Employment Impact “The Big Story In 2007″
The Union Tribune reports from California. “For years, new-home construction was the engine that drove the growth of the San Diego economy. But since the housing industry hit the brakes, regional growth has slowed to a crawl, local economists said at a forum yesterday.”
“The regional housing downturn has prompted layoffs in real estate and construction, said economist Alan Gin of the University of San Diego. ‘The big story in 2007 is going to be the real estate market and its impact on employment,’ Gin said.”
“Hiring for real estate-related jobs has declined steadily over the past year in San Diego County, Gin said. The local industry began to shed jobs in November, and roughly 6,000 jobs were eliminated during the last two months of 2006.”
“Construction of single-family houses has fallen so sharply that Alan Nevin of MarketPointe Realty Advisors said, ‘The new single-family home here is pretty much of a dodo.’”
“On a related front, the high cost of housing has become the biggest hurdle for employers to overcome in recruiting new employees, said Michael Schuerman, director of research for the San Diego Regional Economic Development Corp.”
“In a 2006 survey of local companies, 90 percent of the employers and 100 percent of the employees identified the high cost of housing as their top local business challenge.”
“As a result, far more people are leaving San Diego County than are moving here. Citing data from the California Department of Finance, Schuerman said only 900 people moved to San Diego County over the past two years, while more than 28,500 residents moved out.”
“That’s ‘hard evidence of what the housing situation is doing,’ he said.”
“Consumer confidence represents an additional risk, speakers said. Consumers also could be shaken by a spike in loan defaults and home foreclosures, Gin said.”
The Wall Street Journal. “In California’s San Diego County, developers have more than 10,000 condos available for sale in new buildings, projects under construction or properties being converted from rentals, says consultant Peter Dennehy.”
“He says that supply is enough to last more than 20 months at the current sales rate. That number excludes several thousand condos being offered for resale by speculators and others.”
“Mr. Dennehy estimates that condo prices have fallen at least 15% to 20% in the county over the past year, though it’s hard to measure price changes because sellers often give incentives such as free upgrades or help with closing costs that aren’t reflected in the price.”
“Many lenders are growing more cautious about how much debt home buyers should be allowed to take on and more inclined to ask for proof of income. This tougher attitude will exclude some marginal buyers from the market, hurting demand, even as a rising number of foreclosures throws more supply on the market.”
“DataQuick said that mortgage lenders sent 37,273 default notices to California homeowners in the fourth quarter, up 145% from a year earlier and the highest in more than eight years.”
“One of California’s weakest markets last year was the Sacramento area. Analyst Anthony Graham says sellers of previously occupied homes there have had trouble competing with the huge discounts and incentives offered by builders.”
“Mr. Graham expects average home prices in the Sacramento metro area to fall between 6% and 8% this year, but believes the market will begin to recover modestly by the fourth quarter, assuming that home builders continue to cut their production.”
“California’s Central Valley, which includes such cities as Bakersfield, Fresno, Merced and Stockton, may take longer to absorb excess new-home inventory and bring prices down to more affordable levels, said Greg Paquin, president of Gregory Group in Folsom, Calif.”
“An exclusive report done for The Wall Street Journal by the National Association of Home Builders showed a return to a buyer’s market in the million-dollar range. But in some places, like San Francisco, where prices have remained high for years, the overall median is $740,000, compared with the median price of $870,000 in the city’s ‘million-dollar’ category, buyers aren’t rushing in.”
“Fatigued by years of fruitless house-hunting, they ‘can’t quite believe’ that the market has finally turned in their favor, according to broker Linda Harrison.”
“Analysts Celia Chen at Moody’s Investor Service’s Economy.com, says many parts of Southern California (are) at ‘high risk’ for a fall. Although the local economy is strong, incomes haven’t kept pace with the sizzling double-digit price increases these markets experienced from 2001 to 2005.”
“And with federal regulators pressuring lenders to cut back on creative financing, fewer buyers are able to stretch their incomes to buy million-dollar homes. That’s what banker David Jaffe discovered when he put his five-bedroom stucco home in Ventura, Calif., on the market 2 1/2 months ago for $979,900. Mr. Jaffe attracted an offer close to his asking price soon after he listed it. But the deal fell apart in escrow when the buyer couldn’t qualify for the loan.”
“Mr. Jaffe bought the place in April 2005 for $935,000 in a bidding war, and still hopes to find someone who will meet his asking price. But he doesn’t expect to see lines forming at his door, especially since homes in his price range are affordable to fewer people and no longer have quite the cachet that they once did.”
“‘The market is changing,’ he says. ‘It’s definitely a buyer’s market now.’”
‘Providing a rare glimpse inside the executive suite at Ameriquest Capital Corp., a lawsuit filed Friday accused billionaire owner Roland E. Arnall of thwarting efforts to reform the Orange company’s predatory practices in the selling of mortgage loans. Lee said Arnall ‘repeatedly blocked’ his efforts to implement reforms after allegations of deceptive and fraudulent lending practices at Ameriquest.’
‘Without admitting wrongdoing, the company agreed in January 2006, to pay $325 million to settle predatory lending charges brought by the attorneys general of 49 states. Two years ago, Ameriquest and its affiliates were No. 1 in the sub-prime market, but its market share eroded amid a general downturn in the industry. Last year, Ameriquest laid off nearly 4,000 employees and dismantled its branch offices.’
Corporate criminals. The new mafia.
–
I have been using the term Corporate Crooks of America longer than the current housing bubble. Obviously, it is systemic and not just any particular industry.
Jas
Corporate Crooks with connections to the political crooks. Crony republican/democrat capitalism like in a banana republic. Sometimes when you read these stories you have the impression that the place is runned more and more like Russia or China.
Its almost like all those young executives, interns, and govenrment consultants (EBRD, USAID, IFC, etc.) who advised Russia in the early 90’s were infected with a disease and brought it back to their respective home countries by the late 90’s.
Everything that has played out in the US over the past few years is like a rerun of what has been going on in Russia. The only difference is the scale. I am talking about both politics and finance.
Maybe Russia of the 90’s was just a test ground for new bankster tactics?
posted ” Sometimes when you read these stories you have the impression that the place is runned more and more like Russia or China.”
At least in China they will hang the president of a failed bank. We could learn from them.
Good idea.
posted ” I have been using the term Corporate Crooks of America longer than the current housing bubble. Obviously, it is systemic and not just any particular industry.”
I agree.
Isn’t Arnall a friend of the president?
YES, Si signor. He is a crony of el presidente Arbusto.
It’s all part of the cost to benefit ratio. Companies have, for years, calculated losses for fines/lawsuits/etc. and as long as the bottom line is big enough….it’s simply part of the cost of doing business.
