A Lot Of People Got Spoiled In California
Money Magazine reports on California. “When Patty Marquez graduated from the University of Minnesota more than five years ago and moved to Southern California, she thought about buying a house. But with prices already sky-high in the Southland market, ‘I was scared,’ says Marquez. So she rented for more than four years. But…she kept thinking to herself: Isn’t owning a home the right thing to do?”
“Last February the school psychologist, who now makes $77,000 a year, took the plunge and purchased a $600,000 duplex, putting 3 percent down on a 40-year fixed-rate mortgage.”
“Since Marquez bought the property in Signal Hill, Calif., just north of Long Beach, home values in her area have fallen more than 3 percent, and they’re expected to drop an additional 9 percent in 2008.”
“Becoming a homeowner hurt her net worth in more ways than one. After she bought the duplex, Marquez’s monthly housing expenses jumped from about $850 when she rented to $3,000.”
“Marquez wonders if her house is mortgaging her future. ‘I don’t want to put a halt to saving,’ she says, ‘but I won’t be able to save as much as before.’”
“Her mortgage is the $582,000 elephant in the room that she can’t ignore. In order to afford it, Marquez had to stretch her loan out to 40 years, fixed at 5.1 percent, with the first 10 years being interest-only.”
“During the initial interest-only phase, she won’t build any equity at all. Plus, once this period ends, her total monthly payments will jump to nearly $4,000, which will make it that much harder to afford her home while saving for retirement.”
“There’s no easy way out of this bind, says Sandra Field, a financial planner in Los Alamitos, Calif. If Marquez were to sell now, she might not get enough to pay off her mortgage.”
“‘This is a transitional period for me,’ Marquez says. ‘There’s a lot of change, but I’m hoping to find my way through.’”
Inside Bay Area. “For real estate agent Dick Gay, selling homes is a tough way to make a living these days. ‘A lot of people got spoiled,’ said Gay, who has seen good and bad times in the industry. ‘But a lot of homes are sitting now.’”
“Gay, a Cashin Inc. agent in San Carlos, remembers the days when every home was rising in value in San Mateo County and many people lined up to buy them. But with home sales down nearly 20 percent this year countywide, lots of real estate agents are moving out of the business, or retiring, he said.”
“‘You see agents who are no longer working,’ said Gay, who sold two houses this year compared to five in 2006. ‘They seek other employment and, all of a sudden, they don’t show up in the office.’”
“The total value of homes in San Mateo County is off by 11 percent through November compared with the same period in 2006, said Rick Turley, president of Coldwell Banker’s San Francisco Peninsula division. From his vantage point, home sales transactions are off 18 percent year-to-date countywide, and 13 percent for Coldwell Banker. He doesn’t expect sales to improve next year.”
“‘There’s a whole circle of money that’s not circulating anymore,’ said Denise Lawrence of All California Mortgage in Redwood City. ‘With fewer houses selling, there’s fewer loans to be made.’”
“The home sales downturn in San Mateo County is dragging lots of people through the mud. ‘There’s a lot of people out of business right now,’ said Geoff Craighead, president of the San Mateo County Association of Realtors. ‘Lots of people came in to get rich in the last few years, and now they’ve got to get realjobs.’”
“Craighead is talking about the shrinking number of real estate agents countywide. But he could be talking about the many industries struggling to survive as home sales on the Peninsula fell by 30 percent or more during a number of months this summer and fall compared to last year.”
“Home sales for the year are down 20 percent compared to 2006, as ‘price reduced’ signs continue to pop up more often in local neighborhoods.”
“‘I’ve lost jobs even after people sign contracts,’ said Bob Monsen, owner of a small construction company in Pescadero that operates on the Peninsula. ‘They still back out.’”
“With fewer jobs around, the competition is brutal. Monsen said he recently put out two bids in the $145,000 range for remodels that competitors won for between $80,000 and $90,000. Monsen is convinced his rivals can’t make money doing the work at those prices.”
“‘We sometimes have to take jobs at cost or less just to keep going,’ he said.” “Construction worker Mario Torres can attest to that. He sees fewer and fewer remodeling and fixer-upper jobs.”
“‘When there’s not much work, it’s tough, because everything is so expensive around here,’ said Torres, who pawned a couple of necklaces last month to pay for his cell phone bill. ‘It’s sad. There’s going to be a lot of unemployed people. There used to be a lot of work around here.’”
“‘Things are getting worse, not better,’ said Suzi Nelson, part owner of Wisnom’s hardware store in San Mateo, which has been in business for more than 100 years. ‘Everybody is so conscious of price and looking for a bargain.’”
“‘Sales are off big-time, and we were rarely ever slow,’ said Ron Miller, owner of B & B Floors in Belmont. ‘Everybody’s in the same boat.’”
“Patrick Reilly of Redwood City, who operates under the name Inspector Homes, scrutinizes houses for buyers and sellers ‘from the roof to the foundation.’ ‘The market’s way down,’ Reilly said. Last year he did 200 inspections compared to this year’s 120.”
“Painting contractor Orlando Trujillo of San Mateo said business is the worst he’s seen in 15 years. ‘Nothing’s moving,’ said Trujillo about homes on the market. ‘People used to paint their homes to sell all the time.’”
“Jim Harris, manager of San Mateo Lumber Co, is afraid that when people feel like they’ve lost equity in their home, they put off paying builders and contractors for projects. That means Harris’ payments come in late, too.”
“‘The subs for contractors — electricians, plumbers and painters — are usually booked in advance, but not these days,’ he said.”
The LA Times. “Lorenzo Martinez, an illegal immigrant who has lived in Los Angeles for six years, has a message for his kin in Mexico’s Hidalgo state: Stay put.”
“The steady construction work that had allowed him to send home as much as $1,000 a month in recent years had disappeared. The 36-year-old father of four said desperation was growing among the day laborers with whom he was competing for odd jobs.”
“‘Better not to come,’ Martinez said of anyone thinking about crossing into the U.S. illegally. ‘The situation is really bad.’”
The Merced Sun Star. “If 2005 was the year Merced’s real estate market slipped the surly bonds of earth, then 2007 was the year it came crashing back. Home prices dropped so far, so fast — a 13 percent decrease in the third quarter compared with 2006 — that Merced led the nation in home value depreciation.”
“Instead of approving new subdivisions, the City Council struggled to maintain foreclosed properties. Instead of enjoying a budget bursting with development-related revenues, City Manager Jim Marshall said this year’s finances warranted a ‘yellow flag.’”
“Residents saw the media catchphrase ’subprime meltdown’ play out in very real terms in their neighborhoods. A record number of homeowners stopped paying their mortgages and abandoned their houses, leaving behind brown lawns and green pools.”
“Building activity slowed to a near halt, with builders pulling 675 permits through the end of November, compared with 1,990 permits for the same period in 2007.”
“Sharon and Mike Southern have reduced the price of their home, which has been on the market since September 2006, almost $30,000. The local housing market has come to a screeching halt in recent months with several foreclosures and new homes for sale.”
The Daily Press. “The decline in the housing market that has caused the increase in foreclosures is expected to drag on into 2008 as the market continues to correct itself, said Carolyn McNamara, a local real estate agent.”
“McNamara said that 22 percent of the listed properties in the multiple listing service are repossessed homes, a number that continues to rise. In the last housing downturn during the early 1990s the percentage of repos reached 60 percent.”
“The hardest-hit community in the Victor Valley is Adelanto with 39 percent of listing being repossessed homes, followed by Victorville with 31 percent.”
“‘People got into homes that had no business in them,’ McNamara said of the high number of foreclosures, adding that the inflated market was caused by a low inventory and too much creative financing.”
“McNamara, who has been doing business in the High Desert for nearly two decades, expects the trend to continue as the market continues to correct itself. What she calls the ‘get-rich infomercial people and house flippers’ aren’t going to make it in this market.”
“Despite earlier predictions that the housing market would recover early next year, the Victor Valley’s growing foreclosure trend looks like it will continue, making for a bleak 2008 in the real estate world.”
The Contra Costa Times. “It has been the year of the subprime mortgage meltdown, tainted spinach, toy recalls and the housing slowdown. In fact, 2007 was singularly lacking in stellar business moments.”
“Here are some examples of bloopers, slip-ups, miscalculations and full-on pratfalls taken by unfortunate companies, executives and financial experts in 2007.”
“We’re leading with this prediction for reasons that will become obvious.”
“Christopher Cagan, who at the time was director of research for Santa Ana-based First American CoreLogic, said the 7.7 million adjustable-rate mortgage loans made since 2004 would not have a significant effect on the economy when the loans adjusted and payments went up.”
“‘It’s unpleasant, but it will not break the economy or the real estate market,’ Cagan said. He made the prediction in 2006, but the true extent of this blooper, as thousands of individuals lost their homes and lending institutions suffered huge losses, became apparent this year.”
Inside Bay Area. “For real estate agent Dick Gay, selling homes is a tough way to make a living these days. ”
Come on, Dick Gay from Frisco? Ben where do you find these stories, I’m starting to think all these people’s names are made up.
Are you mocking my fweind, Biggus Dickus?
“He has a wife, you know…”
“Welease Woger”
ah, yes. The infamous Incontinentia Buttox ..
Richard Gay
Realtor Associate
A licensed Realtor for many years, Richard brings with him years of local market expertise and a strong background in business management. A peninsula native, Richard began his real estate career in 1978, while simultaneously working for Pacific Bell. He retired from Pacific Bell in 1996, after managing their offices on the peninsula for 37 years.
In addition to his strong business management background, Richard has developed years of contacts on the peninsula. He provides a high level of customer service and personal commitment; Richard works hard for the success of his clients, going above and beyond to assist them in a smooth, profitable transaction.
