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More than 50,000 Yolo County residents could find themselves shelling out upwards of $1,000 next year on flood insurance.  Potential first-time buyers include the entire population of West Sacramento, Knights Landing, Yolo, Clarksburg and a third of El Macero.

The Federal Emergency Management Agency is updating the county’s flood maps, which determine where there’s a one percent chance of flooding in any given year.  The so-called 100-year flood is the threshold many banks use when requiring homeowners to purchase government-backed flood insurance.  FEMA delivered draft maps in December to local planning departments. A three-month public comment period extends to late May or early June.  Based on public input, FEMA will issue final versions around August. Six months later the maps will take effect.

Yolo County lies in a natural floodplain. Flood zones already run along the Colusa Basin Drain near Dunnigan and Knights Landing, Cache Creek (including north Woodland), and the Sacramento River (including the Yolo Bypass)  The current flood zone stops at the western levee along the Yolo Bypass.
Under the new maps, that flood zone would stretch westward to include thousands of acres currently outside the floodplain.

Nothing has happened to the integrity of the levees, said Will Marshall, an assistant city engineer for the city of Davis. ‘This doesn’t mean the levees aren’t going to hold water back.’  After Hurricane Katrina and the 2005 levee failures in New Orleans, FEMA decided to enforce quality standards established in 1986, Marshall said.  Yolo County’s 215-mile levee system is controlled by a hodgepodge of owners ranging from the state Department of Water Resources to private landowners.  ‘FEMA told the owners, ‘If you don’t certify the levees to the 1986 standards, we’re going to pretend the levees aren’t there … If you can’t demonstrate that it’s a good assumption that they can withstand the one-percent event, we’re going to assume they can’t,’ ‘ Marshall said.  None of the owners certified their levees.

The quality of the levees hasn’t changed, but tens of thousands of people will have to buy flood insurance come spring 2010.  Marshall estimated about 100 homes in El Macero would fall in the new flood zone.  That could cost them as much as $2,721, said Duff Devine, a local agent who deals in flood insurance.
Devine crunched some numbers on a few El Macero homes that would fall in the new flood zone.  Right now they could buy flood insurance for $348 a year as part of a ‘preferred risk’ policy.  That number could skyrocket eight fold to $2,721 if the draft maps still include El Macero when they take effect.

‘It’s huge,’ Devine said. ‘That’s the biggest premium I’ve ever seen in my time doing this.  Devine questioned the numbers - which he stressed were only hypothetical - saying homeowners typically see premiums jump three or four times.  Residents could avoid higher costs by purchasing flood insurance before the maps take effect, said Eric Simmons, the FEMA engineer for Yolo County. The lower cost would be grandfathered in even after they fall in a high hazard zone.  ‘The idea is to reward loyal policy holders,’ Simmons continued.
Buying flood insurance is a good idea even without the flood maps, said Mark Cocke, Woodland’s senior civil engineer.  ‘People make the assumption that they’re protected because they see a levee,’ Cocke said. ‘But every levee is going to have an event that exceeds its design capacity, and when that happens, bad things are going to happen.  ‘Every levee has a failure point,’ he added, ‘and people need to know that.’

Marta Juliao and her husband Carlos Puente look at samples of new kitchen tile colors in their new home in Wildhorse. The couple sold their Mace Ranch home this summer and moved to a larger, four-bedroom house fairly nearby. (Wayne Tilcock/Enterprise photo)

Who buys a home in today’s market? People who have a good reason to do so.

Marta Juliao, who teaches Spanish at the Davis Waldorf School, and her husband Carlos Puente, a professor of hydrology at UC Davis, have two children, ages 8 and 11. Juliao and Puente felt they needed a little more elbow room.

The family had been living in a three- bedroom, two-bath home in Mace Ranch, ‘but it had been small for a long time,’ Juliao said. They considered homes in Woodland, but didn’t want to make their kids change schools. So they started looking in the northeastern part of Davis.

‘Our old house sold fast. There were three offers in a week,’ Juliao said. That house fetched a price in the lower $500,000 range.

The couple looked at somewhat larger homes in the $600,000s and $700,000s. They found themselves making offers on houses that were attracting other offers as well. They finally purchased a four-bedroom house in Wildhorse. In addition to picking up a bedroom, their new place has an office. Juliao likes having a room to do her grading and lesson plans.  ‘And there’s space for the kids to play. And the lot size is bigger in the back,’ she said.