How’d that work out with Ford and the Pinto?
We have the death penalty but not for white collar criminals who IMO are worse of the worse. Those corporate crook should be the first to face the firing squad. But the system is rigged to protect its own. Corporate crooks, political crooks, government crooks, they each rub each other. It is disgusting!!!! All of these crooks deserve the death penalty IMO
There is - aka Arthur Anderson forced to close after charged in the Enron scandal. It’s unfortunate that more industries are subject to such draconian (well, to the companies anyways) regulation.
Who’s worse - Ken Lay or Roland Arnall? Consider the number of bilked home buyers vs number of bilked investors.
I think Arnall makes Lay look like a neophyte.
Arnall did affect more average people. These white collar criminals deserve 10 to 30 years at least. But they are protected by their friends on Capitol Hill and they make big campaign donations.
posted ” ‘Without admitting wrongdoing, the company agreed in January 2006, to pay $325 million ”
Wow! I did nothing wrong…. but here’s a third of a billion bucks?
Pennies on the multibillion dollars they’ve earned. I’m sure an actuary would crunch the numbers and say ‘go for it’, you’ll make far more than you’ll pay IF you get caught.
In response to “How much is two plus two?”, a marketing VP will say “22″; an accountant will say “4.00″; a mathematician will say “I can demonstrate it equals 4 with the following proof … “; an actuary will ask “What do you want it to equal?”; a lawyer will say “it’s 4, but with charges it’s 12.”
No matter what, WE lose.
And in Canada the CIBC paid 2,5 billion for hiding the crimes of the bastards at ENRON. The president of the fu-cken bank retired recently in his Nova-Scotia manshion with a 50 million retirement fund. Oh Caca-nada on guard for thee crooked CEO CIBC banker !
CIBC Canadian Imperial Bank of Caca-nada.
These crooked, greedy A-holes. That is big business for you sometimes.
On the same day that the White House announced that President Bush is nominating California billionaire Roland E. Arnall to be ambassador to the Netherlands, the company he controls said it would set aside $325 million for a possible settlement of allegations of predatory lending tactics.
Arnall’s company, Ameriquest Mortgage Co., is being investigated by regulators in 30 states. A $325 million settlement would be one of the largest ever in a predatory lending case.
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/28/AR2005072801842.html
“It’s just good business.”
Bush should be impeached for incompetence and cronyism…but then that would leave us with Cheney and then Pelosi.
How did we ever get in this mess? We need term limits desperately to get rid of the stench at all levels of government.
I realize this could get me in a lot of hot water, but didn’t Jefferson advocate revolution if the gubmint no longers works for the people. Heck, wasn’t it a revolution that got this whole US thing going anyway? BTW, anyone willing to sacrice liberty for security is worthy of neither, thank you Ben (Franklin, that is). And didn’t Jefferson also say something about shaking blood from the tree of liberty (I am too lazy to look this one up, so forgive me)? Nothing WILL EVER CHANGE in this country until the sheeple rise up and take matters into their own hands. Tragically, people are too busy SERVICING debt and watching American Idol to care about what the gubmint is doing. In addition, the gubmint gives us just enough slack to keep the sheeple happy.
Technology eliminated the ability of the “people” to rise up and take the government back. Proven in 1865 and it is far worse now. No chance….only within the system. Problem is, when the revolutionaries penetrate the system, they either convert or get pushed out!
Steve Roach at Morgan Stanley, at Davos, warning that globalization, so rewarding for those at the top, is being pushed back politically by the middle and working classes, and not just in the US–tho he cites Dem wins in Nov and right-wing losses in Europe. Not that he cares about anyone but the BigBoyz, but warning that the wealth transfer party might not go on forever. In short, if things get uglier, the peasants might be revolting, as well as repulsive. As he sadly notes, they vote in greater numbers than the deserving rich.
“The most obvious — wages could go up and corporate profits could come under pressure. But it also seems reasonable to expect pro-labor politicians to direct regulatory scrutiny at excess returns on capital — focusing, in particular, on the perceptions of excess returns in financial markets (i.e., hedge funds and private equity) as well as on the inequities of rewards at the upper end of the income distribution (i.e., tax cuts for wealthy citizens and the excesses of executive compensation)… especially if the global economy slows and unemployment starts to rise in 2007, as we anticipate.
http://www.morganstanley.com/views/perspectives/index.html#anchor4201
I think Roach is right on, as usual. IMO, the congressional win for Democrats was as much due to the recent demise of the middle-class as it was about the Iraq war.
Why anyone would be surprised that the most criminal crooked administration would be in bed with this bastard is beyond me. Bush is the biggest American traitor our country has ever seen. And the worst president to boot.
“And the worst president to boot”
You obviously aren’t old enough to remember Jimmy Carter who brought us 19% prime, 13% unemployment, and 12% inflation…..and a little thing in Iran.
We had to pay for a little thing called Vietnam and the explosion of fuel costs with the first oil shock, without Carter appointing Volker our country would have been destroyed!
Presidents are seldom responsible for what happens on their watch, only for how they respond. Carter inherited a sick economy from Ford who in turn got it from Nixon. Carter didn’t respond decisively enough but finally brought Paul Volcker to the top of the Fed. Deregulations started under Carter, too.
It’s sad to see the crooked CEOs with hundreds of million dollars paychecks (Goldman Sach, Exxon, Glasso …) while
American’s jobs, technologies, knowhows and future are being sent oversea,
and while poor American soldiers are dying daily.
..and a little thing in Iran.
Long before Carter, the CIA helped topple the democratically elected govt. of Iran so that the US puppet, the Shah, could take power. Hardly surprising then that the subsequent fundamentalists revolutionaries should blame America and hold its citizens hostage. Place the blame where it’s due.
And Carter was unable to resolve the hostage situation because Olly North & Co. made a deal with Iran to keep the hostages till after the US presidential election, making Carter look bad and Reagan look like a hero. Iran released the hostages on the day of Reagan’s inauguration as president, how convenient.
Amen to what Betamax said regarding Carter.
Finally - someone who knows what the hell they’re talking about.
Sing it brother!
Not a bush lover, by any stretch, but you must consider the context of two historic disasters, one in each of his terms, before you pass judgement. While he could have done better, some could have done much worse (i.e. consider if Al Gore were president during 9-11).
Agree with Betamax!
IMHO, Carter is one of the few U.S. presidents who actually had integrity. He was president during a difficult time, and many (most?) of those problems would have happened no matter who was in office.
I’ve read a couple of his books recently, and he is a very intelligent man who seems to have his heart — and head — in the right place.
Just an opinion.