A 35 year Belmont resident, Richard is closely involved in local community activities; he was a member of the Belmont Recreation and Parks Commission for 29 years, is an Officer in the San Mateo Elks Lodge and a docent for Pigeon Point Lighthouse in Pescadero.
When not listing and selling properties, Richard enjoys spending time with his family, swimming, bowling and traveling.
San Carlos
300 El Camino Real
San Carlos, CA
http://cashin.idxre.com/idx/AgentBio.cfm?cid=731&aid=1677
I guess working for Pac Bell gives you the time to do another business on the side. Same place Scott Adams of Dilbert fame came from.
Mr Dick Gay……please accept my apologies and others on this blog who do not condone making jokes about peoples names….who may be very nice people and do not deserve such treatment just to get a laugh. By the way…..I think I’ve met your brother Ben.
BF… you just made me spray my drink all over the screen. Thanks for the laugh.
What about the CAR guy named Gaylord from Long Beach ? Huh? Huh? hehehehehehehe
ROTFLMAO!!!!!
These names are killing me. Mr. Gay should go into business with that Craighead guy ….. they could call it Gay Dickhead Realty
It should have read “selling homes is a _hard_ way” … that would have just put the nail in the coffin.
–
“A Lot Of People Got Spoiled In California”
A lot of people WERE spoiled in California. The fact was simply revealed to the uninformed.
Jas
Spoiled people MOVED to California. They’re called carpetbaggers. Let ‘em move back to all those better places we keep hearing about.
Salad, I got a good story today. A co-worker has a sister that moved out to California. I don’t know if she is a carpet-bagger, a carpet-muncher or a carpet-saleslady. I do know that she bought a townhouse for over $400,000 a couple of years ago. It is now obvious that she will be foreclosed in the very near future.
Get this detail. Her mom and family are telling her to quit paying the mortgage and ride it until she is kicked out. She told her sister she is no longer bummed about the situation. “It’s not like it was a real house.” I bet California could already boast foreclosure “victims” from all 50 states, all 7 continents and every nation known to man. And things are just getting started. I have to admit that this story warmed my heart a little bit. The melting pot is definitely melting fast.
–
“Her mom and family are telling her to quit paying the mortgage and ride it until she is kicked out.”
She needs to be told that?! I am sure that she will come to the same conclusion soon enough. Another 10% decline in neighborhood prices should do the trick.
Jas
Jas,
Its an amazing change of mind to know ‘its ok not to pay the mortgage.’ This is an event that many on this blog predicted a long time ago. But its only now that the sheeple are beginning to understand its ok to wait for spring before being fleeced.
And with many neighborhoods of SoCal losing 2% (or more) a month, your ‘another 10% decline’ should be realized by summer.
Got popcorn?
Neil
Considering the difficulty of tracking down the title to the MBS or CDO it might take even longer to get kicked out.
That should contract credit even more and push down prices further.
The losses should be staggering next year.
NYCBoy, usually I think you’re a snarky old guy, but “carpet muncher” made me laugh out loud.
What the heck does “snarky old guy” mean? Do I really want to know?
“Curmudgeon” is a close substitute.
Thanks for sharing, NYCityBoy. I don’t mean to sound so cranky, but I get tired of folks piling on my state. As another poster pointed out, the population of San Jose alone is larger than all of North Dakota (or was it South Dakota?). And as a percentage of our population, California’s problems– economic/political/ cultural or otherwise–rate pretty favorably compared to other states. Many of our current problems have been exacerbated by a flood of newcomers who have no vested interest in staying for the long haul. They are so quick to jump ship at the hint of trouble, which is so not the American values I was raised with (in California!). And to go off on a bit of a tangent, I’m a little annoyed with the financially set “I’ve got mine” attitude that pervades this site. Some of us haven’t perchance selected careers (or spouses) that offer the big bucks that some posters seem to enjoy. And when one person in particular stated that my sister had a sense of entitlement because she was disappointed that she didn’t get a holiday bonus, that really pushed my buttons. That attitude reflects an ugly anti-worker undertow. She and her coworkers were expected to pony up for a gift for the bosses, and not to say that gift giving is a quid pro quo, but there is an understood practice in most corporate offices that employees forsake a higher salary with the incentive that at year’s end, if the business is doing well, employees receive a bonus using a formula based on their salary. Getting paid for work is not an entitlement, unless you believe in a feudal society. There are FBers out there that were greedy, foolish, stupid, or otherwise, and I gladly participate in that discussion here, but lumping my sister into that lot is really unwarranted.
SaladSD, Hi, I am the one who suggested that being bumed for no bonus was a sense of entitlement. But that’s my udgement. Let’s look at it this way: Is the business doing well ? Better than last year ? Is your sister and co-workers more productive than competitors’ workers ? I am not anti-worker. I myself am a worker. I am also like many us subject to the economy and its variables. I did not get a bonus this year. I am very glad given the enconomy’s direction glad I still have I job, though my work is not directly related to housing. It’s nice to get a bonus. And nice to expect better income / things year after year. But life does not always work-out that way. Many of us in the country (possibly me included at times) expect more, more, more. And it’s this sense of entitlement which has fueled so much fiscal irresponsibilty on a person level and society level.
Thanks for responding. I guess my point is that corporate America and stockholders expect more, more, more, and people who work often are considered obstacles to profit rather than active participants in creating wealth. Yes, her company DID do well this year, and it is a sad day when people who rely on income from working, rather than moving dollars around and making money from investments, have to feel thankful for just having a job.This is where we were hundred years ago. And it’s curious in this environment that income disparity has become worse than ever. The executives/board members are self-dealing and breaking the relationship between work and compensation. When a CEO gets a bonus after a disastrous year for their company (just to keep him happy…and why?) you know there’s something larger afoot. And this sense of entitlement you address is a symptom of a very successful campaign by corporate America to encourage people to “Just do It” to enhance their bottom line. Not saying that folks aren’t responsible for resisting the siren’s call, but there seems to be a debt dealer on every corner these days, and no one wants to be held accountable for their actions, which is an attitude which trickles down from the top.
Salad, I couldn’t agree with you more. People who walk around feeling entitled to the good life without having to work for it tick me off as much as they do anyone. But it’s a f*cked up world where people get taxed more on earnings from a day’s work than on earnings from making good bets on the races (stock market). The capital gains sham really burns me up.
“She told her sister she is no longer bummed about the situation.”
Almost done with the five stages of grief.
Just read about Florida, so many foreclosures that people are hoping to go a year without paying. If that happens expect delinquencies to absolutely go nuclear.
Dick Gay?
Ben, you have GOT to be kidding us. What kind of filter are you using to hunt down these names?
I knew you guys were going to blame me for that one. If you have a problem, I suggest you contact the NAR president, Mr Dick Gaylord.
No joke, someone at our work, Rhonda Pleasure, married Steven Colon. They hyphanated their last name…
I think I just threw up in my mouth.
Too bad Rhonda didn’t marry Dick Buttkiss.
There used to be an NFL player named Harry Colon. That sounds uncomfortable to me.
My Dad’s name is Harry House. We like to say he’s well insulated.
you have got to be kidding. Oh wait. google “NAR President”. You are not kidding. whowuddathunkit? think i met dick gay overweight airline pilot cousin, Enola.
d
First, I’m thinking: being a school psychologist isn’t such a bad job! Next, I’m thinking: I make a bit more than she does, and I know well that $600,000 is way out of my price range for a home. I realize that many people has their perspectives distorted by the wild market, but where did anyone get the idea that taking out a $582k mortgage was a good idea for someone with a $77k income?
But…she kept thinking to herself: Isn’t owning a home the right thing to do?”
How did a psychologist fall hook line and sinker for the psychological pap of the NAR?!?
In 1990 I bought a $96,600 house and my salary was $35,000. 8.5% interest. The real estate agent refused to show me higher priced homes and said I could not afford them yet, but should move up in a few years. I listened. My realtor was not trying to do shady deals. My mortgage company did not try to do fraud on me. This was 5 years after I got my BA degree and the same year I got my MS degree in Computer Science. Why haven’t the recent crop of college graduates been educated about the 2 and a half times income rule when it comes to getting a loan on a house?
Uh, that would be due to most of those doing the “educating” not having much common sense themselves.
All you have to do is look at the average person receiving an education credential these days to determine what’s wrong with our system of public education. I wouldn’t sit next to any of them for an hour in a Cessna. They don’t think quickly, they don’t have common sense, they don’t have any instinct…a lot of them just aren’t very bright.
Most of these “school psychologists” are women who have known nothing but daddy’s paycheck all their lives. I know two of them right now, neither of them have any real world experience with difficult situations, but both have had everything handed to them by their parents–education, houses, cars, etc. Interesting that the people with no problems–not because of their own actions– are the ones telling others with problems how things should be.
But, $77,000 seems awfully high for a starting school psychologist. Leave it to California’s wastefulness…Just like the $110,000 for a prison guard or $100,000 for a nurse. The salaries of these public servants in California are just incredible compared to other states.
These school psychologists are so used to pissing people’s money away that there is no way they can have any concept of the value of a dollar. According to these twits (typo) all kids have ADD and all parents should be locked up for child abuse. I hope she chokes on a ham sandwich.
But, $77,000 seems awfully high for a starting school psychologist. Leave it to California’s wastefulness…Just like the $110,000 for a prison guard or $100,000 for a nurse. The salaries of these public servants in California are just incredible compared to other states.
Other states don’t have housing that costs as much as CA. $1500-1800 for a 1 bedroom?? No where but CA and NYC.
Want the staff? Pay enough so they can live there. It is simple as that.