‘In 2005, it would have cost too much for us,’ she said. But prices have come down.

Other Davis sellers, however, are finding it takes longer to find a buyer, if they can find one at all. Some houses linger on the market for months, particularly those on the higher end. Herb Cross, who manages the Lyon Real Estate offices in Davis, Woodland and West Sacramento, said that during the first six months of 2008, only four Davis homes sold in the $900,000 to $1 million range, and four more sold in the $1 million to $1.5 million range, plus one home that sold for more than $1.5 million.

‘It’s a tough market in the upper price brackets,’ Cross said.

The pace is busier in the middle range. Cross said during the first six months of the year, 42 Davis homes sold between $300,000 and $400,000. Another 52 Davis homes sold between $400,000 and $500,000, and 49 homes sold between $500,000 and $600,000.

A quick start

In fact, the summer started out pretty briskly for local Realtors.

‘We had our best June in four years’ in terms of the volume of homes sold, said Doug Arnold, owner of Coldwell Banker-Doug Arnold Real Estate. ‘But in July it went back exactly to where it was last year at this time,’ and things slowed down again.

Prices in Davis continue to run considerably higher than in surrounding communities. The median price in Davis has been hovering in the low $500,000s, and dipped to $489,000 for the second quarter of 2008.

Coincidentally, the median home price for the San Francisco Bay Area also dipped to $485,000 in June - the first time in more than five years that the Bay Area median moved below the $500,000 level, according to DataQuick Information Systems. DataQuick includes Solano, Napa and Sonoma counties in its Bay Area figures.

Davis home prices are unquestionably down compared to last year, about 7 percent.

In Woodland, by comparison, the median home price is running in the upper $200,000s. Pretty much the same goes for West Sacramento. And in both cities, prices have come down around 25 percent from last year.

Prices around the Sacramento region are taking a tumble. The National Association of Realtors released quarterly statistics Thursday for the metropolitan area, and concluded that ‘the steepest declines in single-family home prices in the second quarter were in the Sacramento-Arden-Arcade-Roseville area of California, where the median prices of $229,500 dropped 35.6 percent from a year ago.’

In 2005, the National Association of Realtors pegged the median home price for the Sacramento region at $375,900.

DataQuick’s city-by-city breakdown showed a median home price at $179,000 in June for the city of Sacramento, a figure that looks almost Midwestern to many California real estate analysts. The median of $179,000 (based on 1,200-plus homes sold for the month) represents a 40.3 percent price decline for Sacramento compared to June 2007.

By contrast, there are virtually no homes in the under-$200,000 price category in Davis. In fact, there are very few in the $200,000 to $300,000 range -just eight transactions during the first six months of 2008.

Foreclosures high

The current prices in the Sacramento region are being depressed by the huge number of foreclosures. An article by Bloomberg News on July 31 said foreclosed properties accounted for 63 percent of June home sales in Sacramento County. Banks are selling foreclosed homes at steep discounts - in some cases, for roughly half of the price that the same homes fetched at the market peak in 2005. The banks want to get those foreclosed homes off their books.

The foreclosure numbers get even scarier as you move south. Bloomberg reported that foreclosures accounted for 66 percent of June home sales in San Joaquin County (including Stockton), 72 percent of June home sales in Stanislaus County (including Modesto), and 75 percent of June home sales in Merced County.

On Thursday, Irvine-based RealtyTrac reported July figures showing Merced now has the nation’s second-highest rate of foreclosures, with one in 73 homes receiving a foreclosure filing. Stockton and Modesto were described as ‘in a virtual tie’ for third place, with one in 82 homes receiving a foreclosure filing. The Vallejo-Fairfield area in Solano County was No. 8 on the list.

Davis is getting off light by comparison, and the less-volatile prices in Davis are related to the smaller number of foreclosures here. A check of RealtyTrac’s statistics on Thursday listed 24 Davis homes in ‘pre-foreclosure’ (meaning two or more late mortgage payments), with four homes in the auction phase of foreclosure and another 25 homes that are ‘bank-owned’ (taken back by the lender).

