Those Cash Registers Now Tend To Be Liabilities
The Times Delta reports from California. “Jeff and Brittany Jenkins ran up against a hard new reality for Tulare County homeowners last year. Planning a move back to Phoenix to be close to Jeff’s parents — his father had been diagnosed with cancer — the Jenkins put their Visalia home up for sale in June, asking for a price they hoped would help them buy a home the same size or larger in Arizona. Jeff transferred his job to Phoenix and the couple and their three children moved in with Jeff’s parents. But the Visalia home sat on the market for months. Offers were $45,000 lower than what the Jenkins paid for the house in September 2006, and less than what they owed on their mortgage.”
“‘We wouldn’t even have been able to buy a house with that [price],’ Brittany Jenkins said.”
“In October, the Jenkins took their home off the market and a month later moved back to Visalia. Hundreds of Tulare County homeowners who are looking or needing to sell are facing the same stark landscape. Where as little as three years ago those homes would have been cash registers, selling at peak — some say inflated — prices, now they tend to be liabilities.”
“‘It was frustrating,’ Brittany Jenkins said. ‘We hadn’t even realized the market had gotten that bad.’”
“Nicole Ball and her husband, Eric…bought their northwest Visalia home in 2005 for $405,000. But then a series of things happened: Eric’s job required him to relocate to Los Angeles; the couple’s adjustable-rate mortgage reset, doubling their monthly payment; and declining home values wiped out their equity, making it impossible to refinance. Their mortgage holder wouldn’t modify their loan, Nicole Ball said. In October, they sold their house for $255,000, a so-called ’short sale.’”
“The Balls and their four children now are renting a home in Santa Clarita, saving up and waiting for their credit to improve before trying to buy another home, Nicole Ball said. ‘I sit down with [these homeowners], and they’re in shock that they’re going to end up selling their houses for so much less [than their asking price],’ said Rani Calderon, the broker-owner of Elite Properties in Visalia.”
The Fresno Bee. “Home prices in the Fresno area have plunged below the national average. The median price of sold houses in December in Fresno and Clovis was $154,000, a 39.6% decline from a year previously, said Jared Martin, president of the Fresno Association of Realtors. Pending sales — transactions that hadn’t closed — carried a median price of $144,840.”
“‘We’re below the national average [of $181,000], and we are in California, not Nebraska,’ said Patrick Conner, owner of one of Fresno’s largest residential real estate firms.”
The Recordnet. “San Joaquin County unemployment jumped in tandem with the state of California last month. Because of 2,000 lost jobs, the county’s unemployment rate hit 13 percent in December. Gabriel Hernandez, a Stockton electrician, has been feeling the pain of the slowdown in the region’s economy in recent weeks. Work completely evaporated in mid-December, he said. ‘It’s probably been the worst three months in my 10 years in the trade,’ he said.”
“In the financial sector, JP Morgan Chase Bank laid off 60 workers in the county last month in the continuing wake of its September buyout of Washington Mutual. Not that there haven’t been some bright spots. With foreclosure sales still booming month after month in the area, PMZ Real Estate has boosted staffing by 25 in 12 months to 90 employees in Stockton, said Ben Balsbaugh, residential sales manager for the office.”
The Marin Independent Journal. “Marin County’s jobless rate inched up to 5.4 percent last month while California’s rate jumped to 9.3 percent, capping a tumultuous year of massive job losses and a housing slump that has struck most of the country. Marin’s unemployment rate remains the lowest of any county in California. But Barbara Miller of Mill Valley, who works as a self-employed consultant, said she doubts the state numbers provide an accurate picture of how the recession is affecting Marin residents.”
“‘I don’t think it is really reflective of just how hard people are struggling in Marin given that so many of us are self-employed,’ Miller said. ‘I can’t sign up for unemployment, but my income last year was less than a quarter of what it has been for the last four or five years. I’m struggling.’”
The ee Sentinel. “With the month’s loss of 3,900 jobs, one in 10 eligible workers in Santa Cruz County was out of work. In Watsonville, where seasonal agricultural work drops off dramatically every winter, 21.1 percent of the population was out of work by the end of December. ‘We are most definitely seeing a rise in the number of people coming to our department for food stamps,’ said Linda Kerner, a spokeswoman for Santa Cruz County Human Services Department.”