Betamax your facts are wrong. The Iranians gave us back our hostages because they were invaded on Sep. 22 1980 by Iraq – just five weeks before the U.S. elections. There was no October Surprise deal. The Iranians were worried that Reagan would bomb their asses and they would be conquered by Iraq. Iran contra was a different deal all together. Carter was pathetic. He let the Shaw of Iran come here for medical treatment and that is what pissed off the Iranians. Then Cater seized all their assets and really pissed them off. Then he refused to bomb them – something that would have worked. The American people fired Carter with 91% of electoral votes going to Reagan. Carter is the reason I have never voted for a Democrat!
you must consider the context of two historic disasters, one in each of his terms, before you pass judgement
Yes let’s do that. Now Bush tried to blame Saddam for 9/11, let the real culprit Bin Laden escape, and started a fraudulent invasion of Iraq which has resulted in the country being taken over by Iran-allied Shia fundamentalists. And over 3000 dead Americans - more than 9/11.
New Orleans? Bush ignored clear warnings that a disaster was coming, went on vacation, and didn’t even know what was going on until an aide talked him into viewing a DVD containing news reports. New Orleans still lies in ruins over a year later.
Breathtaking.
This debate probably splits on “my party right or wrong” lines, but I do have to give a vote to Carter. He is certainly to blame for some, but certainly not all, of the economic and other problems of the 1970s. Presidents take the heat or credit for all sorts of stuff that occurs in their terms. But in my view,the man has demonstrated for all the world over the last 30 years that he has integrity. Bush’s 6 years have, much to my disbelief, made Clinton look like an Eagle Scout. I truly hope our next President, whichever party, is somone that is of Carter’s caliber.
NoVa, what you say is true, the reformers get coopted by the powers that be and end up betraying their ideas. Maybe, the only solution would be for one of these sob’s to see the light and start changing things from above once he is already there, so he/she doesn’t have to sell his soul or maybe doesn’t have one to sell anymore.
Hey, they want to send him over there to punihs nhz for posting here. ; -)
posted “‘Without admitting wrongdoing, the company agreed in January 2006, to pay $325 million ”
I wonder who gets the coin? No wonder these people never go to jail…. they are a cash cow for the government. Do you know how many speeding tickets the cops would have to write to make that kind of bank?
SAME THING IN CACA-NADA.
posted ” SAME THING IN CACA-NADA.”
I don’t beleive it. I have only heard good things about Canada. The health care system, the French to enlighten and lead the way. They have never made one single mistake in Canada…. ever!
We are talking of English-Canadians here.
There is still a difference. Thank God. For the moment nobody in French Canada was involved in the Enron Scandal. Remember a certain farrrrrttttt from New-York that thought that all the Al-Quaida terrorists were french speaking algerians and came from Québec. The reality is that all of them were anglo speaking egyptians and saudi-arabians coming from Florida. Well well well? Jebb Bush connection to 9-11. But it’s nice to say racist things on the frogs or on the nasty and corrupt Mexixcans. I forgot how pure and uncorrupt the good old methodists WASP anglo-saxons in Washington are…
posted “I forgot how pure and uncorrupt the good old methodists WASP anglo-saxons in Washington are”
Shame on you! Now say 10 hail Mary’s or what ever it is the little people do….
What?!? Are you DARING to question THE World-Renowned Canadian geo-political authority, Marc Authier?!? The same Canadian sage who just 3 weeks ago suggested that the USA again use nuclear weapons against the Japanese?!? How dare you impune the phenomenal wisdom of such an incredible half-wit… Why- the village idiots of the world are crying out for for his guidance and yet you ridicule and reject his counsel! Even though this forum is for the Housing Bubble and its directly related topics, you should WELCOME his bizarre and disjointed verbal attacks upon the United States Government, its citizens, its health care system, its tax code, its postal system, Its penal system and all things not-Canadian-in-nature. Don’t you understand?!? If we were just like Canada (ask Hillary) the world would be SO utopian, because in Canada… well, its just DIFFERENT there….
Marc,
I am tired of the non-sense you are proliferating about English speaking Canada, or else. Quebec is probably the most corupt and paternalistic society in North America. When it comes to real estate, greed has no nationality. I was watching the other day on “Buy Me” some greedy sellers trying to dump their POS in Montreal. It was a 3-bedroom, one bathroom,semi-detachedhome. they paid $120,00 8 yeras ago and wanted $389,000. Unbelievable!
Hey I watched that…did you catch them telling the agent that their house, which was pretty junky looking had curb appeal, unlike the one across the street, which looked just like it,which set a new comp at 305k. The dummies losttheir agent, and went FSBO, at the same greedhead price, while the other side of their house went up for sale for less. Show ended with these greedheads and their dusty house unsold a year later, but still holding out. A model couple of truly horrible and deluded homesellers.
“greedheads”
Nice one.
Who cares what the sellers want to get for their POS. Sellers can only sell for what buyers are willing to pay - it is the buyers who have been responsible for the housing bubble, not sellers. Surely this is obvious to any reader of this blog.
As for reality, Montreal is one of the most affordable major cities in Canada. It has about the same median family income as Vancouver, but prices are only about 1/3 (you read that right) as much. Granted Montreal has higher property and income taxes which negate some of the difference, but it’s still way more affordable than any other million+ city in Canada.
French-speaking Canadians do not have the fetish for home ownership that their English-speaking neighbours in Canada and the US have. They simply will not buy if the payments are more than renting. Perhaps some of this common sense will rub off.
A bit off topic but from an article about why this is taking so long to appear in the media -from an airplane pilot:
Just read the story for the fun of it…wow.
The story of the Gimili Glider is the best,
twelve kilometres above the Manitoba countryside, the unthinkable happens: a brand new Air Canada Boeing 767 runs out of fuel. The 120-tonne, $40-million plane becomes a glider, dropping at over 600 metres per minute with no hope of reaching Winnipeg. Amazingly, the powerless plane makes a successful emergency landing at an abandoned airbase in Gimli, Man. A week later, Air Canada reveals how the newest plane in their fleet could simply run out of gas.
http://underworld.fortunecity.com/mud/283/stories/gimili.htm Is where the whole crazy story is told.
“A week later, Air Canada reveals how the newest plane in their fleet could simply run out of gas.”
For the love of all that is Holy, Don’t tell this story to Marc Authier!! He will feel obligated to blame it upon George Bush (Sr. and Jr.), Alan Greenspan, The Federal Reserve, the Federal Open Market Comittee, The Supreme Court and The Dewey Decimal System. Remember Marc- ‘anything that can possibly be blamed upon the USA should be exploited, even if it makes you look like a slavering, rabid village idiot’. Carry on.
Way to ruin a good conversation about things far more important than your petty politics - idiot
Is Boeing an American company, or what?