Neighboring Dixon, with less than one-third the population of Davis, had 105 homes in pre-foreclosure, 73 in the auction phase and 148 bank-owned homes, according to Thursday’s RealtyTrac summary

In Woodland, there are 257 homes in pre-foreclosure, 93 in the auction phase and 376 that are bank-owned.

Arnold told The Enterprise his company is handling foreclosed homes in Davis and Dixon that were financed through Countrywide Mortgage a few years ago. ‘We have two agents doing that full-time right now,’ Arnold said.

Who’s buying foreclosures in Woodland, Dixon and West Sacramento?

‘Investors,’ Arnold replied. ‘They see what were $400,000 homes that are now $250,000 or $225,000. They’re going to hold them, fix them up, rent them for three or four years. And someday, prices will start going up.

‘We’re also seeing some first-time buyers’ going after foreclosures in the region, Arnold said. ‘I don’t that know I’ve seen many in Davis.’

There are plenty of foreclosures in West Sacramento. The listings on RealtyTrac on Thursday indicated 315 homes in pre-foreclosure, 99 in the auction phase and 396 bank-owned.

For Sacramento, RealtyTrac reported 5,189 homes in pre-foreclosure, 3,182 in the auction phase, and 8,651 that are bank-owned. And for Elk Grove, the figures were 1,350 homes in pre-foreclosure, 709 in the auction phase and 1,799 bank-owned.

Solano County is getting hit as well. For Vacaville, the figures were 420 homes in pre-foreclosure, 259 in the auction phase and 562 bank-owned. And for Fairfield, the numbers were 796 homes in pre-foreclosure, 499 in the auction phase and 1,124 bank-owned.

The Los Angeles Times estimated this week that statewide, approximately 1,300 California homes are going into foreclosure on a daily bases.

Others feel the chill

Locally, the slowdown and downturn in the housing market also has meant hard times for real estate-related businesses. A few years ago, six title companies were doing business in Davis. Now there are only two, Placer and Fidelty.

‘Thirty years ago, First American Title was number one around here,’ Arnold reflected. But First American pulled out last fall.

The economic drag of declining home prices also has contributed to a drop in sales of large recreational vehicles - La Mesa RV in Davis will be closing in October. Sales at furniture stores and home improvement centers also have suffered.

The low median home price and large inventory of homes for sale in Sacramento is also making life difficult for home building companies. Asked about the $179,000 median home price for Sacramento during June, Arnold remarked, ‘The home building industry can’t build for that.’ Little wonder that the California Building Industry Association reported that in June, the Sacramento region had less than half the number of new home starts reported in June 2006.

The North State Building Industry Association, which serves the Sacramento area, is now touting the region as ‘the most affordable metropolitan area in California’ when median family income and median home prices are factored together.

Timing is everything

So is the market cycle approaching the much-discussed ‘bottom’? When is it a good time to buy?

That depends.

‘I think in the upper end, it’s certainly a good time to buy,’ Arnold said. ‘Some of the houses that were $1.2 (million) or $1.3 million are now $1 million, or under. And they’re going to go back up eventually, because Davis is Davis, and there are only so many homes in certain areas.’

Arnold also mentioned the traditional things that Realtors stress when showing Davis homes - good schools, attractive parks, low crime.

Cross said, ‘If you’re looking for a place to raise your family, now is a good time. There are advantages to owning property - pride of ownership, tax advantages, putting down roots, raising a family in a stable environment. You buy a piece of property, get a 30-year fixed mortgage, you know what your payment’s going to be. Your income will increase over time, your mortgage payment stays the same. That’s a huge advantage.

‘But if you’re looking to speculate, if you want to buy property and sell it for more in two years - you’re on your own,’ Cross said.

Cross advised that the difficulty with calling the bottom ‘is that there isn’t a light that goes on, and someone declares ‘We’ve reached the bottom.’ We won’t know we’ve reached the bottom until six months after we’ve reached it’ - and by that point, prices in the ever-cyclical realm of real estate have once more started to rise

Many homes in foreclosure today were purchased with subprime financing around 2005 - promoted, in some cases, by home builders who were eager to sell their product and relied on new methods of financing to do so.

This is part of the reason so many subprime-related foreclosures are found in areas like Elk Grove and Natomas that saw a lot of building around 2005, and so few subprime-related foreclosures are in Davis, where there were no major new subdivisions at the time.

