is over, especially locally.”“Good times are ahead.”
Here are the links to the three articles:
Here is a link to area foreclosures from the same articles:
In conclusion, I am still not an out-right pessimist, nor as optimistic as as used to be. If anything, I am learning to take this, as one should all of life, day by day remembering to live for now. Life is too short and when I compare this to a heart wrenching letter I received from a good friend who is struggling to over come cancer, I realize just how precious it truly is. Thus to life, hope and this too will pass.