That Spring Rebound? Forget About It
Some more housing bubble news from California. “A total of 47,250 new and resale houses and condos were sold statewide last month. That’s down 13.3 percent from 54,500 for March and down 22.4 percent from a revised 60,900 for April 2005.”
The Sacramento Bee. “Through a long winter of rain and discontent, when home sales plunged nearly 30 percent from a year earlier, Sacramento-area home sellers and real estate agents yearned heartily for a spring rebound. Spring is here. That rebound? Forget about it.”
“In the most explicit sign yet of the continuing down cycle gripping home sales in the Sacramento area, median prices fell again in April in El Dorado, Placer and Sacramento counties, while home sales remained flat or fell behind those in March.”
“April showed more price cutting and still more choices as another 1,028 homes put ‘For Sale’ signs out front. It was the biggest jump in real estate listings since last August, when 1,200 houses flooded the market and signaled the impending end of the region’s five-year housing boom.”
“‘It’s a supply-and-demand market, and right now we have a lot of supply,’ said real estate agent Dennis Colar in Sacramento. ‘Buyers are looking at more things on the market and taking their time.’ Tuesday, one of Colar’s clients shaved $20,000 off his midtown Sacramento home, for sale since February. Another, Ron Rael of Novato, also cut the price on a house he’s selling south of downtown Sacramento.”
“‘The market is definitely in a funk right now,’ Rael said. He is selling to buy houses in San Antonio, he said.”
“In April, both houses were among 11,344 listed for sale in Sacramento, Placer, El Dorado and Yolo counties. That’s the most homes for sale in the region since August 1993. The record is 13,507 homes in April 1992 during the cooling cycle that followed a late-1980s housing boom.”
“Suburban home builders feel the same pressures. ‘People are out looking at projects and saying, ‘Hey, I can go buy a resale so what kind of price can you do?’ said Greg Paquin, a Folsom-based consultant for home builders.”
“Sacramento County’s median sales price fell more than $5,000 in April to $353,750. April’s price remained $18,250 below the county’s August peak of $372,000. Yolo County April’s median $420,000 price remains below its November high of $436,500.”
“El Dorado County saw the April median sales price fall slightly to $449,000. The county’s sales price remains $26,000 below its September peak of $475,000. Placer County’s median sales price fell to $472,500 in April. Sales prices remain almost $30,000 below their August peak of $502,000.”
“Sales of houses, condos, half-plexes and duplexes (excluding new construction) in Sacramento, Yolo, Placer and El Dorado counties from January through April totaled 7,162, down from 10,673 last year. It’s the first time since at least 2002 that sales dipped during the first four months of the year.”
“San Fernando Valley home sales fell for the seventh consecutive month during April and inventory ballooned 142 percent as the market continued softening, a trade group reported Wednesday. Those two factors finally took some steam out of prices with last month’s 9.4 percent gain the first single digit increase since January of 2001, said the Southland Regional Association of Realtors.”
“Last month consumers bought 926 previously owned homes, 18.6 percent fewer than a year ago. Sales have now been under the 1,000 mark every month since last October. That’s the longest period since a 20 months string of sub 1,000 transactions from September 1995 to April of 1997.”
“At month’s end there were 3,660 houses for sale across the Valley, up from 2,147 a year ago. Add condominiums and inventory totaled 4,950 properties, up 162.3 percent from a year ago.”
“‘Builders are offering a lot of incentives, and sellers are becoming more educated,’ said (realtor) Bill Velto in Upland. Velto pointed out that builders are still going ahead with projects.”
“Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. said, ‘There are still too many unrealistic sellers, but it’s pretty clear the frenzy has gone out of the market.’”
‘That’s the longest period since a 20 months string of sub 1,000 transactions from September 1995 to April of 1997.’
That’s one to watch since there are bound to be many more units in the market since that period. How about the guy cashing out so he can buy ‘houses’ in San Antonio? On my foreclosure blog I noted that individuals in that city have the worst average credit rating in the US. Good luck in America’s sweatiest city, landlord! If you sell ,that is.