Odd - no one ssems to think it outrageous when a basic computer techie makes that much and unlike a nurse, they are not holding a hypodermic needle in their hand which if they get the drug or dosage wrong can kill or maim someone.
NYCityBoy…you sound bitter. Care to share your feelings?
I can’t believe nurses make 100K in California. Doctors only make 120K, with about 3 times as much schooling.
Yeah, do share. Tell us how your mommy quit breast feeding you at the age of 12 and you still haven’t gotten over it
“NYCityBoy…you sound bitter. Care to share your feelings?”
No.
I’ve never been to a shrink and never will. Psychology today is merely the practice of excusing people from their stupid and reckless decisions. Life can be hard. A good kick to the pants solves most problems.
Doctors only make $120K? Yea right.
Well, I guess it was only a matter of time before my (future) profession got the hammer. The list seems to grow by the day. And as with any profession, a bell curve pretty accurately represents the quality of service. (Maybe that should be a weekend topic: what profession is not largely populated by incompetent boobs?)
The vast majority of school psychs wouldn’t have the expertise to diagnose ADHD (ADD is not a medical/psych term). We’re generally trained to diagnose learning disabilities and that’s about it. (I’m getting a PhD, which will add to my responsibilities considerably.) But, yes, school psychs, IMO, are generally under-trained for what can be a pretty important job. Many graduate with a two-year degree that essentially confers an ability to administer IQ and personality tests. In other words, you’re a psychometrician. Yawn. In fact, someone above had mentioned that the psych would be counseling kids. It’s possible, but most school psychs don’t spend a lot of time doing that. For ADHD, you’d really have to go to a psychologist. (For complex reasons, even at the MA level, school psychs are called psychologists, much to the dismay of the American Psych Assoc.)
As to the abuse part, I don’t know, NYCityBoy, I generally appreciate your comments, as you often make me laugh, but that’s something I hope people take very seriously. Unfortunately, all that stands between continued abuse and some form of intervention is a teacher or school psych. From my experience it seems to be something people take very seriously.
But, as stated above, mediocrity generally reigns, and I certainly am not going to defend school psychs who aren’t well trained and motivated to do their job well. As a matter of fact, I had been leaning pretty heavily toward child psych when I took a job in a school and saw how vulnerable these kids were to a lot of misinformed and incompetent teachers and shrinks.
Anyway, hammer away, I thought I’d just clarify things.
^ What he said.
My wife is a school psychologist. The salaries continue to climb because the requirements for the license continue to grow. It’s like 1200 hours of interning now, which often goes unpaid.
The APA agreed in the 1980s to allow the practitioners with a master’s to be called a psychologist. I’m unsure why they are bent out of shape now, except perhaps because their members with Ph.D. are becoming more and more unemployable due to overproduction, and they’re jealous people with a master’s are earning decent wages. I’ve read their proposed change and I doubt it’ll get changed. Honestly my wife doesn’t care what she’s called (psychometrician would be fine) as long as the pay is the same.
Some districts have their psychologists do an awful lot of counseling. The Los Angeles County Office of Education certainly does.
Incidentally, $77k is exactly my wife’s salary.
She totally agrees with everyone here that there are a lot of crappy psychs, but districts are desperate for them, and the state of california makes the rules on the qualifications for the test. She’s NASP certified, which gives a little more credibility.
Ya’ll can hate if you please. But it’s a good profession and she enjoys helping learning disabled and emotionally disturbed students get through school better so they can go on to be productive rather than live off your tax dollars. I’m proud of her because she saw a career she thought would be enjoyable and she worked her ass off to get it.
CCC
I have come to the reluctant conclusion that if you can find a single person involved in public education in a non-teaching position who is no more hysterical and no dumber than the guidance counselor in “Orange County” (the one with Colin Hanks and Jack Black), you’ve found the cream of that particular crop.
When I’m king, the first thing we do is fire every single administrative drone, and then hire one decent private-sector office manager and one good private-sector secretary to do the work of ten of the people we just sacked.
When we lived in Texas, my new doctor talked to me for about ten minutes and was fairly sure I had Asperger Syndrome. Since about 99 percent of all the unix admins I’ve ever known have it, I’d say he was probably right. He immediately wanted to put me on a bunch of medication, saying “people will like you better”, to which I replied that I didn’t give a shit if people liked me or not. I’ve gotten rather used to having all that horsepower at the end of my fingertips and it’s been my experience that the only people who want to take it away are those who don’t have it for themselves.
It’s more important to have my facts correct than to be popular. I believed that as a child and I believe it today, as an adult and IT professional with a degree, fifteen years professional experience and more certifications than I can remember.
The reason I bring this up is because school psychologists and other types of bureaucrats have a tendency to be go along-get along types of personalities. They also tend to be female and they tend to be liberal. I am none of those. If and when we have a child, he/she will be raised to have the facts correct, to think for oneself AND THEN to get along with the crowd. In that order. I don’t want to raise one of those long haired, body pierced sixty-six percenters we hear so much about. And I won’t.
People were selling home loans out of cars, that’s why.
I sure wish I could argue, but saw an ice cream truck one time, (yes, in CA), with Mortgage Info and his number on the back.
When I was a kid the ice cream truck used to buy hot 8 track tape decks off the thief’s and deal drugs out of the truck (bussiness within a bussiness wink wink) while the ice cream driver cruised down the street with his girlfriend in the truck playing Led Zepplen on the PA system, everytime I hear Dazed and Confused I just laugh man those were weird days in So Cal.
I had a “trust fund baby” roomate in college from Nor Cal who would sell drugs as a summer job working as a security guard in one of those guard houses right outside a gated community. Easy money, drive through drug dealing! Sell nose candy to the adults and weed to the kids.
Nothing fries me more than the misconception that Doctors, most notably General Practitioners, DO only make about $120-150K per year. Don’t believe me, do some freaking research. The days of G.P.’s (Doctors) making “big bucks” are long gone.
When you add in the costs of malpractice insurance, and the payments from the evil freaking insurance companies that pay 10-25% of the actual costs to provide care, G.P.s make LESS (per hour) than nurses. IT IS F*ING INSANE.
If you don’t believe how little G.P.s make, do some research. The do only make $120-150k per year, IF they can collect the fraction of $ that they bill the insurance companies.
This is the reason why MANY general practicioners are either thinking about leaving the practice or have left the practice. It just doesn’t pay, and doesn’t come even CLOSE to compensating for all the sacrifices and MANY, MANY years they lost in medical school.
Then to top it off, along comes a nurse right out of college, that has little education (comparatively speaking), and with any amount of overtime, MAKES MORE than they do, with very little of the responsibility that they take on.
Yeah, this is true. I’m told the very lowest paid are pediatricians due to the insurance costs. Our family doctor is a very open, cool customer type of personality and she says she’s just making it with her kids and her mortgage.
I went to high school in Michigan during the height of the I, me, mine Reagan years. Senior year we were all required to take Home Economics. The one thing they stressed and tried to pound into our heads was debt load. We learned how quickly you could get into debt with house, car, credit cards, how difficult it was to get out of debt and what debt and financial strain can do to a relationship. Granted, most of us didn’t give a shit at the time, we were more concerned with scoring beer and/or condoms, but it stayed with me. (the education, not the beer and condoms) I wonder if things like this are still taught in high schools.
My understand is that for the most part, it is not unless your child attends private school. This would tend to be supported by the incredible number of people I see making what to me are stupid mistakes with regard to personal finance.
Yes, I had some very similar lessons taught to me. We lived down the street from a couple who became like a third set of grandparents, who also made a lot of money during the Great Depression and then during World War II working in the defense plants in Ohio. I tell my wife that I had a post-secondary education [b]before[/b] high school graduation…from the College of Ed and Tillie.
RE: How did a psychologist fall hook line and sinker for the psychological pap of the NAR?!?
And she’s not just “any” psychologist…she works with kids. (snicker). How come in the 60’s I never had access to a full blown bono-fide SCHOOL PSYCHOLOGIST?
–
They are not good at their own psychological problems.
Doctors are not known for their good health! An accountess couldn’t calculate the actual cost of the condo she bought.
Jas
How did a psychologist fall hook line and sinker for the psychological pap of the NAR?!?
The same way physicists are subject to gravity?
I don’t even know where to begin with this one!
She is paying out $36,000 a year on interest - just interest - with a $77,000 income. Granted the interest is dedcuible but she has to itemize so ($36,000 x .28 which is the value of the deduction) - ($5300 x .28 which is around the standard deduction for a single which she loses if she itemizes) = 10080-1484 = 8,596 less in taxes. $36,000 - 8596 = housing costs of $27404.
$27404 versus her rent of $10200 ($850 a month) sort of makes the decision a complete no brainer.
She is RENTING from the bank for 10 years at a cost of $2283 a month PLUS the real estate taxes PLUS the property insurance.
Her fed income, state income and FICA/FUTA have to easily be nearly $15,000.
$36K + 15K = 51,000 out of $77k. That leaves $26K or $2166 a month for property taxes, house and car insurance, utilities, car payment, food……
THe woman is uttelry clueless. Too band she didn’t take a few more calculus classes and economics classes rather than the touchy-feely psych and childhood developement nonsense.
You are being too harsh.
She waited for four years and saw the prices double against all expectations. Would they have doubled again, she’d made a killing. Now she will probably abandon the house and lose between 15k-30K, but had a potential upside of 20-40 times that amount.
AnnScott, that’s an awesome analysis! Thanks for running the numbers. It’s shocking what that woman has done.
AnnScott, you’re being a little harsh with the numbers:
Granted the interest is dedcuible but she has to itemize so ($36,000 x .28 which is the value of the deduction) - ($5300 x .28 which is around the standard deduction for a single which she loses if she itemizes) = 10080-1484 = 8,596 less in taxes. $36,000 - 8596 = housing costs of $27404.