I’m sckin wind - sell to service contractors
Why not get one of those easy, overpaid govt jobs?
then you can pay for me, comrade
=cool
Okay, seriously now, what’s the relationship between you two “flats”?
All the “loose marbles” are gonna roll to the lowest point on the board.
If you are laid off are you gonna stay in the most bubblicious areas or “leave town”?
Just another ingredient brewing in what is quickly becoming the “perfect storm”.
It’s gonna get ugly out here in SoCal, of that I have little doubt. I can’t really foresee the timing though, although I suspect we’ll start to really feel it by Thanksgiving.
Don’t know when we will see serious declines. Persons posting on this blog and predicting a crisis have continued to push their “crisis” month back and back, just the way REIC people keep pushing their “turnaround” month back and back. Maybe the whole thing will just be drip drip drip downwards for a long, long time.
A month, or a quarter or two, sometimes even a few years, is not that important in the long term scheme of protecting one’s savings and investing when prices are favorable.
True. We all thought things would implode more quickly,but these things work through the system slowly. A slow bleed is a possibility, but I do think there are some thresholds that will come where changes will be dramatic. ARM resets, bankrupsies, and huge construction/RE layoffs over the next year will all be straws on the camel’s back. He is still standing now, but his legs are definitely quivering.
I think emcee is pretty close about when the first major threshold is crossed. Denial will be pretty much gone by then and enough real BKs on the market that prices will collapse. Of course ,plenty could happen before and after that too.
‘We all thought things would implode more quickly’
Hey, speak for yourself. If you were around in early 2005 most posters here were talking about years and years of turnaround. I don’t do predictions, personally, but IMO this thing is moving about twice as fast as most here thought it would in the old days.
I agree. Sales and prices are much lower than the fudged numbers from the government. They don’t include cashback and other comps. They don’t include cancellations, which have doubled or even tripled from the bubble years.
It really is different this time, though. Real estate has historically moved in cycles, but when the incredibly loose money was added to the equation, all the old paradigms flew out the window.
Bubble deflations tend to have remarkable events through. I wonder what events will be remembered in the history books from this deflation?
Ben, I agree. I’m one of them who thinks RE won’t undershoot until past 2012 but will gradually decline yearly the next few years.
“IMO this thing is moving about twice as fast as most here thought it would in the old days.”
I must admit I have been shocked by the dramatic spike in NOD’s and foreclosures. When this kind of “must sell” product gets forced onto the market, it will destroy the comps. This is already happening in San Diego. Personally, I don’t think this is going to be the slow drip of previous crashes, but instead it will be a succession of big drops followed by a period of slow drips.
Thanks, Ben!
I’ve long been saying this thing will take YEARS to unfold. Also, that the pain would not be felt until 2007 and 2008 (”predicted” this in 2004 and 2005).
Putting it on the record here that we won’t see (nominal) 2005 peak prices for decades — unless there is some kind of MAJOR inflationary/”save the FBs” bailout.
Good point Ben,
I was sloppy to post “we all thought….” Thankfully, we do not all think alike here.
I still think we will seem some dramatic drops, when certain conditions converge. I like IrvineRenters “drops and drips” model.
“I must admit I have been shocked by the dramatic spike in NOD’s and foreclosure”
City of Los angeles listed 2,162 NOD’s and 206 foreclosed properties per Foreclosesure.com.
Long beach, CA listed over 500 NOD’s.
Did some rough calculations and somethng like 1 in 300 homes in city of LA in NOD stage. Also noted that The NOT’s/courthouse sales/bid prices for LA foreclosed properties still overpriced for most houses, especially when they are comparing prices to zillow zestimates , which aren’t worth s**t.
Noticed that Riverside 4Q dataquick default Nos. of 4,528, 181% increase over 4Q 2005,are only 834 LESS THAN THE ENTIRE BAY AREA TOTAL of 5362. Some regions of riverside such as Menifee, Sam Jacinto, Lake elsinore,perris,murrietta, are running 20-30 NOTS/300-500 NOD’s PER ZIP. And yet the auction/REO prices still too high in most cases, though there are a few gems such as 5/3’s listed in MId-$200,000’s. Riverside is literally exploding with foreclores/nod’s, and should be seen as a major RE meltdown region just like Phoenix, S florida, Sacto,ect.
Riverside county, which is classified as part of the IE, is a case study of How to create a RE Boom/bust region. More new housing tracts Have gone up in RS than in any region of Cal. Low Land costs, ample vast fairly flat land, non=existent environmental controls on growth,have lead to a classic spiking IE RE boom:shortly to be followed by an equally sharp bust. The main and only industry has been RE-related building/consruction.
Also, 80% of RS job force are commuters to jobs in LA/OC, which are pocketbook/time wasting killers for RS homeowners. Commute gas costs must run ave $100 week in most cases, which combined with home ownership carrying costs must be the main reason RS default rates per capita the highest in CA and probably in top 10 in USA.
Try $1000 a month in gas for a couple with three kids that I know commuting into OC from the I-15 area of Corona. They are now trying to sell the McMansion and are back in their tiny little house in OC. Not to mention the traffic on the 91 into OC is brutal…I literally wouldn’t be able to handle that kind of mental stress - two to three hour commute bumper to bumper no matter what time of the morning you leave. All this to make a commute that would take 30 minutes going 55 mph.
That is the problem commuting from SW Riverside county, whether it’s from Temecula, hemet,Perris,L Elsinore, corona, riverside, Mor valley, whatever, and going into OC/LA where the jobs are. ALL commuters have to go thru the single bottleneck 91 or 15 fwys which converge in Corona. Have seen equally nasty traffic logjams on the 15 coming out of temecula/Murrieta going into or thru Corona. There is no alternate rte coming out of Riversde into the OC, except if you live way south in temecula.murrieta area and attempt the winding mountain 2-lane rte on the 74 from L elsinore to San Juan Capistrano, which take over an hr just crossing over the Mt hump , and which in event of an accident or car breakdown will leave you stuck deep in the mts in middle of nowhere.
Those timw-wasting fwy bumper-to-bumper sigalert standstills wil eat up gas,basically putting your car at idle speed stuck on the fwys during an accident-induced grinding halt to the mornign/afertnoon commute. This is the real killer for cummuters from the IE to LA/OC, the nerve-racking traffic slowdowns/stoppages which must leave to severe long term health and pychological traumas for IE commuters. No wonder foreclosure rates skyrocketing in the IE.
Prediction: I We’ll see substantial price moves by the end of Q2 in parts of CA. FLA already has. AZ should follow CA.