I’d like to encourage everyone to post a comment at the Sacramento Bee. They get little feedback and an overwelming response might encourage them.
Who cares about the Sac Bee?
Blogs now carry the news and mainstream media reports on recent history.
Sac Bee articles have a much larger impact on the Sacramento market than this Blog does. I Assume the author of the article reads the comments.I was hopping to Bombard him/her with information and or sentimate.
They either listen to us or the realtors.
I will join in your campaign. In the last week I have written to the Business reports for the Bakersfield and Ventura newspapers!
You can even comment on the ads or “real estate press releases.” Watch out Centex! I wonder how long that feature will last?!
Sacramento Land(ing) blog
This is in response to an early discussion I missed due to a conference. Realtors are telling people to hurry up and buy because interest rates are raising. People here argue it is better to finance lower prices while realtors argue for a lower rate. So let’s crunch some numbers on my next home in San Diego. (And I apologize if anyone has done this - been out of town.)
Current: $750,000 home with 20% down ($150,000 cash). 5.5% thirty year fixed. Monthly payment is $3,407.
Three years from now: Housing prices decrease 40%. Interest rates go up to 9%.
$450,000 home with 20% down ($90,000 cash). 9% thirty year fixed. Monthly payment is $2,897. $60,000 less up front, $500 less a month.
Even if interest rates doubled to 11% the monthly payment on the cheaper home is only $3,428. ($21 more than buying today at 5.5% which we can’t get anyway.) 8% interest in a money market on that $60,000 is over $400/month. That seems to cover the $21 bucks a month extra, right? Seems like a no brainer to me.
Remember – if an interest rate doubles the cost does not double. 1% loan on $100,000 is $322/mo.
2% $370
3% $422
4% $477
5% $537
6% $600
7% $665
8% $734
9% $805
10% $878
The 10% loan payment is not 10 times (or one thousand percent more than) the one percent. It’s about 270% more.
Faulty math sucks.
I missed due to a conference
________________________________
Where are your priorities???
SD RE Bear,
It is always helpful when someone “does the math”. Looks like a no brainer to me. And do not forget the change in property taxes. I am guessing that the rate is 1.2%, so taxes on 750,000 = 9000 and on 450,000 = 5400, or a savings of $300 month.
I would like to add that SD RE Bear missed including a couple other things.
First, 3 years of interest on $150,000 at a conservative 5-6% on the $150,000 that is left in an interest bearing account would add about $19,000 (total cash $169,000) in earned money at the end of 3 years when the person decides to buy a home at $450,000.
And if the person puts $90,000 down on that $450,000, they would continue to earn interest in that account on the $79,000 left over. And at a conservative annual return of about 5-6% per year, would add an income of about $5,000 per year.
Additionally, as pointed out there would be a property tax savings.
Additionally, if you buy at $450,000 you will be in a better position financially and ability to find a buyer without going negative on equity. And you would have more flexibility to negotiate a lower interest rate if interest rates drop in the future.
And who knows, you may be able to take that $169,000 and negotiate buying a forclosed property at a much better price, that may have the potential for a positive cash flow, than being saddled with the $750,000 house that no one will buy, nor afford.
I welcome any critiques and additions to my comments
Los Angeles Friends In Deed
How long does it take for a bursting bubble wave to travel from Sacramento to BA ?
Don’t work that way. Every place has a unique combination of issues. Yes, I did just say that every place is different. I haven’t finished crunching all the numbers but it looks like the following factors are at the top: rate of population growth, raw population growth, increasing density, raw density. There are probably others but these so far are screaming SF, LA, SD in Calif, LV, PHX, and Miami. Sacto (plus Fresno and Bakersfield) are almost metastases of these factors.
I’d wager that a rather large factor in the coming months would be perception of future values. At this point in the bubble, psychology may very well play a bigger role than “fundamentals.”