Actually, since she is in California (aka tax hell), her income tax alone might get her up to the standard deduction level already. And taking that state tax and it’s subsequent effects into consideration:
Hence:
$36,000*(28%+9.3%*(100%-28%))
= $36,000 + 34.7% (That 34.7% being her marginal tax rate)
= $12,490 less in tax she has to pay.
So her cost of the mortgage is actually “only” a mere $23,510 or a bit under $2,000 per month.
Oh wait, add property tax (adjusted downwards by the aforementioned 34.7% marginal rate, but still… Ouch!)
(I am assuming that changes in your Federal AGI play through to your California taxable income. Not sure if that’s the case there, but in most states it is because it’s easier to piggyback off the Fed form.)
Anyway, your premise still holds:
She must be starving on the little take-home pay that’s left over.
And for a duplex in Signal Hill!! Aiiiiieee!
Guess what Miss Patti Martinez! Being a school psychologist making $77,000 a year U seem a pretty smart cookie but U don’t know jack about locational aspects of where U just brought your $600,000 overpriced elephant . SH is a RE catastrophy zone as is the rest of long Beach. SH is entirely affected by what happens in LB, and LB is in RE meltdown, heres the chart:
Long Beach 90802 2 $325 -53.9%
Long Beach 90803 7 $1,052 9.3%
Long Beach 90804 4 $413 -24.3%
Long Beach 90805 17 $360 -21.7%
Long Beach 90806 8 $510 -1.0%
Long Beach 90807 18 $600 -4.8%
Long Beach 90808 16 $566 -3.3%
Long Beach 90810 8 $422 -6.6%
Long Beach 90813 4 $330 -16.5%
Long Beach 90814 7 $750 -3.2%
Long Beach 90815 15 $568 -4.6%
Being here in SCal only five years I guess i can forgive U for being ignorant of locational aspects of the LB/SH areas but i can assure U that U will lose at least $200,000 off that duplex by 2010, not factoring inflation. NO one will pay more than 1100 per month in that area as that renter market for that area is 80% hispanic immigrant. They can easily rent out a full sfh 3/2 in poor areas of LB for $1500 now.
People pay more than $1100 a month in rent in Signal Hill? Are you serious? Isn’t half of Long Beach the LBC popularized by Snoop Dogg? I know the whole city isn’t nice. I can’t imagine any parts of SH being better than the decent parts of Long Beach.
I understand house prices went up a lot, but people actually make enough to pay outrageous rent everywhere in Southern California? I feel the situation is going to get very bad, since none of the housing mess has even started yet.
“People pay more than $1100 a month in rent in Signal Hill? Are you serious? Isn’t half of Long Beach the LBC popularized by Snoop Dogg? I know the whole city isn’t nice. I can’t imagine any parts of SH being better than the decent parts of Long Beach.”
LB is a city of 480,000 souls and 11 zips. 3/4 of that population lives in the mainly slimy ghetto half of LB west of lakewood blvd, which includes SH 90755 . To the west of 90755 is Lb zip 90806, a ghettoized hi-crime area. Southwest is zip 90813,even worse than 90806 . To the south is zip 90804 Rose Park district, one of the nastiest gang-plaged sections of LB.
Only to the east bordering redondo ave is a safe clean industrial zone. SH does have a small cluster of decent condo communites up on the hilltop but lower down the hill into the flats it gets real ugly, with Hi-crime zones and gangs galore. So U see this lady brought in to an asset plunked down in a real nightmarish hood section of SH/LB
BTW. LB has tons of duplexes and triplexes, all of them older squat bungaloo or simple stucco units occupied 90% by hispanic immgrants as tenants, who will not pay much over 1000 for a half of a duplexe. As i have said there are plenty of older smallish SFunits in LB in older declining hoods available to rent for aronnd $1500 a month . She cannot get more than 1100 and is lucky to get that in SH.
BTW LB does not have a single hi-paying private sector jobs category in its entire city, which is the third or forth largest in the state. Nada. Zip. It is all retail or hospitality.
What about the longshoremen? I think they make pretty good money. Of course, that hardly covers the population of LB.
BTW LB does not have a single hi-paying private sector jobs category in its entire city, which is the third or forth largest in the state. Nada. Zip. It is all retail or hospitality.
Wrong.
The Port of LA/Long Beach trade sector is a huge source of well paying jobs. Unfortunately, all the people with those good paying jobs live in other parts of the south bay.
‘This is a
transitionaltranscendental period for me,’ Marquez says. ‘There’s a lot of change, but I’m hoping to find my way through.’I am still trying to figure out the 40 year fixed mortgage when its not a 40 year fixed mortgage.
I think it’s a fixed rate over 40 years, but it just amortizes over the last 30.
“… but where did anyone get the idea that taking out a $582k mortgage was a good idea for someone with a $77k income?”
From the Used House Salesperson, that’s where. They were the ones to tell me numerous times that I could “afford” 5x my income here in CA.
“Market continues to correct itself?”
Hmm. So, when NAR-hyped prices shot up, was the market “incorrecting” itself?
Love that mystery market moving up and down all by itself, devoid of responsibility or any outside influences.
It’s called inverted appreciation. hehehehehehe
She has a 580,000k 40 year mortgage at 5.1%…first 10 years are 1/0.
Area is declining, and she’s a school psychologist in a state with a fiscal emergency. Place is a duplex, and she charges her tenant 1100 for half the house. Money suggests she raise her tenants rent to 1400 and change her 403 choices to Fidelity small cap mutual funds.
Money mag’s bet advice is to spend the next ten years of her life tied to a depreciating asset in a declining market. Then she can start to pay down the principal since it’s a 40 year mortgage. The corporate advertisers clearly direct editorial policy.
77k for a school psych? wow. How long before that job is toast too? CA has some real hard times coming and frankly, we deserve it.
Honestly, I’m surprised she was able to come up with $18k to put down. Many that make more than she does cannot even do that.
It’s surprisingly hard to accumulate wealth. Not so much because of the lack of opportunity, taxes, or some other externality that you can’t control but is often pushed in front of people.
Rather, it’s having way too many opportunities for you to act on, and most of them are bad because they’re peddled by people who are trying to make a living and need your money to do it. And the rest of them stem from your own greed, desires, insecurities, etc.
Even if you’re fairly smart and educated, it’s a never ending flow of bad financial opportunities. The chances that you’ll eventually bite on something is pretty good if people encounter decades of crummy opportunities. You can do the right thing for years like this person might have done if she saved up her $18K, and then in a flash, it’s gone because the lure of home ownership was just too strong. Now, you get to start all over again.
Is it hard to save up 18k on a 77k salary? I’d say that anyone with half a mind towards ‘normalized’ living can easily do that. I made less than 30k working as a paint salesman for 3 years. I saved up 12k in less than two years. That was at the cost of bringing lunch, renting with several other housemates, driving an old car, and eating out maybe once every two weeks.
I really appreciated money because @ $14 an hour, there wasn’t much that it would buy: no new cars, houses, or fancy electronics. Given that situation, people might use basic rational thinking and save.
I now make over three times that amount but I still live much the same as I did before save eating out a bit more and taking a vacation once a year. Living with a lower income taught me a lot. This woman used poor judgment.But the fact that she actually saved money, which is rare amongst people I know tells you that she simply succumbed to group-think.
Her parents probably bought her a condo to live in while in school, and now she wanted to move up to something better.
Comment by jetson_boy
2007-12-26 16:05:15
Is it hard to save up 18k on a 77k salary?
It did say she is only around 5 years out of school. Bet she has some whopping student loans. Minimum qualification for a school psych is an MA and most areas require a PhD. And those degrees are not cheap.
Why can’t people just live at 90% of what they earn?
You make 3k a month after tax.. just spend 2.7k. After a decade or so it makes real money…
Ian, living on 90% of your income and saving 10% sounds easy. What happens when you start that way and in 3 years, prices have rocketed you to spending 102% of your income per month? I can’t downsize my house every year and drive less for my job on a whim. I cannot start feeding my growing children less food each month. But even if I could (probably could), re-adjusting spending to the downside constantly is not mentally easy. If I were to lose my job and we just cut to the barebone, it would probably be easier than that constant bleeding.
Comment by Ian
2007-12-26 17:46:53
Why can’t people just live at 90% of what they earn?
You make 3k a month after tax.. just spend 2.7k. After a decade or so it
Because Ian,
(1) There is a mimimum amount for the necessities below which you simply can not go. Landlords (except for subsidized housing programs) do not base the rent on income and sooner or later, there is nothing available which is cheaper. The electric and heating bills, no matter how much you conserve, will be a certain minimum. Food will cost a certain minimum unless you want to risk malnutrition. And forget trying to fit healthcare to your income; and
(2) Expenses do NOT stay in that proportion and income for 90% of the US have been flat or falling for years. This year alone, I have had to absorb the following increases into the budget:
14% on health insurance (and switching insurers is not an option as I am uninsurable by anyother insurer since my bills for chronic pain management range between $30,000-50,000 a year.)
23%+ on food and households supplies. (Good thing we don’t buy meat - it would have been worse.)
24% on gasoline (Luckily we only drive about 8000 miles a year.)
21% on propane for heating and hot water. (Luckily I sent the perfectly good tank water heater to sit in the garage and installed one of my beloved Bosch tankless water heaters that cut the hot water heating costs by 65%.)
So, yes, for the 80% of the US who do not have incomes above $85,000, saving is very very difficult.
living on 90% of your income and saving 10% sounds easy. What happens when you start that way and in 3 years, prices have rocketed you to spending 102% of your income per month?