The San Gabriel Valley News. “Los Angeles County’s unemployment rate nearly reached double digits in December, soaring to 9.9 percent, the state Employment Development Department reported Friday. That was a full percent higher than November’s jobless rate and nearly twice as high as it was a year earlier.”
“Frank Tripepi, La Puente’s interim city manager, said the current economic downturn is unlike anything he’s seen before. ‘I’ve been in business for 37 or 38 years, and this is like a perfect storm,’ he said. ‘Just about every sector of the economy has crashed at the same time and no one’s lending any money.’”
“‘It’s not just retail that’s the problem,’ said Nancy D. Sidhu, chief economist for the Los Angeles County Economic Development Corp. ‘We’re seeing increasing job losses in construction and the finance industry, as well as losses in manufacturing. A lot of manufacturing, like furniture making, is tied to housing.’”
“Baldwin Park is working with the city of El Monte to secure a grant to help refurbish and sell off foreclosed homes in the city and prevent blight, said Mayor Manuel Lozano.”
The LA Daily News. “Nearly one in 10 workers in Los Angeles County was unemployed in December, the highest jobless level in nearly 14 years and a sign the recession is deepening, state officials said Friday. Jerry Nickelsberg, senior economist at UCLA’s Anderson Forecast, said the massive loss of retail jobs demonstrates that this is a consumer-led recession, which is uncommon. ‘It’s a very sharp downturn, and we’ve had sharp downturns before. But this recession is different from other recessions,’ he said of the consumer impact.”
“About 1.7 million Californians were looking for work last month, an increase of 166,000 from November and 653,000 from December 2007. About 785,200 were laid off and 125,300 chose to leave their job.
The construction sector, hit hard by the housing slump and foreclosures, accounted for the most job cuts over the past year- 92,600 positions, a 10.8 percent annual drop.”
“‘We’re not finished with the downturn yet,’ Nickelsberg said. ‘There is more to go, to be sure.’”
The Press Enterprise. “Inland Southern California’s unemployment rate climbed to 10.1 percent in December, the first time it has been in double-digits in more than 13 years. There were 87,800 construction jobs in the Inland area in December, the state estimated. In the middle of 2006, when about 131,000 people worked in construction, virtually anyone who could hold a shovel could get work.”
“Carlos Gomez, a construction worker who specializes in concrete, said he has been laid off for the second time in about six months. ‘It’s bad,’ said Gomez, 26, of Riverside. ‘There’s just no work out there.’”
The County Sun. “People aren’t surprised, given the economic blows chiding the financial, housing and retail industries throughout San Bernardino and Riverside counties. The sad part is, Inland Empire employers will keep slashing jobs before 2009 is over, some experts say.”
“‘We’re finding more and more people who are unemployed for the first time in their lives, and they don’t know what to do,’ said Patti Roberts, spokeswoman for the state’s employment department. ‘There are a lot of people given the double challenge of not only being unemployed, but being unemployed in a profession they can’t go back to … like the mortgage industry.’”
“We asked Randall Lewis his thoughts on the Inland Empire’s housing market. The Upland-based Lewis Group of Cos., a family-owned company founded in 1955 in Claremont, sold Lewis Homes - its home-building business - to what is now KB Home. Q: Some experts say that when the Inland Empire’s downtrodden housing market recovers, it won’t be a booming recovery, and it could take up to 10 years to heal. What’s your opinion?”
“A: The 10-year prediction is overly pessimistic. It could happen, but I don’t think it will…What no one saw was the perfect storm coming. People didn’t connect the dots in the U.S. and world economies, and with these big financial institutions going down in a matter of weeks. It wasn’t even in the worst-case scenarios. A lot of institutions were arrogant, thinking, ‘We can do anything.’”
Inside Bay Area. “At least three major residential-retail projects deemed to be important catalysts for the downtown’s revival have toppled into separate mortgage defaults that together total $140 million. The loan defaults have jolted the financial prospects for the downtown Oakland projects that, combined, would bring nearly 300 residential units to the city’s urban center. The projects were all originally devised as for-sale condominium developments.”