Some observers think the two-year tide of subprime-related foreclosures has peaked, and most of the faltering subprime loans will have cycled through the financial system by the end of this year.

But real estate experts are concerned that a second category of mortgages, called ‘Alternative-A’ or ‘Alt-A’ mortgages, could send a new wave of homes into foreclosure in coming months. The New York Times, in a front-page story on Aug. 4, reported that the percentage of Alt-A mortgages in arrears ‘quadrupled to 12 percent in April,’ compared to a year earlier.

Herb Cross, who manages the Lyon Real Estate offices in Davis, Woodland and West Sacramento, described the difference between subprime and Alt-A.

‘A subprime mortgage is one that’s risky,’ he says. ‘Those kinds of mortgages were made to people that didn’t really qualify for a conventional loan.’

In some cases, buyers put no money down, or didn’t have to prove their income.

‘The Alt-A mortgages are probably closer to a more reasonable guideline,’ Cross said. ‘These people have a better chance of making the payments on the initial terms of the loan.’ Other observers describe Alt-A as ‘one rung above subprime.’

The problem, Cross said, crops up when the terms of the Alt-A loan start to reset.

‘They may have had the ability to make payments when the payments covered interest only, and the payment was $2,000. But when the adjustment occurs, and the interest rate goes up, and you include principal (as well as interest), you may raise the payment to $3,000. And people may not have the ability or the will to make these payments.

‘We’re being told by the banks that we work with that there may be as many as 2,000 (more) foreclosures coming on the market in the next three months over the Sacramento region,’ Cross said. ‘And that’s going to have an impact on the market.

‘We think we’re going to start seeing some foreclosures occurring in higher price ranges, up to $400,000 or higher,’ he added. ‘It’s been mostly in the lower price ranges so far. We think it’s going to move up.

‘The unknown factor is how many people will have the ability to make the payments, but find themselves in a situation where the mortgage is greater than the value of the property,’ Cross said. ‘They may make a decision to walk away from the property, with the idea that they can escape the high payments, and rent a property for considerably less.

‘During the five-year period of time when their credit will be very limited, they can try to save the money they would have paid on the mortgage’ - and eventually re-enter the housing market.

A concentration of empty, foreclosed homes can have a negative effect on a community. According to reports by the BBC and other news agencies, many homeowners in the Stockton/Tracy area have ‘walked away’ from their mortgages, and moved to less-costly rented homes closer to their jobs in the Bay Area, saving on gas.

City staff members are still recommending that a residential project proposed for 233 B St., near Central Park and UC Davis, be rejected.

The project, which went before the Davis Planning Commission on June 25, is too modern in style and doesn’t fit into the character of the neighborhood, staff members said. Several members of the Planning Commission agreed, and asked local architect Maria Ogrydziak - who owns the property and submitted the proposal - to make some changes.

Specifically, the commission wanted Ogrydziak to incorporate traditional residential window patterns, front porches and more privacy for neighbors.

Tonight, the commission will look at changes to the plans, but staff members are maintaining that the changes are not enough to fit into the district’s design guidelines.

The design guidelines - the result of hours of research and work by community members, staff, several city commissions and the City Council - were written and approved about a year ago.

The City Council approved a zoning change along B Street that encourages development of townhouses, condominiums and businesses between downtown Davis and the UC Davis campus.

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A list of 36 potential sites for housing went before the Davis City Council on Tuesday night, and the council weighed in on how the list should be used in future city planning.

Developed over more than a year by a group of Davis residents, the list values sites that are close to schools, parks, transportation and shopping, and recommends waiting to develop large tracts of land on the periphery of the city. The list is divided into three parts - green, yellow and red - indicating how soon each property should be considered for development.

Both the City Council and the Davis Planning Commission have looked at the list several times, but how it will be used in future policy isn’t yet clear. On Tuesday, the council held a workshop before its regular meeting to generate ideas and give staff members some guidance on how to write up an ordinance, which the council expects to consider in September.

Mayor Ruth Asmundson said growth in Davis is always a contentious issue, but likened the city to a baby whom everyone wishes would always stay the same. Many people attended the workshop, most of whom questioned why Davis needed to grow at all. ‘If this baby doesn’t grow, it will become retarded,’ she said. Many in the audience muttered at that comment, but Mayor Pro Tem Don Saylor said some growth is necessary.