…and thus impoverishment of the middle class continues. Inflation is raging while the wages are stagnant.
…and then in a flash, it’s gone because the lure of home ownership was just too strong.
Home ownership? Please.
The likely real reason for the majority of these folk taking unwise plunges was them finally buying into the “real estate always goes up” BS. Their real purpose in buying? The expectation of selling it off for a profit later on. Their mistake? Being late to the game.
I SOooooooo disagree. Easy to live on 90% of income and save. I live on about 70% of income always have. People just do not want to save. I drive a 1992 car. I carry lunch to work. I don’t often eat out. Movies typically the matinee. But there are many inexpensive fun things to do. Ian is right after a decade it adds up. I am quite surprised at how much / quickly it accumulates. I have never had a high income. It’s been adequate. I went to grad school but worked full time and and a part time job. Did not want the school debt. Not easy, often not fun to save but doable and well worth it. If I ever buy a house or condo again, will probably pay cash, then live for just taxes, insurance, and utilites, which should amount to my current and relatively modest rent.
I save 50% of what I earn.
it’s not that hard.
Not too hard when you live in Mom’s basement.
I save 50%, it’s not hard if you bust your rear for 10 years and build a solid business. But that means years of scarifice and long 80 hour work weeks. But hey, the payoff is worth it. Sucks to see it being torn to pieces by inflation and falling USD, though. I’ll probably reinvest my life savings back in to my business in hopes of increasing the cash flow because the future looks bleak for my savings.
Well, it’s gone. The article says a sale wouldn’t cover the remaining mortgage. Some investment. Be sure and keep making those payments!
She can always bring money to the table when she sells.
You will need to do that in Cali. because of the State Income Tax “Withholding” requirement…Even if you don’t owe the Tax !!!
She shouldn’t worry so much, the Fed’s are gonna help her freeze her rate so she can still keep making those interest-only payments for the next few years while the value declines some more….your government, helping the little guy (or gal)……
She doesn’t qualify. Thats not a subprime adjustable loan.
Even though it adjusts after 10 years to another rate and she only put 3% in? Isn’t that exactly what they are going to help people with???
Maybe she could become a GFE for a few years (hic).
Looking at it from the other side, the bank or security buyer - isn’t 40 years an incredibly long period of time to tie up your money for only 5.1%, especially with a thin 3% equity cushion against default for the first ten years and the virtual certainy for some period of high inflation in the course of nearly a half century. Why is this loan rate lower than a conforming 30 year?
The only thing that I can say about what you are stating is that this young lady probably had excellent credit, verifiable income, ability to actually make the payment and a small down payment. That was probably the hard part to find in the puzzle that was a Wall Street AAA rated MBS offering. After all you can’t just package a pile of crap and call it a rose. You need some kind of flower to put atop that pile of manure, and this young lady and a few others were the flowers. They didn’t make any money off of her, but they sure as heck made money off of the manure. The problem will be the people that bought the rose bush, only to realize that there was one or two roses stuck into a pile of manure with no root system in place to ever grow.
They bought a pretty flower to look at for a few days, and a pile of crap to live with for years.
because when she bought, it had never been a better time to saddle up to some really interesting long term debt.
try 20% down on 2.5 times income on the purchase locked at 5.1% on a fifteen.
the people who are getting screwed are always getting it wrong at the right time. note FB story from above.
“Last February the school psychologist, who now makes $77,000 a year, took the plunge and purchased a $600,000 duplex, putting 3 percent down on a 40-year fixed-rate mortgage.”
No way she will get more than 1100 from a tenant occupying a duplex in SH. I know SH and very likely that duplex is located down in the flat zone off the hill toward pacific coast hwy, which is heavily Hispanic immgrant and low-income area. Lots of gang activity in that area and it is pretty close to LB blighted zone south of PCH along cherry ave. That dupklex wiil drop easily 20% in 2008 or $100,000. She will be so underwater that SHE WILL SPEND 15 YRS trapped in that bombed -out SH hood before she comes out even, and with inflation she losses 50% anyway, assuming she can keep her Gov’t day job, which is another big if .
I’m sure a rent increase is in order but sudden jump of $300 a month is ridiculous and may cause Marquez to lose a long time tenant. It isn’t how much rent you get a month, it’s how much rent you collect in a year. I would gradually raise the rent if it’s seriously below market but would keep it under market for a good tenant.
Funniest thing is that in California, it’s not unknown for middle class neighborhoods to deteriorate to slums within ten years. Location counts.
–
‘Lots of people came in to get rich in the last few years, and now they’ve got to get realjobs.’
From realtors to realjobs? That must be a tough transition.
Jas
From realtors to realjobs? That must be a tough transition.
ROTFL. Oh… all these high school degreed idiots are going to discover that the real world expects a college degree for most decent paying jobs. Oh… if they’re good at sales they’ll adapt and do ok. But the days of six figure salaries? Over.
chuckle.
Got popcorn? I share.
Neil
“‘Better not to come,’ Martinez said of anyone thinking about crossing into the U.S. illegally. ‘The situation is really bad.’
Ben this is a fantastic piece of news!
Maybe they can make a new public service message (in Spanish) stating the construction biz is dead, so stay home.
And along with construction, a lot of the landscaping business.
However, there’s still the farm fields, the slaughterhouses, and the restaurant business. But those don’t pay so well.
Also, the restaurant business is already full up with illegals. Not to mention that restaurants usually don’t hire more people when business is falling off in a recession.
I guess the younger ones could always enlist in the Army and earn their citizenship.
No, enlistees generally need to have either status as a citizen or a ‘green card’.
Other then the resturants, those jobs are mainly in the flyover states which explains the movement from gateway states like CA and AZ into the midwest. This has been going on for a while. The outflow back into Mexico is a newer development.
construction biz is dead, so stay home ?
or, go home….
“‘Better not to come,’ Martinez said of anyone thinking about crossing into the U.S. illegally. ‘The situation is really bad.”
Problem is if there is a halt to a flood of imigrants coming across the border due to recessionary slowdown that will only be till the next boom and then they will come back en mass . Also if large numbers of unemployed illegals decide to return back to their ranchera homes in mexico/CA that will also be temporary till the next US boom. I have known plenty of hispanic immigrants who have taken nice long ‘vacations’ back to the home country as they can live like kings in Mexico with favorable peso/US dollar exchange rates . After an extended ‘leave of absence’ as long as a year they would always return back across the border to work in US. It is/was as easy as our wide open borders allowed.
That is why it is so important that US really tighten border security and put up that fence so illegal alien returnees can’t just simply waltz across the borders with each US economic boom/bust cycle.
Illegal crossings down in San Diego:
http://www.nbcsandiego.com/politics/14926777/detail.html?rss=dgo&psp=news
Just get Ron Paul in to the oval office. No taxpayer money for health care for illegals, no taxpayer money for their legal defense, no taxpayer money for their children’s education. Then they would not enter the U.S. “en mass.”
–
“He sees fewer and fewer remodeling and fixer-upper jobs.”
This was a huge source of jobs in SFV and LA Area, according to someone who was the beneficiary. I haven’t talked to him recently, but someone else who also relies on repair jobs on houses says that we are in a deep recession.
Jas
There’s seriously a realtwhore named DICK GAY in SAN FRANCISCO? :O
“Lorenzo Martinez, an illegal immigrant who has lived in Los Angeles for six years, has a message for his kin in Mexico’s Hidalgo state: Stay put.”
This mirrors what we’re seeing; first generation hispanic children leaving our study because the families are here illegally and are going back across the border. This is in the Sacramento area.
–
“‘Better not to come,’ Martinez said of anyone thinking about crossing into the U.S. illegally. ‘The situation is really bad.’”
I have said in the past that a depression will take care of the illegal immigration problem, one way (not coming in) or another (real enforcement).
Illegal Immigration Bubble Burst coming?
Jas
Yes, it’s hard not to imagine a large backlash against both legal and illegal immigration once unemployment numbers start climbing. Undoubtedly the farmers will be delighted now that their source of cheap labor is returning.
I’m dating a teacher, and have come to find out that a good percentage of illegals take their kids back to Mexico for the MONTH of Dec. Naturally they fail their classes. Its accepted and the school district tries to have as few school days as possible in Dec for this reason. Less kids = less money. This is in the OC
I’ve never been to Mexico. Is it as easy to slip back into Mexico as it is to slip out of it? Or do you just go into some immigration office with your family and tell them to deport you? Can these people take their belongings back with them? Do they hide a realtor or two in their van that is looking to get out of a sticky situation, sort of like people trafficers do on the way up here? Maybe take their Mortgage Broker, against their will, who mislead them back to the old country to work off their misdeeds? Sort of the indentured Servent theme all over again, but in reverse.
Hi Ken - it certainly is. You would be shocked how porous the border is. They can easily just drive a van back into Mexico if they choose to. An old high school buddy of my Dad’s had a few day laborers working for him on a job or two. They told him one day that they had been deported over the weekend and were back to work on Monday morning at 8 am, no problem at all.
Is this a trick question or what?
If you’re a Mexican citizen, you take a plane, car, bus or walk in. There’s no need to “slip” past anybody. Of course if you’re an illegal Guatemalan, you’ll be in plenty of trouble (the Mexican immigration authorities aren’t as nice as US).
Yes, of course they can take whatever they want back with them if it’s OK with Mexican customs.
The border checkpoint at mexico when ive been there consists of 5-6 cops standing around watching as cars go by at 40mph.
I parked my car on the California side of Tijauana a few years ago and simply walked across the border with no interception by anyone, no questions, hardly anyone going that way, and proceeded on foot to “Avenue De Revolucion”. Had to deliver some belongings to a foreign gal that I had to leave behind - she could not come back to the U.S. (I gave her $400 in cash and put her up in a hotel. Enough money for her to call someone to get her out of Mexico to Brazil, or whatever. Her free will).