“‘Clearly Oakland is not immune to the soft economy, the problems with the credit markets and the slow housing sector,’ said Ken Meyersieck, managing partner with the Oakland office of commercial realty brokerage Colliers International.”
“(A) survey, released by RealFacts, a rental industry research company based in Novato, claims that renters throughout the country should have an easier time finding rental housing and end up paying less than they might have a year ago. But, not necessarily in Santa Cruz, where occupancy rates in the larger properties have averaged 96.5 percent and rents have averaged $1,637.”
“For the newly established Second Street Commons, a building that looks out on the Santa Cruz Beach Boardwalk, vacancies have been a huge problem and rents were reduced last month, according to the property manager Jeri Sargent. The 44-unit complex opened in September but by the end of November, just 14 units were rented. The units are small — 230-300 square feet with kitchenettes and ‘very large bathrooms.’ In addition to a few units earmarked as low-income units, rents were as much as $1,200 and were reduced to $895-$1,095 per month; parking is $100 more.”
“‘I cringe every time I have to say those words,’ Sargent said.”
The Times Herald. “A pair of sisters, formerly of Vallejo, face more than 40 years in prison and more than $1 million in fines after being indicted on mortgage fraud charges, Acting U.S. Attorney Lawrence G. Brown announced Thursday. A federal grand jury returned a five-count indictment charging Ralondria Stafford, 34, of San Francisco, and Necole Ward, 30, of Las Vegas, with crimes relating to a mortgage fraud scheme carried out here between 2005 and 2006. The sisters operated Vallejo’s RN Realtors, through which, according to the indictment, they conspired to commit wire and bank fraud and engaged in money laundering.”
“The indictment alleges that between July 2005 and August 2006, the sisters used straw buyers to buy Vallejo properties. The buyers were offered $5,000 for the use of their name and financial information and were told the purchase would be in name only and that Stafford would buy the properties back within a year, according to the indictment.”
“‘Mortgage fraud has emerged as a major law enforcement priority in the wake of the housing market decline,’ Brown said. ‘As today’s indictment against these two former Realtors reflects, we will continue to give priority to those cases perpetrated by industry professionals.’”
The Bakersfield Californian. “A new lawsuit against Crisp, Cole & Associates alleges widespread fraud among appraisers, accountants, a homebuilder and others who worked with — or allegedly worked with — the defunct Bakersfield real estate company. The suit from the former Fremont Investment & Loan — now Fremont Reorganization Corp. — says fake employment information and fudged appraisals were submitted with seven loan applications it funded in 2005 and 2006.”
“In one example, Crisp’s wife, Jennifer Crisp, claimed to make $25,500 a month as a self-employed consultant. The house, at 8702 Oak Hills Ave., was appraised at $660,000. Jennifer Crisp was loaned the full sale amount, $659,340.”
“David Crisp, whose real estate sales license was revoked by regulators last fall, said Wednesday he is ‘just trying to get my life back together.’ ‘I’m trying to pick up the pieces to pay everybody back,’ Crisp said, ‘but I can’t do that when the newspaper keeps blasting me.’”
The Sacramento Bee. “The economy got you gripped in its clutches? Feeling stressed out by the endless news of layoffs, buyouts and bankruptcies? A San Francisco creative agency has just the fix: Squeeze-the-Banker dolls.”
“Deemed the ultimate stress-buster for troubled times, the squeezable dolls come in likenesses of three familiar Wall Street names: Alan, Ben and Henry. As in, former Federal Reserve Chairman Alan Greenspan, current Chairman Ben Bernanke and former Treasury Secretary Henry Paulson.”
“The stress-ball dolls were dreamed up a month ago by the partners at Creative Feed, a digital ad agency with offices in New York and San Francisco. Partner Arthur Ceria said the dolls are an antidote for Americans who have seen their 401(k) shrink ‘to a 41(k).’ ‘You can only laugh and rebuild,’ he said. ‘That’s what we’ve all gotta do.’”