Ben posts “Hey, speak for yourself. If you were around in early 2005 most posters here were talking about years and years of turnaround”
We here in California are the last egg to get fryed. But the heat is getting HOT…. and yes regardless, I do think this will take years to “unwind”
I do think this will take years to “unwind”
Me too, barring some outside event like an earthquake in CA, which would surely speed things up.
A continued meltdown in the subprime industry, combined with massive increases in foreclosures has got to put some serious downward pressure on prices this coming year. Who knows when affordability returns, but the speculators are going to get roasted.
“I suspect we’ll start to really feel it by Thanksgiving”
That’s about when the data will make it irrefutable. The “Pain” is already being felt by many, the increase in the “Notice of Defaults” show that.
1.5 trillion crap loans to be reset this year and next. It takes about another 1 year to feel the pain for this fools…and another year to live off of credit cards…then game over…so 2011 is when the complete collapse will happen in SoCal.
Stockman,
I think your are correct that the “bottom” won’t be here until around 2010-2012 — and it will stay there, or drift slowly downward, for years afterward, IMHO.
Excellent point, about living off credit cards. Denial and delusional hope to a return of “good times” will be the every day staple of all the FB’s.
anybody has the correct or at least most accurate figure about the amount of rest to occur in 2007. i have heard figure from 1.0t to 1.7t. yes, that is a really big number, regardless, 1.5t is still significantly larger than 1.0t.
yeah i’ve been begging for these numbers for months. all of last year posters were quoting chapter and verse 600B in 2006, 1T in 2007 and 1T in 2008. Now 2006 is in the books, some people must have refi’d into something crazy to reset in 2009… what are the numbers?
Mortgage Bankers Assoc. has some data here:
http://www.mbaa.org/ResearchandForecasts/MarketEnvironment
Mortgae finance forecast with historical data
http://www.mbaa.org/ResearchandForecasts/EconomicOutlookandForecasts
Nothing I found here is a clear answer to your question however. You would have to estimate resets from other data concerning their percentage of use and apply them to the total activity.
2011? Just in time for the boomers to retire! O goody.
“Mr. Graham expects average home prices in the Sacramento metro area to fall between 6% and 8% this year, but believes the market will begin to recover modestly by the fourth quarter, assuming that home builders continue to cut their production.”
Welcome to fantasy land. These guys blew the call when the top was in, yet they speak with such confidence about calling the bottom.
I can tell you that the builders in Sacto have no plans to slow construction. There’s 7,000 unit “master community” being built in Elk Grove as we speak. The fact is, the cost of product for these builders (land + materials) is waaaay lower than the median prices have been. They can build and sell at a profit for years, walking the market down the whole way.
Right, I talk to locals who don’t even notice that building has hardly slowed at all, yet they hope prices will hold. With record inventories, something has to give.
The only segment I’ve seen slow is the high end custom home. The big production builders are going at it. In 2005 Brookfield Homes announced 1,000 plus houses were to be built across a highway from their Verde Santa Fe subdivision in Cornville. But sales died and nobody mentions it anymore, they can’t even sell off the last ten houses. Yet, I’ll bet when they finish at VSF, ’surprise, we have another 1,000 lots!’
As I mentioned on another thread, my email has new BPO (thumbnail valuations of property the lenders are getting ready to forclose on) request every day now. Used to get about 5/month when I have a handful of companies requesting that stuff from me. Now only one bugs me and they are requesting at a rate of one or more per day now!
The foreclosures in CA are getting ready to rocket to a level that will cripple the state. I have no problem seeing 5% of all CA homes in foreclosure at once. No problem seeing 15-25% (or more) of the last 3-4 years of sales going into foreclosure.
This RE collapse will make the one in the 90’s look like a lap dance with a pretty girl.
posted “This RE collapse will make the one in the 90’s look like a lap dance with a pretty girl.”
Well, that’s not too bad.
Rich, a couple of days ago Dude posted some scary DQ data on one zip code in the Antelope Valley, can’t remember which. If I remember correctly, he said sales had dropped about 60%. If such a trend holds, the foreclosure rate could get even higher in some places.
“The foreclosures in CA are getting ready to rocket to a level that will cripple the state. I have no problem seeing 5% of all CA homes in foreclosure at once. No problem seeing 15-25% (or more) of the last 3-4 years of sales going into foreclosure”
I saw that list posted on another blog(Mess that greenspan made or Calculated risk), listing the 4Q foreclosures, %increases, for all Cal counties frm 4Q 2005. Also saw a gragh with the line doing a vertical moonshot trajectory for yr 2006 going into 2007.
Looks like spiking Cal foreclosure rates will be a big hammer slamming down on The CA RE bubble.
- “Schuerman said only 900 people moved to San Diego County over the past two years, while more than 28,500 residents moved out.”
“That’s ‘hard evidence of what the housing situation is doing,’ he said.
What a loser…there are over 900 Mexicans coming into Ca every week.
What a loser…there are over 900 Mexicans coming into Ca every week.
Uh……..make that every day!
Uh make that every hour.
Make that every minute.
One way to reduce the smuggling of illegals in to Cal/USA is to adopt automatic life imprisonment without without parole for smugglers. period. Our Border enforcement policy is a complete joke because smugglers know that the rewards for smuggling human contraband far outweight the risks of capture, an even if caught the ‘coyotes’ are often handed light sentences tatamount to a slap on the wrist.
Regardless if that were true or not, what makes you think they are choosing to live in San Diego County?
I think many people make the false assumption that illeal Mexican immigrants only cross to live/work just this side of the US-Mexican border. That’s completely false. They head far inland away from the borders… for work and added safety.
There’s an estimated 2 million illegal aliens in SoCal and they are breeding like rabbits.
Like rabbits?
posted “There’s an estimated 2 million illegal aliens in SoCal and they are breeding like rabbits.”
They canot afford TV…. poor mom.
I asked Mexicans who worked for me why they traveled over 1,500 miles north and they said there was too much competition for jobs in CA, too expensive, and, as you say, much safer. They went home only once a year so where they lived wasn’t a big deal.
posted “Like rabbits?”
They give the rabbits lessons.
like cucarachas
Of course, for the record, hiring illegals is just that, illegal.
No point in taking pretending to take offense at corporate corruption,i.e. subprime lenders like Ameriquest, when you routinely break the law and knowingly hire aliens to buffer your profits.
Where is El Chupacabra when you need him?
Oh wait, all those illegals are El Chipacabra!
If they all live in those ultra-cool downtown condos with glass walls, where will they park their rusted out Winnebagos and El Caminos?
Yes, high income earning, mobile professionals are moving out to areas (mostly out of CA) where they can live at a standard beyond simply a 20 year old condo with a $3,500/mo mortgage payment.