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Levi Leipheimer of Santa Rosa, who finished third in the 2007 Tour de France, is a two-time winner of the Amgen Tour of California. The nine-day race will start its second stage in Davis on Sunday, Feb. 15, organizers confirmed today. AEG/Courtesy photo

On a cold, drizzly Tuesday in February, a peloton of professional bicyclists whizzed through Davis on their way to Sacramento, in hot competition to win the 2008 Amgen Tour of California.

The tour, billed as the most popular bicycle race in the United States, has twice passed through Davis, with the cyclists welcomed by cheering fans lining the streets. But fans have found it hard to participate, with many stuck at work as the riders pedaled through town.

That will change next February, when Davis will host the start of the second stage of the 2009 Amgen Tour of California. Mayor Ruth Asmundson made the official announcement this morning at Davis City Hall.

‘During the past two years, thousands of Davis citizens and school children have demonstrated their support of the Amgen Tour of California by lining our streets to cheer on the tour riders,’ she said. ‘With our recognition as the most bicycle-friendly community in the United States by the League of American Bicyclists, it’s an honor for the city to now be chosen as a host city for the 2009 tour.’

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Attendees toast to the fun, friendship and good food at last year’s Davis Village Feast in Central Park. Tickets are on sale for this year’s event, planned for Saturday, Aug. 23. Proceeds from the dinner will go to Davis Farm to School Connection, which supports food education for area youths. (Sue Cockrell/Enterprise file photo)

Tickets are on sale for the Fourth Annual Davis Village Feast on Saturday, Aug. 23, at The Davis Food Co-op in Davis and at http://www.brownpapertickets.com/event/36529 or http://www.slowfoodyolo.com.

The Village Feast is a late summer celebration of Yolo County food, wine and agriculture in the tradition of a Provencal Grand Aioli, with 300 people around one long table under the shade of the Sycamore trees in Davis Central Park.

This year the menu will feature local lamb cooked three ways, paired with Yolo County summer vegetables to go with the traditional bowls of golden aioli, and of course the signature fresh fruit tarts that signal the end of the slow leisurely meal.

The Village Feast benefits the Davis Farm to School Connection, which supports programs within the Davis schools such as school gardens, second-grade farm visits, recycling programs and local produce in the school lunch program. The event also includes a one-of-a-kind silent auction of regional foods, wines, and art - and includes a cooking behind the scenes opportunity with the chefs at Chez Panisse in Berkeley. The cost is $70 or $55 for Slow Food members. Advance reservations are required.

More information is available at (530) 219-0831, www.slowfoodyolo.com or www.davisfarmtoschool.org.

Kathrina Welborn holds her torch high as the Statue of Liberty and her sister Calissa is dressed in patriotic red, white and blue at the 2007 Fourth of July Kiwanis Kiddie Parade. Participants will gather for costume judging at 9:15 a.m. Friday on C Street between First and Second streets, then march a couple of blocks to Central Park, where refreshments will be served and awards presented in the sycamore grove. (Sue Cockrell/Enterprise file photo)

Davis will celebrate Independence Day on Friday with an
old-fashioned community party that stretches from dawn
till past dusk.'I am so excited for Fourth of July this
year,' said Daniela Loyola, a Davis resident of nearly
21 years. 'I love all the events that go on during the
day. It is a day where everyone comes together and enjoys
all the events that our town has put together.'

The Fourth of July gets an early start with the
traditional Little League pancake breakfast, an
all-you-can-eat feast from 7 to 10 a.m. at the Veterans'
Memorial Center, 203 E. 14th St. Breakfast is free for
Little League players in uniform, and for everyone else it
costs $3 at the door.

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A.J. Plant’s Colonial Revival house at 221 First St. was restored by Sierra Railroad Company. (Wayne Tilcock/Enterprise photo)

2008 Historic Preservation Awards honor efforts to keep beauty of past:

A.J. Plant’s Colonial Revival house at 221 First St. was restored by Sierra Railroad Company. (Wayne Tilcock/Enterprise photo) As a part of its renewed program of Historic Preservation Awards, and in honor of National Historic Preservation Month, the city of Davis Historical Resources Management Commission presented the 2008 Historical Preservation Awards to three recipients during a meeting earlier this month. They are:

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