It was always the economic advantages that brought them here. Most Mexicans would prefer to stay in Mexico, most Nepalese in Nepal, most Finns in Finland, most Americans in America. In the coming New Depression, many illegals will just go back. Some will try gangs, crime, and poverty before that; but, once the easy money dries up like it has, the exodus starts. There’s no place like home, even if your home is in Mexico.
I worked in a lumber supply yard for several years. During the whole time, we always had a block or two of day workers sitting around. They never caused any problems and were generally pleasant people. That was 4 years ago. A month ago I went to pay the place a visit and say hello to everyone I used to work with. The day workers spanned for 7-8 blocks and even spilled over into another neighborhood. It was astounding. Nobody was getting picked up either. It must be difficult for people who’ve come from another country only to find work becoming increasingly difficult to come by.
Illegal immigration is a huge issue that the state has let go unchecked for way too long. But in regards to the workers, I met many and most had a way better work ethic than any of the worthless lazy people I’ve known over the years.
Once social programs are opened to the illegals, do you think they will work as hard? Also, how many “employers” go to the lower income US neighborhoods to offer work to the Americans? Probably not many. If they are employing illegals they don’t need to fill out all of the paperwork, risk workers comp for danger, and risk having the employee know the laws and complain when they work more hours than they are paid.
–
The Merced Sun Star. “If 2005 was the year Merced’s real estate market slipped the surly bonds of earth, then 2007 was the year it came crashing back. Home prices dropped so far, so fast — a 13 percent decrease in the third quarter compared with 2006 — that Merced led the nation in home value depreciation.”
Yup, Merced sure leads with 36.4% decline from the peak in June 2006.
Jas
Merced should fare the best of them since (by golly) they have the newest University of California campus. I’m half joking here. I grew up in Fresno and am in tune with the Valley economics. Yes, it’s still primarily farm-based, and that’s the 800 lb. gorilla. The big business there before this real estate bubble has been agriculture. And it’s now returning to that role. The biggest employer there: agriculture. The most amount of jobs? Minimum wage farm laborers. The natural unemployment rate in the San Joaquin Valley has been European-style. That is, over 10%. This is because it’s seasonal labor. The Valley has been in a deep recession for several decades prior to the real estate boom of 2002 to 2005 there. I won’t be surprised if the first area to get the 50% haircut since 2006 in the U.S. will be in the six county area (Fresno, Madera, Kings, Merced, Tulare, and Kern).
UCMerced really hasn’t taken off like they planned.
When UC eligible student have their choice of beachs in La Jolla, Santa Barbara, Santa Cruz, and the academics/sports of Berkley and UCLA, I can’t imagine why they are shunning Merced…
Hey you missed UCI. As an Anteater the back of the school bordered the city of Newport Beach. Kind of where Blizzard Software recruits from the campus. =) I would rather go to Merced than Cal State LA or most of the other Cal States.
“The natural unemployment rate in the San Joaquin Valley has been European-style. That is, over 10%.”
I call strawman.
I think I would prefer to live in the actual Europe.
peak was in Aug of 2005
surely an expert like yourself must know this
The inside Bay Area story is a real eyeopener. So much for the “bay area being different”, BAHHAHAHAHAHAHA
–
Crispy,
There are two Bay Areas, one made of Scam Options millionaires and the other made up of the rest who must put up with them –
“Upper-end home sales have carried us,” said Rick Turley, president of Coldwell Banker’s San Francisco Peninsula division. “The lower-priced homes are taking a deeper toll as we go forward.”
Jas
When do the option scammers start to fall,never, APPL at $200, GOOG at $700, ugh…
–
Never say never. Just wait for a year or two.
Jas
We are not speculator’s, and obtained an O/O 4 ARM in 2000.
Yes, we knew the product, and used it as any wise one would.
We paid the principle off so fast (as was the plan) that the bank president called us personally and asked if we wanted to extend the plan…er…NO.
What’s the point? These products are great. The sad part is most do not know how to use the dang things!
Please, someone tell me how to protect the stupid from themselves!
Ya just can’t make this stuff up!
Leigh
Forgot to type, “No prepayment penalty”.
First words out of my mouth on any loan - show me, in writing, no prepayment penalty!
Of course. I/O loans are tools for people with cash to pay off the loan, if necessary. It’s crazy to think of them as “affordability products”.
careful Leigh
yer uncle willy might misplace those VFW bingo proceeds on the way to deposit ‘em, and Old Man Potter (bank prez) will sic the regulators on you.
then youll have to call up yer old flame who made good in plactics to bail you out because ju-ju dont hear no more bells and her teacher’s husband is waiting to drop-kick hubbies shot glass @ martinis when he stops by for a snort when he should have been lassoing the moon instead of sending the town’s desperate housewife off to the big city with his last dollar.
Hee Haw !
too bad the bank prez cut the loan up six ways to Sunday even he can’t prove his bank owns the property anymore.
California is in deep, serious debt and the recession has not even bitten yet. All the show-biz hype and b.s and celebrity awe that Arnie can muster doesn’t change the fact that California is going into the hole for $14 billion where the budget is concerned. He can do several things to try and soften the bloew this mess is going to cause. All the usual suspects. Issue more bonds is one. That might sucker in a few buyers but rating companies have been accused, because of this property bust meltdown, of not doing their job and issuing the right risk assessments and issuing downgrades. Arnie might find that some of these ratings agencies might not be so keen to issue fake risk assessments in the future on a state like California where government spending is, and has been for years, way out of control.
Of course, the first line of defense will be, as usual taxes. As much as they can squeeze out of the stable (less fluid) population. Those being the home owners. However, taxes in a state like California which is already over-taxed and where they have Prop 13 which limits tax increases might not work. Increases in the already too high sales tax might backfire as many start to see the writing on the wall (recession) and stop consuming.
Many companies located in California are already looking at different locations, including foreign locations, because the State has it’s hand out day after day, sucking business owners dry and imposing more and more regulations.
The BIG financial problem is of course, California’s state employees. They make too much. The benefits like pensions and health care are far too generous (when compared to other states and non-government sectors) and there are far too many of them.
In a recession, Arnie will start to reduce the numbers. In fact, he will probably HAVE to reduce the numbers quite substantially. The first to go will be those in health care who are non-essential. The psychologists, school counselors, etc. A lot of these positions are high paying jobs and a lot of these peole have bought some of the grossly over-priced city homes. Patty Marquez, the school psychologist mentioned above, looks like one of them. She might find the State of California will make up her mind about home owning if she gets a pink-slip. In a recession, psychologists employed by the State are not in great demand.
The simple truth is, this credit crunch and property meltdown is going to change the landscape big time in many States before it’s over. California is going to have a LOT of union problems in 2008 because workers want pay rises to combat the inflation (which Bahgdad Ben Bernanke denies is happening) but instead find instead of wage increases, they find pink slips being handed to them. This mess will not only affect California but probably every major city in the USA over the next few years and a lot of people are going to get hurt.
The BIG financial problem is of course, California’s state employees. They make too much. The benefits like pensions and health care are far too generous (when compared to other states and non-government sectors) and there are far too many of them.
Why are people always whining about what public employees make? They STILL can not afford even the smallest house in CA. Police are hardly overpaid relative to the cost of living. Math teachers in San Fran can not even afford to rent a 1 bedroom apartment.
The ones who are TRULY overpaid are the CEOs and upper management of private companies when they make 300, 400 or 1000 times more than the median employee of the same business.
very true on the CEO’s being grossly overpaid….but the public pension payouts are unsustainable in some cases….for example cops can retire at 3% x years of service at age 50, collect 90% + pay for 40 + years….state and county governments have written checks they will be unable to cash in the future
A SD police officer recently told me that once a street cop hits age 50, for each year he works therafter his life expectancy diminishes by some substantial amount, due to the chronic stress of the job and daily exposure to hazardous materials. Of course, he has his own agenda, but his argument was that once cops retire, they don’t typically live very long and therefore rarely receive the big pension payout we always hear about.
Amen, AnnScott!!!!
I get tired of hearing how all the workers are over-paid (teachers, cops, firefighters, prison guards, nurses, etc.) when they at least do something useful for society.
BTW, I keep telling those who think these positions are paid to much to join the ranks — it’s so easy, surely they could qualify for the job, no? No takers?
I agree with AnnScott & CA renter. I’ve had to make 911 medical calls a couple of times and truly appreciated the fast response. The Cal police/fire/ambulance who make 6 figures do it by working 60+ hrs and getting overtime.
The pension is a concern but their pay is reasonable for what they do. Plus they don’t get stock options unlike many college educated workers in Silicon Valley.
Add to the list of federal employees. Typically, low level to mid level non-management federal employees (up to 15 years experience) are paid 20% less than in the private sector. Been there 11 years. The cost of living in that town was low, but there was no way (unless I played and won Powerball) that I could afford to live in the good parts of California in those days. I did have good vacation benefits and sick bennies. 10 or 11 holidays per year and 3 hours of vacation time every 2 weeks, in addition to lots of sick time. Hardly ever took sick time off (what a shmuck I was).
Right now, there is NO chance of increasing taxes in CA because that takes 2/3 of the legislature, the Republicans are solid against any taxes, and the districting ensures that more than 1/3 will remain Republican.
A lot of unemployed Republicans will change parties is my guess. They’ll finally realize that the entire economic system is rigged to benefit the top 0.5%. They’ll start paying less attention to gay marriage and more attention to how dividend tax cuts help the elite, while Alternative minimum tax kills the middle and uppermiddle class. With the wave of inflation coming down the pike more and more middle class Americans will be hit by AMT.
