If you're among the thousands of Sacramento-area homeowners who played it conservative during the housing boom, who didn't refinance or flip to a bigger house, everyone else's foreclosures reached out and smacked you anyway.
Sales prices are lower. There's less home equity to tap into. Local services have been shredded by falling property tax revenue.
Such repo collateral damage is why so many owners who pay their mortgages on time are so grouchy.
Rob Wassmer hasn't been affected so much. Fourteen years ago he bought an east Sacramento house in the Fab 40s cheaply at the very bottom of the last housing bust. His older neighborhood has largely escaped the brunt of 52,000 foreclosures across the Sacramento region since 2007.
But Wassmer knows the financial whipping people have taken in Lincoln, Elk Grove, North Highlands and Yuba City. Being an academic, he knew there had to be a number for the carnage.
"I knew this kind of research had been done. I wanted to do a study of Sacramento," said Wassmer, chairman of California State University, Sacramento's department of public policy and administration.
Wassmer analyzed $9 billion in sales prices from 36,822 home sales in Sacramento, Yolo, Yuba, Sutter, Placer and El Dorado counties between January 2008 and June 2009. Almost half were homes sold by banks. The other half were sold by regular folks.
He concluded that the foreclosed homes cost this one region of America $2.7 billion in price cuts and lost equity over just 18 months.
The repos sold for $659 million less simply because they were bank-owned and differed from normal sales. They took $1 billion more in price cuts because they were near other repos.
Both reductions then stripped $1 billion from sale prices of nearby homes never in foreclosure danger.
Collectively, these foreclosures cost local governments $27.1 million in property taxes. Reassessments will likely take more.
Said Wassmer, "This is a call for regulation." He suggests a federal law to make lenders and borrowers meet in "structured mediation" at least once before foreclosure.
Few ideas have proved so far to be the solution. See the research directly at: >www.csus.edu/indiv/w/wassmerr/ResForeclosure.pdf
State tax credit confusion
Tax preparation season is already disappointing some 2009 California home buyers who aren't getting a full three-year, $10,000 tax credit for buying a new home.
A Lincoln buyer called Home Front saying his 2009 credit will be about $300 well short of the $3,333 he'd expected to get for each of the next three years.
Spokeswoman Brenda Voet of the California Franchise Tax Board told Home Front that the size of the credit depends on the buyer's specific tax situation. "It's a dollar for dollar credit for taxes owed," she said.
That means if you owe $300 in state taxes you get a credit for the $300 and don't owe it. If you owe $4,000 in state taxes you get a credit for $3,333 and pay $667.
No one gets money from the state above what they owe, Voet said.
(Source: http://www.sacbee.com/2010/02/12/2531697/homefront-foreclosures-collateral.html#mi_rss=Home%20Front)