The only people “moving in” are “undocumented” immigrants and the few superwealthy, neither of whom will be buying 99% of the overpriced real estate throughout San Diego county.
shoot! Why bother buying a house in California and becoming a “resident” when you can be a contract engineer or contract nurse or contract other professional?
http://www.onassignment.com
Addendum: Live in a different state and work in California. Your taxes are lower that way.
new prediction..
remember how rents went up when people looking to buy decided to rent instead?
in the near future many people may decide to buy the cheaper homes now instead of waiting for high prices to come down.. but i think it will be a short blip. then the prices and rents start coming down in earnest. the people who buy homes in inexpensive areas probably will see their property values go down, but now by much and certainly not much in real terms..
soon we’ll see homes in inexpensive areas like certain areas of texas and the south east sell well. (just a guess)
I almost closed on a 4/3 built in 1999 for $60/sf in a very nice neighborhood. Someone beat me to it. It was a preforclosure from an eF Bee. I have a feeling there will be a few more opportunities.
I’d like to see rates go to 9% this year so prices will drop some more. I will buy a house on the cheap then refi when rates drop due to the recession. The best of both worlds.
Schuerman said only 900 people moved to San Diego County over the past two years, while more than 28,500 residents moved out.”
——————————————————————————-
Well, this is going to make for a lot of unhappy “investors” over at the SDCIA blog.
I thought EVERYBODY wanted to live in SoCal? Has the world gone mad? On the bright side, the Great State of California is planning on implementing socialized healthcare for the 30 million citizens and 10 million illegal aliens in the face of this upcoming recession. No problem though, they can just pass a few more bonds and let the future generations worry about paying it off. Maybe California can start printing their own money just like the Feds.
Luckily if you don’t like it here there are 49 other states and 192 other nations to choose from!
“Mr. Jaffe bought the place in April 2005 for $935,000 in a bidding war, and still hopes to find someone who will meet his asking price.”
———————————————————————
Mr. Jaffe is a banker. Remind me not to buy stock in that bank.
This is the real story that has to be told. Economic pressure is just that, pressure. Our history as a nation is rife with events such as this.
On a similar note, I’ve been watching our hispanic population move into the interior of the US for years with no apparent slowing. Now our working class is following in significant numbers. This is a huge story waiting for a reporter to cover it.
Well, this is something new. I’ve been on this large real estate brokerage’s e-mail list for a long time, but I just received an e-mail from them listing new homes all across S. California, in San Diego, San Bernardino, Los Angeles, basically all over, in all different price ranges, “available for quick closing” and “vacant and maintained”. They even have pictures — funny though, they all look like the same home depot mediterranean style home.
“On a related front, the high cost of housing has become the biggest hurdle for employers to overcome in recruiting new employees, said Michael Schuerman, director of research for the San Diego Regional Economic Development Corp.”
“In a 2006 survey of local companies, 90 percent of the employers and 100 percent of the employees identified the high cost of housing as their top local business challenge.”
“As a result, far more people are leaving San Diego County than are moving here. Citing data from the California Department of Finance, Schuerman said only 900 people moved to San Diego County over the past two years, while more than 28,500 residents moved out.”
“That’s ‘hard evidence of what the housing situation is doing,’ he said.”
Let me point out, this isnt’ a small deal in the bubble markets. LARGE employers are getting ready to do some pretty large scale relocations. If you have a project that requires a headcount of 1,000 but only have 600 local and cannot bring in 400 new employees… that is 1,000 jobs that go out of state.
Will all 600 want to move? Nope. But if an upper level slot is available, you move it and offer it as a “carrot” to get good people to follow. Some of the staff will backfill vacancies on other projects. But from what I’ve seen… as long as the destination is half decent, there will be volunteers to follow. Don’t forget fortune 500 companies pay the realtor 6%, moving expenses for a family, 2 cars, + $5k to $15k for “odd movingexpenses” (e.g., boat, art, antiques, etc.). Its a great way for near-retirement employees to cash out.
This has only begun. It will get going in 2007. It will be a flood in 2008. Do I expect much drop in home prices in 2007? Nope. 7% to 10%. But in 2008… watch out. It might take until after the summer (when the relocations occur), but it will happen.
Got popcorn?
Neil
Any rumors/specifics? Employers and where they might be going? No interest in going to CA, but more interested in possibly finding job at the location these cos are moving.
implosion:
Nissan to Nashville (1,000 jobs, complete)
Lockheed: 1,700 where 700 go to south of Denver, CO (400 moved, the remainder “trickle” through 2007), and the other 1,000 to Houston, TX (very few have already moved, it will mostly be a flood this summer with follow on at Christmas)
Boeing: 1,000 to south of Denver (joint venture with Lockheed, above). About half have moved, the rest this summer.
Toyota: Moving an undesclosed number voluntarily to their new campus/factory in San Antonio, TX.
I’ve been blogging on my blog rumors… but right now those are the only definative.
http://recomments.blogspot.com/
Now, non-So-Cal moves are moving a huge number of people to Huntsville Alabama. About 20,000 to 30,000 as part of the BRAC. A few thousand MDA employees from DC to there too. Not to mention just about every rocket or missle producing defense company is relocating employees there.
Austin TX is a favorite too. It seems like every mid-size company I have a friend working at is moving a few people there. It must be half populated with California refugees by now.
But I don’t know the numbers.
Got popcorn?
Neil
In the early 1990s, Hughes in Tucson pulled hundreds of engineers out of California. Not saying that type of thing will happen again with the company (now Raytheon). Big corps are smart to take advantage of other states to entice people to work at least another 2 years in the new state. Executive relocation and all.
I know people who were *supposed* to be part of that move, but “ducked out” to stay in the south bay. That move was supposed to be 3X more engineers than it was, but due to a sudden drop in real estate prices, the Torrance campus of Hughes couldn’t be sold for enough to justify continuing the move.
History will repeat (in more than one way).
Got popcorn?
Neil
“As a result, far more people are leaving San Diego County than are moving here. Citing data from the California Department of Finance, Schuerman said only 900 people moved to San Diego County over the past two years, while more than 28,500 residents moved out. That’s ‘hard evidence of what the housing situation is doing,’ he said.”
Suppose there are 3 San Diegans per HH (close to the truth). Then the net departure of 28,500 - 900 = 27,600 residents amounts to a net loss of demand for 27,600 / 3 = 9,200 housing units. There is part of your inventory increase. And something tells me the 28,500 figure may ignore departure of illegal immigrants whose home construction jobs have disappeared.
P.S. My wife doesn’t believe the 900 figure; any evidence it is correct?
Does not sound right to me either. I would speculate more people are leaving than arriving but only 908 arrivals in 2 years? And how would anyone really know without a census?