Not so. Most Republicans know that the top 5% of income earners pay most of the taxes. Nice try on your spin though. Keep chanting, eventually your spins will drown out truth.
Which means if they can’t increase taxes they will cut funding to the counties , which will result in layoffs and hiring freezes. A few of these counties on the Hwy 99 corridor in Calif. have already experienced both the above.
California has got to stop being a pussy nanny entitlement state if it wants to be viable in the long term.
I had a kid this year. Lo and behold, I discovered that the state would *pay* me not to work to “bond” with my child. I was going to take paternal leave anyway but I had planned on that being unpaid. Then, I found out CA has a “bonding” entitlement called PFL, or paid family leave, that is part of disability or some such. They’ll pay you 2/3 of your income or $800/week, whichever is higher, to *not* work. (And it’s not just for having kids!) I didn’t need it but I applied for and got the paid leave from CA anyway. I have to pay taxes to the state (lots of taxes) so I’d be screwing myself to not partake. But just like welfare, 401k’s, FSA’s, home mortgage deductions, and all the other crap I am totally against it. I am for CA slashing its programs till it hurts, and burning down the entitlement programs.
The PFL is paid for by worker’s comp insurance premiums. It doesn’t really cost that much.
You’re against 401k? Tax-deferred saving?
401k, FSA, and home mortgage deductions are all federal programs, not California.
I would like to see tax code simplification though. There’s too many cases of special deductions that end up being unavailable due to income phase outs, making the marginal tax rate higher than it appears.
” California is going to have a LOT of union problems in 2008 because workers want pay rises to combat the inflation (which Bahgdad Ben Bernanke denies is happening) but instead find instead of wage increases, they find pink slips being handed to them.”
The State public employees unions here in CA are extremely powerful politically and well connected to the mainly left-wing CA legistature. They exert of lot of influence especially out of their Northern CA/ Sacramento/San francisico base. Arnold butted heads against them with his reform packages a few year back and lost. CA unions may refrain from exorbitant increases in salary but i doubt that you see any sizable no of pink slips issued to CA Public Employee Unions. They are really good at protecting their own turf and benefits regardless of How Badly in red rest of CA goes.
““‘Better not to come,’ Martinez said of anyone thinking about crossing into the U.S. illegally. ‘The situation is really bad.’”
we wouldn’t have an illegal immigration problem if the right-wing nuts woke up and realized this is purely an economic issue. we need a huge migrant worker program, guest worker program or whatever else you want to call it. why do we place so many limits on the movement of people? if we had so many illegal cars or illegal t-shirts people would laugh at the law, not the illegality of the good. yet for some reason in a capitalist country we have so many illegal workers, how dumb is that?
whatever happened to markets?
“Why do we place so many limits on the movement of people…whatever happened to markets?”
If President Polk had done what many urged him to do in 1848, and what I think he ought to have done, namely, annex the whole of Mexico and not just the Southwest, you might have a point. Mexico might have evolved into something prosperous and orderly, and free movement of people back and forth would have benefitted each country.
But he didn’t. And so we have a scenario where Mexican elites get to export their social problems, and where American elites (and wannabes) get to exploit cheap migrant labor. Mexico’s corruption and statist stagnation, coupled with the fact that American public services (which are not profit centers) unarguably are pressured by large numbers of poor immigrants, mean that there’s a huge externality involved in the “market” for labor exchanges between the two countries.
They can all come to your house.
At first I thought, OK! She paid too much, but it’s a fixed mortgage and she’ll be able to work something out, like get a roommate, etc.
Then I saw this:
“Her mortgage is the $582,000 elephant in the room that she can’t ignore. In order to afford it, Marquez had to stretch her loan out to 40 years, fixed at 5.1 percent, with the first 10 years being interest-only.”
INTEREST ONLY! Then this really isn’t a fixed mortgage, is it? After 10 years the payment will go up!
What a dumf**k! Since she’s RENTING for the first 10 years anyway (by the terms of the i/o mortgage), and she was only paying $850/month BEFORE, she’d clearly be much better banking (3000-850) = 2150 * 12 months * 10 years = $258,000 by simply staying put. (And she could do better than this if she bought government bonds with the $$$)
(Of course, rents could go up, but then again so can HOA fees, special assessments, etc.)
Sigh. I know *I’ll* be paying for this f**ktard. Either now, or later (because she probably has no 401K savings, she’ll need us to bail her out in retirement.) The only bright light is that I’m older, so I may be gone before she retires.
She is actually a lot brighter than most of the FBs…she has a steady, relatively high paying job. And, by all accounts, didn’t lie about her income on the loan docs. She’ll return the house back to its rightful owner (the bank) before the new year ends. Then, some FB knifecatcher will buy it at 10% less–thinking he got a great deal, and will default soon afterward.
Funny that these same houses can keep requiring bailouts over and over and over again!! Then again, if we just burned them down, then there would be less inventory to move. So, by all means, let the numbnuts in D.C. keep passing bailout measure after bailout measure…we’ll all pay for it multiple times in the end, but nothing will stop house prices from crashing (at least, outside Eureka, CA, that is, because this place is special!!!!!).
She should just go easy on herself and mail in the keys. All she had in it was $18K equity which surely has evaporated by now and then some. That gives her 7 years to save up for another down payment.
Her calculus no doubt assumed 20% annual price growth, indefinitely into the future. So apparently did that of the lender stupid enough to give her a loan with such a low income and downpayment. It is hard to decide who was dumber, actually.
Humbled by the dot bomb, my philosophy this decade has been to hope for 7% annual gain in my investments. I’m one capitalistic objectivist who does not supersize the fries and who drives a Toyota economy car. By not being greedy, one can avoid the unreasonable financial risks and therefore avoid catastrophic financial losses.
Bill stop being Reasonable in the Age of Unreasonableness
now sell everything and put it all on black.
I think most of the F’dBers put it on double zero on the green? They wanted 35/1
The lender wasn’t dumb, merely greedy. At the other end of the FB’s real estate transaction was another FB, the F*cked Bagholder, the one ending up with the toxic loan.
The lender screwed two people and got a nice fat fee for doing so.
The only people that were screwed are the very few percentage of Americans who have no debt, savings accounts, and pay taxes. Nobody cares about these people, the “true victims”.
I’m one of the no debt, savings account, pay taxes guys - one of your “true victims” - and I would never want to trade places with a FB.
I moved to So Cal in March 2005, and my rent-vs.-buy calculus showed that I was better off renting unless real estate prices continued to increase at a minimum rate of 7% per annum for at least five years.
This article is describing (as someone already said above) a classic case of groupthink. She probably had friends who she respected tell her about thier real estate windfall, and they talked her into jumping in “before it was too late.” Remember in 2006 when NAR said “We have reached a permanently high plateau in So Cal real estate prices”??
The bubble was inflated by fear as much as by greed.
She probably had friends who she respected tell her about thier real estate windfall, and they talked her into jumping in “before it was too late.
More likely, her boomer parents probably told her that she will be far better off by being into real estate than by doing an 401k or IRA. Said boomers were once heavy drug users, typically. Umm, I’m 48, so I’m a boomer. I’ve seen many examples of 20-somethings whose parents encouraged them to buy a house. It’s the drugs, man, it’s the drugs!
The problem is that people don’t take the time/want to/or can’t figure these things out. Heck, 258K! Even if she halved that, she would have a nice 130K. That is a very nice home in some areas of this country. Assuming she could get a job 10 years from now and the house, she would have utilities, groceries, insurance (auto, etc.), and retirement and then savings to pay for. CASH FOR A HOME! The thought of it! We can only dream, can’t we? If she could have only figured this out and then delayed the gratification…
Oh well, I know I am asking too much from my fellow countrysheeple.
BAAAAAAAAAH!
‘There’s a lot of people out of business right now,’ said Geoff Craighead, president of the San Mateo County Association of Realtors. ‘Lots of people came in to get rich in the last few years, and now they’ve got to get realjobs.’”
I love that their own paid mouthpiece admits that “realtor” is not a real job.
“There’s no easy way out of this bind, says Sandra Field, a financial planner in Los Alamitos, Calif. If Marquez were to sell now, she might not get enough to pay off her mortgage.”
If it’s such a “bind,” then why did she willingly sign up to it in the first place? This is a bad woman.
The Contra Costa Times. “It has been the year of the subprime mortgage meltdown, tainted spinach, toy recalls and the housing slowdown. In fact, 2007 was singularly lacking in stellar business moments.”
I call BS on this. The tainted spinach breakout was in 2006.
If California does not go along with the Feds (they usually don’t) a lot of the FdBs will owe a bunch of money for mtg relief.What does anyone know???
On a side note—I sell franchises, and the increase in RE agent inquiries and mortgage agent inquiries is at least 200% in the last few months….funny how when I start talking about the hard work and long hours required to establish new business, franchise or not, they seem to lose interest….
Most don’t have the liquid cap required anyhow—seems their money is tied up in “equity”
Well, the nicer communities in the East Bay are starting to take a hit. What used to be 1.5 mill in San Ramon is down to 1.0-1.2 mill. Still a pile of cash for virtually everyone, but Ill probably need to buy sometime in the middle of 2009 so I hope the decline continues.
“Need” to buy? How is that even possible?
Not necessarily need, but we’ll be permanently relocating then, and we really hate moving. Plus the wife and I are both doctors so a $1 million fixed loan on a 500K income isnt that tough to swing.
We’re not necessarily looking for the bottom of bottoms, just trying to make sure we’re not bidding against a bunch of phoney money.
if you make 500k a year, why a loan in the first place?
afraid you may miss out on some returns in the 401k?
this is where somebody, not a doctor, gives me some really good money advice about “home interest deduction”
the notion about a 500k income gettin a loan for a million bucks tells me all I need to know..
you should borrow 1.5 million with zero down, 10/1, no doc.
