It’s a Capital Region paradox. The bad news for home builders is that very few new homes are going up. The good news for existing-home sales is that very few new homes are going up.
“It’s all about consumer confidence and inventory,” says Kris Vogt, president of Coldwell Banker Residential Brokerage for the Sacramento and Tahoe regions. “In various microeconomic markets throughout the region, homes are being sold. The number of homes on the market will increase significantly in the spring. In terms of actual sales, are we going to see a big uptick in the spring? Probably not.”
According to Vogt, the sales picture will start to look better in 2012. However, it will be 2014 or 2015 before the whole market — new and existing homes — fully recovers. And that projection assumes the U.S. financial industry figures out how to get rid of the ‘shadow’ inventory. This is inventory comprised of homeowners who have not made payments for up to two years but in which banks have still not taken foreclosure action.
“Everybody has been speculating on that situation for the past three years,” Vogt says. “While the number of foreclosures across the nation remains big news, there is still an artificial dam holding back an even greater number.”
Financial institution leaders and others are trying to figure out how to get through this inventory without crashing the recovering market, he says. He says one good sign locally is the increase in high-end short-sale approvals.
“From my own agents I’m hearing about more and more $1 million short sales,” Vogt says. “The bad news is it’s still a short sale, but the good news is at least it’s not going on the auction block and selling for $600,000. I believe everyone involved now realizes that, since the cost of foreclosure is so high, a short sale is a much better option.”
As this inventory situation plays out, Vogt estimates a great deal of volatility on the regional residential brokerage landscape.
“Unless something dramatically changes on the upside, I believe that 2011 will be much like the mid- to late-’90s for our industry,” he says. “During that period, home values crashed, and brokerage companies were consolidated or disappeared.”
• Occupation: Last August Vogt was named president and COO of the Sacramento/Tahoe region for Coldwell Banker Residential Brokerage. Prior to that, he had served for 13 years as the Elk Grove regional manager.
• Personal: Vogt met his wife of 22 years, Kellie, while attending kindergarten at C.W. Dillard Elementary School in Wilton. “I was 5; she was 4. We actually liked each other for one day in fourth grade.”
• Home: The couple has raised three children, Kaela, Kyle and Kelsey, on a 5-acre spread in their hometown. The acreage is also home to Gallatin, a longhorn steer, whose horns stretch 8 feet. “We get a lot of drive-by lookers,” he says.
• Work: “Upon accepting this job, my mission was to correct the misperception this company had internally and externally,” he says. “Not only are we not stodgy and inflexible, we have all the resources and technology required in today’s difficult market.”
• Lunch: At Ella Dining Room and Bar, Vogt orders a cured salmon sandwich with dill caper cream cheese, avocado and upland cress.
Former California State Treasurer Phil Angelides was tapped in 2009 to chair the Financial Crisis Inquiry Commission, a 10-member commission that Congress tasked with determining the causes of the Great Recession.
Joshua Wood, 31, is the executive director of Region Builders, a commercial-building trade association and coalition. Region Builders is comprised of 13 industry and professional associations representing architects, engineers, contractors, developers and allied firms from the Sacramento area.