I don’t believe 900 either. That would be just over one person a day. Look at SDSU, USD and UCSD just as one example - how many new students arrive every fall? Way more than those who graduate or move to another college, I would imagine.
Students often keep the mailing addresses of their parents. What I’d like to see is dmv records for tracking working residents. Like I’ll ever get to see that data **sighs**
Way more than those who graduate or move to another college,
Um, unless the enrolment is growing exponentially, the number of new students has to be about equal to those graduating or leaving before graduation.
Think about it.
Of course many students don’t change their legal residency. Which is really part of the question. Without knowing where this figure comes from, what it includes (students? illegals?) it is nearly meaningless
“On a related front, the high cost of housing has become the biggest hurdle for employers to overcome in recruiting new employees….
For hospitals here in San Diego, recruiting new docs, and retaining the ones we have, has become a huge problem……….cost of housing is one of the reasons
sandiegoslide,
I’m not suprised. Here in LA after doctor’s get their intial training… they’ll leave to somewhere else. It doesn’t help that the south bay is overserved in the better paying sub-fields (ok, not all. I only know about the fields my cousins are in).
Got popcorn?
Neil
When housing costs are pricing out doctors, a correction is in the bag…
GS, my husband is a doctor and we have been priced out for quite a long time now. The other doctors I know who own homes either bought long ago or have one of those crazy loans. It’s true that some doctors make a lot of money, but the idea that all doctors are rich is just a myth. Now all the money goes to the businessmen who manage health care and pharma companies. I’m not saying it’s good or bad, that’s just the way it is.
And of course most graduate with a mortgage-sized student loan.
We see this happening at all the UC campuses as well. It’s almost impossible to recruit new faculty or administration personnel.
UC is now seeing problems with retaining staff too. In Davis, UCD is breaking ground this spring on a 1000 unit housing development for staff purchases. They’re just sticking their finger in the dam hoping this will save them from the exodus for working class and professional families from the Sacramento area.
I miss Davis. Should have bought the house we rented ‘91-’94 from our immigrant Chinese landlord. His former residence, on the greenbelt, easy ride to campus, 4/3, two fireplaces, garden, hot tub (we brought that in), basketball court. Great landlord, owned huge numbers of properties, free with advice on getting your money to work for you. Offered us the house, but it was like $250k….probably close to a million now. What a great town.
My wife and I are radiologists living in the southeast working in a comfortable academic setting. Last year we thought about jobs at UCLA. I grew up in Socal and still have all my family there, love the weather, etc. The cost of housing and the traffic are deal-killers.
GS,
I’d like to get my hands on that data too.
One thing to consider is that if you are comparing it with US census data, remember that census data is “massaged” before it reaches the public. House of Rep seats are allocated using census data for example.
On the projects we work on (federally sponsored research), we ask repeatedly for raw data striped of identifiers and the answer is always “no way in hell”.
i even think it is the other way around. how can you explain that traffic in san diego county has gotten so much worse this past 2 years. it is certainly because of too many car have been added to the streets and freeways. those cars certainly need drivers to go around.
San Diego has turned in el lay in many ways, the awful traffic being the most obvious symptom…
Back in the day, 20 years ago, it was a sleepy burg and houses tended to sell for about 1/2 of what a similar dwelling would cost in the city of angels~
I remember when Sorrento Valley (ground zero for traffic in SD) was nothing more than rabbit trails. Mira Mesa was had miles of tumbleweed infested vacant land.
You could buy a house in the Coronado Cays (where I grew up) for an 8th of what they are today.
Yeah, as big a bear as I am, I find only 900 to be difficult to believe…and my wife and I would have represented 2/900 during that period.
“Many lenders are growing more cautious about how much debt home buyers should be allowed to take on and more inclined to ask for proof of income. This tougher attitude will exclude some marginal buyers from the market, hurting demand…”
Marginal buyers?? How about first time buyers, who keep the wheels greased for trade up buyers?? How many people have 10% or more to put down, and can actually make a full P+I payment?
Wait until the prices go down and save money in the meantime . I think in the future lenders will be willing to make low down loans if the buyer is qualified and the loan is insured (PMI).
San Diego and Sacramento had the biggest percentage increases in this recent bubble.
Silicon valley didn’t have as much a jump percentage wise and jobs are holding:
link
‘Despite larger payrolls, the index shows that productivity per employee continues to rise, increasing by 4.1 percent from 2005 to 2006 for Santa Clara and San Mateo counties. By contrast, overall U.S. productivity was up 1.9 percent for the same period.” ‘
Productivity in areas filled with high tech industries will rise much faster than that in low tech areas because virtually ALL of the gains in productivity are due to offshoring/outsourcing and ways of leveraging telecommunications to reduce labor costs. “Productivity gains” will be much higher for CA than other states because of the number of employees who now live in other stages and countries. Actual productivity of work on complex projects will actually decline.
Quick snapshot of a typical Naples, FL condo development, actual sold prices. They can spin it anyway they choose, but prices are down 30% this year alone, from naplesinsider
Price $SqFt Date Sold Area Subdivision Building Type
$280,000 $177.22 12/29/2006 1,580 STRATFORD PLACE Villa Attached
$296,000 $192.71 8/28/2006 1,536 STRATFORD PLACE Low Rise (1-3 Floors)
$299,900 $189.81 11/28/2006 1,580 STRATFORD PLACE Low Rise (1-3 Floors)
$300,000 $174.93 12/21/2006 1,715 PINEHURST Villa Attached
$304,000 $192.41 5/15/2006 1,580 STRATFORD PLACE Low Rise (1-3 Floors)
$305,000 $193.04 5/25/2006 1,580 STRATFORD PLACE Villa Attached
$310,000 $215.58 7/14/2006 1,438 COVENTRY Low Rise (1-3 Floors)
$310,000 $180.76 11/8/2006 1,715 STRATFORD PLACE Low Rise (1-3 Floors)
$314,000 $198.73 9/1/2006 1,580 STRATFORD PLACE Low Rise (1-3 Floors)
$314,000 $198.73 8/4/2006 1,580 PINEHURST Low Rise (1-3 Floors)
$315,000 $175.29 6/29/2006 1,797 STRATFORD PLACE Low Rise (1-3 Floors)
$315,000 $175.29 8/30/2006 1,797 COVENTRY Low Rise (1-3 Floors)
$325,000 $205.70 5/30/2006 1,580 STRATFORD PLACE Villa Attached
$325,000 $175.01 8/9/2006 1,857 COVENTRY Low Rise (1-3 Floors)
$325,000 $205.70 5/10/2006 1,580 STRATFORD PLACE Low Rise (1-3 Floors)
$339,000 $214.56 4/12/2006 1,580 PINEHURST Villa Attached
$360,000 $193.86 1/27/2006 1,857 STRATFORD PLACE Low Rise (1-3 Floors)
$379,900 $240.44 3/6/2006 1,580 PINEHURST Villa Attached
$382,500 $242.09 3/3/2006 1,580 STRATFORD PLACE Villa Attached
$410,000 $239.07 1/9/2006 1,715 STRATFORD PLACE Villa Attached
Let’s see…who are all the players, and why hasn’t the rest of the U.S. caught on to all this?