With a 500K/year income you get NO home interest deduction.
The home interest deduction phases out after $150K through a mechanism separate from the AMT. Here’s the rule, paraphrased from the IRS forms:
3% Phaseout Definition
If your 2007 adjusted gross income (AGI) exceeds $156,400
($78,200 if married filing separately) some of your itemized
deductions are disallowed. The balance of your itemized
deductions are generally reduced by 3% of the excess of your
AGI over the $156,400 (or $78,200) threshold amount. This is
commonly known as the “3% Itemized Deduction Reduction” or
“Itemized Deduction Phaseout” rule. There are deductions that
are not subject to the 3% phaseout rule. These include medical
expenses, investment interest, theft losses, gambling losses, and
casualty losses.
If you AGI is very high, the 3% reduction applies until 80% of the
deductions are eliminated. In other words, the reduction cannot
exceed 80% of allowable itemized deductions.
So if you every know anyone who claims to be high-income and also claims to benefit from mortgage interest deduction, he’s lying about one or the other.
It’s obscene that the government made PMI deductable in 2007 in an effort to “help” FBs, while responsible productive folks get taxed more.
Agreed! You don’t need to buy anything that costs a cool mil. If that is what the costs stay at forever, then rent. Think about that for a moment. A million dollars. Even at a hefty 100K a year, that is 10 years of total gross salary. At 40 years of work, that is 1/4 of your earnings.
For what? A house. Life is too precious and short to be wasting that kind of change on a house. With that kind of money, go see the world, see the country for that matter. Help a worthy charity/cause. For cryin’ out loud, don’t pay for someone else’s retirement/debts/kid’s college fund/etc. Don’t buy at a million unless you are really a millionaire and a million is pocket change.
I too would like to buy a house for $1m. (actually, I’d like to buy one for $1.25m, but nothing’s available!) Sure, it would make more sense financially to rent an apartment. I could get one close to work, sell my car, walk to work everyday. And eat ramen noodles for dinner. Then take pleasure in looking at my brokerage statement.
But why do I go to work every day? To get a better life for my family. Living in a nice house in a nice neighborhood is pleasant. Not having to move when the landlord tells me to is nice. Developing friendships with neighbors and their kids is good.
Obviously many people on this blog put little value in where they live, but a higher value on something else: travel, fine dining, accumulating assets, whatever. And that’s fine. Everyone gets excited about different things. But, many people would like to live in a nice house, nice nhood, and raise their family there. There’s nothing wrong with that either, as long as they can afford it. Someone making $500k can afford a $1m house, so if that’s what makes them happy, why not?
The total value of homes in San Mateo County is off by 11 percent through November compared with the same period in 2006, said Rick Turley, president of Coldwell Banker’s San Francisco Peninsula division
How to reconcile this with Dataquick’s San Mateo County numbers for November, which report a median of $749k in 2006 against $780k in 2007, for a gain of 4.1%? I see such a wide range of quotes, depending on who’s compiling the numbers, that for all I know someone is literally pulling them out of his black hole.
P.S. Check out the chart on the main dqnews page to see what a great “investment” Bay Area real estate was in the 1990s - the median didn’t budget at all for most of the decade.
Er, “budge” at all. Flat nominal prices for a decade, let’s see, assuming a modest 3% annual inflation, that’s a real loss of over 25%. And that doesn’t include the higher carrying costs versus rent. I honestly don’t understand where the widely held belief that you can’t lose buying Bay Area real estate comes from.
From the Real Estate people that’s who….
You forgot.
“It
REALLY
IS
different
here!”
I’ve become worn down by all the news lately…The Bay Area is taking the well deserved hit it asked for. Now for me it is only how long will the decline last and how long after that will prices stagnate. It’s a cycle and the cycle is on the downside right now….how far down will it cycle is the question.
It won’t take long for the gas prices and related inflation to finally take it’s toll on the area. When an area becomes to expensive companies abandon it. All the Bay Area needs now is a strong earthquake to damage the fragile infrastructure to send it over the edge. Alot of people who live here now weren’t here in 89….a quake will be the breaker…nobody will want to risk their money for a very long time after that.
Google will be replaced just like it replaced Yahoo and Apple will never make a computer that sales to a mass audience and be pigeon holed into selling cool little periphrial devices until somebody does it better and cheaper than them…cool fades out.
Paying over $4,000 a month to live in a 50 year-old small house on top of an earthquake fault isn’t the smartest financial decision people have ever made….but they will have to learn that on their own…
The Bay Area is taking the well deserved hit it asked for.
Hit??
Hell, I want it to be pounded and beaten mercilessly down into a bloody pulp.
and in other Clownifornia news, Paris Hilton gets cut out of the will. Didn’t she just buy some little $6M love shack in Hollywood Hills or somewhere like that? Oops!
whatya talkin about chick?
another couple of beaver shots and she’ll be back on the cover of Sherrif Weekly’s wall calender. Tarted up ex-hare apparents are what reality TV is all about..
watchin JAVA meltdown? JDSU cant break out….
my call on CSCO is gettin duller by the day.
Like FXP at $68-70..
oil lookin good, gold soaring, Racking up wins with Westport Innovations…
tea leaves, tea leaves…..sales in the Russel 2k are gonna be down and downer….the carnage of the fallout is now hitting main street, business owners who overdid the boom are fallin on hard times…
sellin Harleys, Buses, anything and everything that is not nailed down is on the block…..people are callin callable loans, hard money loan extensions are getting extensions….this is about the take a shape, and its not gonna be fun, its gonna hurt…..
now, whose hurtin?
Credit card default is the next domino, followed by Commercial Real Estate, followed by inflationary energy and commodities. The pain will be sharp and sudden like a knife cut….the individual does not know they are wounded till the blood hits the floor, and then they see the finger missing.
Credit cards and auto loans are the next to take a hit.
Next are the big corporate M&A debts along with the major corporate and state pension funds.
When the equities also go into the toilet, the convertability will dry up as well.
I dont do this often, but the way the pols are gonna play out after the Olympics has Taiwan in the crosshairs…
uhhhgg, political risk associated with all the emerging markets is getting me from green to orange to red at a quick pace.
cant get any more deflationary, short, scared, not-optomistic…. and Im a long term bull…
Cal has been getting away with poorly built overpriced homes for years, now that it is coming home to roost these so called spolied people realize the gig is up their very very overpriced digs are worth very little , people are actually opening their eyes and seeing is believing and what they see is not very pretty?
There you go again. Replace “Cal” with any hot spot state in the union and your sentence still works…. let’s see, we’ve got Nevada, Oregon, Atlanta, New York, Washington, Arizona, Florida…. Don’t tread on me.
Lets see dateline SFV where 650k gets you 1951 1200sq ft 1 car garage and a blythe ridden drug neighboorhood. Think again about comparing Cal to other states it doesn’t fly, it is easily the most over priced third world state in the Union?
“Marquez wonders if her house is mortgaging her future. ‘I don’t want to put a halt to saving,’ she says, ‘but I won’t be able to save as much as before.’”
You know what’s so sad about Marquez’ debacle? I’ll bet good odds that her duplex is a sh!thole. I see local ads for x-plex’s all the time here in Costa Mesa. Why pay rent when others can pay you rent! Bwahahahaha!
Oops, Atlanta = Georgia
Hey SaladSD,
You’re going about this in the wrong way. What all us natives really need to do when newbies (or jealous onlookers) start bashing California is to agree with them. Yeah, you’re right. It’s a terrible place. They really don”t want to live here. All the sunshine, beaches, mountains, money (and yes, there is a lot of money here), can’t make up for our “socialist” government”, and the fact that we’re the ninth largest economy in the world, right after France, that all means nothing. They don’t want to move here! No matter what, THEY DON’T WANT TO MOVE HERE. Just keep mentioning fires, and earthquakes and floods, and oh, did I mention, THEY DON’T WANT TO MOVE HERE. This is a really important point to keep making, especially this time of year, when the Rose Parade is beamed into millions of snow bound homes, and they see all the sunshine and happy people. Just keep repeating: They don’t want to move here. Then maybe we’ll get the California back that we grew up in.
Trishyla
Don’t worry look at the latest census (12-26-07) Cal flat growth again in a series of flat growths. 37 million people later you still have the same problem, a third world nation that is called a state?
You’re right, Trishyla, I should just sit back and let Shadow7 do all the work for us. He’s doing a good job so far… bring it on!
Redback to expand in San Jose
By Katherine Conrad
Mercury News
Article Launched: 12/26/2007 12:47:16 PM PST
Network equipment maker Redback Networks will hire hundreds of workers in the coming year as the company doubles the size of its campus in North San Jose, the company announced today.
Mimi Gigoux, senior vice president of human resources at Redback, would not specify exactly how many engineers and sales people she plans to hire in 2008. But she noted that the four-building Corporate Technology Center on Holger Way can accommodate up to 1,800 employees.
Redback was acquired by telecom equipment maker Ericsson in January in a $2.1 billion deal announced a year ago. Redback, founded in 1996, is in growth mode after emerging from bankruptcy three years ago following the bust in telecommunications.
Currently 500 people - up from 250 a year ago - work for the company in San Jose. The company specializes in next-generation broadband networks that are used for “triple play” services such as Internet calling, Internet television and on-demand video. Worldwide, Redback has 1,100 employees.
Ericsson’s other acquisitions in Silicon Valley - Entrisphere, a fiber access gear maker, and Tandberg TV, which makes IPTV equipment - will also move to the campus, Gigoux said.