- Greenspan…irrationally exuberant jackass
- Leerah…chief of the confederacy of dunces
- NAR…see Leerah…(CAR…see NAR)
- Home builders…If you’re willing to pay more, we’ll charge more
- Mortgage lenders/brokers…FREAKING SNAKES (by the way these guys are totally unnecessary)
- Sellers…specuvestors in sheep’s clothing
- Buyers…F’d for some time now and beyond, unless they wait 3 yrs
- Banks…idiots, and they’ll pay
- Fannie, Freddie…they will go down bigger than any previous scandal ever before it’s all done (accepting BS loans from fly by night brokers that packaged them in with “more reliable” securities)
Politicians…for being stupid and corrupt, oh, and politicians
Ben…For giving us this forum to spread the word…may we have hope
crush
BTW I can’t believe we have “victims” of “predatory lending”…what the hell is that? sorry, I didn’t realize i was accidentally getting into a half mil in debt? oh, my bad…wtfo?
Well you haven’t mentioned the ever-popular Chinese. They sell us more stuff than we sell them resulting in them haveing the “dollars” to reinvest back here, in say… treasuries and MBSs, keeping interest rates lower.
good point Jim
Here is one for you all to laugh at!
77 square foot apartment, $335k!
http://realestate.aol.com/article/renting/_a/tiny-london-apartment-on-sale-for-335k/20070123110809990001?ncid=AOLCOMMre00DYNLprim0001
Very reminiscent of housing in “Soylent Green”.
Soylent Green is made out of Sheeple!
One of my neighbors has been in the construction equipment supplier business for 40 years. He supplies contractors all over the USA with equipment like cement mixers, etc. When I was walking my dog tonight, I stopped to talk to him and the conversation eventually turned to business. He said, “It’s really bad. Things started going downhill about 4 months ago and now things are REALLY bad. My business is dead.” He said he has contractor customers calling him who he has known for years and asking him for a 90 day grace period because they’ve run out of cash. He said he’s never seen anything like this in the 40 years he’s been in business. So much for Bush and his goldilocks economy. Things could get VERY nasty this year and in 2008.
(At least the caption did not read “Housing Squashes Caterpillar”…)
——————————————————————————————–
Housing Pinches Caterpillar
By Desiree J. Hanford
Word Count: 678 | Companies Featured in This Article: Caterpillar
Heavy equipment manufacturer Caterpillar Inc.’s earnings rose 4.3% in the fourth quarter, helped by higher machinery and engine sales, though a soft U.S. housing market hurt sales in North America.
The Peoria, Ill., company, a component of the Dow Jones Industrial Average, said it earned a record $882 million, or $1.32 a share, compared with $846 million, or $1.20 a share, in the year-earlier period. Revenue increased 14% to $11 billion.
The company also affirmed its 2007 outlook, projecting sales between $41.5 billion and $43.6 billion and earnings per share of $5.20 to $5.70. Caterpillar also reiterated that it expects …
http://online.wsj.com/google_login.html?url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB116981756319688995.html%3Fmod%3Dgooglenews_wsj
Yes, it is Bush’s fault, since he controls the budget. Oh wait, that is congress. So what is congress doing right now to help your friend?
“Fatigued by years of fruitless house-hunting, they ‘can’t quite believe’ that the market has finally turned in their favor, according to broker Linda Harrison.”
Right! Everyone wants to buy a million dollar home, just before its price starts a 40% decline of six years duration…
and employment impact will get even worse in places like MI, where here in Ann Arbor in the past week or so we experienced Pfizer *closing* a huge facility that they just spent millions upgrading, cutting 2500 jobs (plus at least a couple thousand extra in direct temporary and contract work for the facility, and who knows how many in local related ones), *plus* possibly a bunch (1000) of jobs might get lost as Citigroup buys local ABN-Amro Mortgage Processing group…
Things are bad enough here that I saw on a local realtor’s blog someone ask “if I just bought a house but haven’t closed yet should I consider getting out and abandoning my deposit money?” and the answer being, well, if you just bought say a nice-but-unspecial house for 300K, and your deposit was say 10K, you should seriously consider it since you just lost at least that this week in value…whoa!
and see what next spring brings before you consider continuing your househunt. whoa.
This area is seriously hurting. Google seems to be coming, so they claim, with 1000 shitty adwords jobs, hardly replacing the good jobs at pfizer.
And what bodes menacing for *everyone*, not just poor beleaguered MI, is that one of the bits of rhetoric the pfizer chief used in his statements was that this cutting would allow them to consider increasing “outsourcing” of their safety and metabolism trials…that was one of the big activities done here at the local facility.
I saw a pharma site talking about this…how they can have much cheaper safety and metabolism trials in india, which they do already in smaller part, and they can store and manage data in china or wherever, eastern europe for trials and data too.
Outsourcing of jobs we’d not previously considered outsourceable is going to take off I think, and it will suck for people here. Engineers, chemists, biologists…google india shouldn’t be too far off either.
Shel,
why don’t you repost at today’s bit and buckets. It’s important.
Below is a link to a George Monbiot editorial (”The Flight to India”), written in October 2003, which underscores the above point that “…Outsourcing of jobs we’d not previously considered outsourceable is going to take of…”
Monbiot’s basic premise is summed up in his lead: “…If you live in a rich nation in the English-speaking world, and most of your work involves a computer or a telephone, don’t expect to have a job in five years’ time….”
http://www.monbiot.com/archives/2003/10/21/the-flight-to-india/
The idea that our newly unemployed scientists and engineers can deal with this global outsourcing by simply ‘going back to school’ and updating their education and technical skills is laughable. Unless, of course, you count all those new ‘manufacturing’ jobs, cooking burgers at the local McDonalds.
Get into a government (or defense contractor) IT job requiring a security clearance. These jobs can’t be outsourced, and they pay well. That’s where I’m hiding.
Orange County is in desperate need of some real estate haircuts. I’m here to help. Orange County Real Estate Haircuts
OC…good job…I totally agree…something is wrong…how can you make 100k and not afford a house in your neighborhood…fact is i’m having the same problem in Sacramento, although median here is about 150k higher than i could afford (350-400k avg)