Nobody can be absolutely sure, here, Mr. Lightyear - so careful on that first line of yours.
Agree with above. Who needs fundamentals when you have the herd mentality. The same mindset that drove the price of a house through the roof is going to drag it into the gutter, gold stocks and dollars be damned. It just won’t happen overnight.
How long for the wave to reach the west side of LA? On a lighter note, went to a brokers open (not a broker, just walked in… hehe) for a very nice 26 million dollar house in the hills the other day. Maybe they’ll reduce the price? If they knock it down about 99.5% I might be interested
““In April, both houses were among 11,344 listed for sale in Sacramento, Placer, El Dorado and Yolo counties. That’s the most homes for sale in the region since August 1993. The record is 13,507 homes in April 1992 during the cooling cycle that followed a late-1980s housing boom.”
Per ziprealty the area is now over 13,600 so its actually making a new all-time high as we speak. Not sure where DataQuick is getting their numbers from or why the two differ. Any thoughts?
http://sacramentohousingbubble.blogspot.com shows the buildup of sac inventory.
Never mind. It was 11K back in April, now its at an all-time high of 13,686. The writer of the article is just behind the curve a little.
112 houses hit the market today in Sacramento.
I read somewhere the ziprealty figure includes vacant lots which skews the numbers upwards a bit.
On the other hand, wouldn’t it omit brand new HB homes? And FSBO’s.
Which would mean the actual number of homes for sale is significantly higher than Zip shows, no?
Graph: Sacramento Regional Sales Volume Change (2005-2006)
Rise in prices in Flada…Fagetaboutit
Anyone who has bought RE in 2004 or 2005 has got to be sweating right about now, reading these kinds of articles plus watching their ARMs reset. Laughing hysterically.
Buyers in 2004-2005 are in deep doo-doo. We’ve got people who bought in 2001-2002 looking over their shoulders now. -IF- they bought smart AND they didn’t extract equity they will only see a period of flat appreciation. Remember, the average length of residence was 7 years. 2002 minus 7 is 1995 or somewhere near the bottom. People who bought 6 or fewer years ago should be lucky to live in a home for just expenses for at least the next 6 years.
You mean a house will go back to being a place to live and not an investment vehicle!?!!??! Sign me up!
I believe Mr. Cote was suggesting that a house will go back to being a money pit and a drain on the family finances, and no longer a money tree which perennially bears the fruit of the housing ATM wealth effect.
This article is one of the first I’ve seen that actually mentions that prices have dropped month-over-month, rather than referring back to YOY price INCREASES. This seem logical to me, rather than the other way around, since people who bought last October (or thereabouts) are upside down by 5-8%.
Also, I’m sure this had been a topic, but I hit myself on the head doing some calculations today generally about how a 20% drop in price can = mean that you need a 25% increase to get back to where you once were. It gets worse the more the property drops in value. Duh. The drops hurt a lot worse than the increases help.
That is exactly what I noticed when analyzing increases and decrease percentages.
A 50% decrease in property value equates to having to raise 100% to get back to where the price was. And if the price drops each year for a few years, or more than 10 years in a row, like in Japan, a 10% reduction per year for a few years would be cumulative.
Los Angeles Friends In Deed
Your comment reminded me of an interesting article posted on itulip.com Housing Bubble Correction. According to Ms. Evans it will take 15 years for housing to bottom. I think she is on to something…
Definitely lainvestorgirl….
Dead spring…..
Rising inventories…..
Falling median pricing…..
Climbing interest rates…..
ARM resets…..
Growing foreclosures…ie more inventory…..
Desperate incentives from new home builders…..
Talk about being backed into an ugly corner. Would truly truly suck to be a 2004/2005 buyer who pulled the trigger on an ARM right now.
Time for issuance of “guidelines” are here. This was lurking out there … another key development out there…
Fed chief urges caution on mortgages
By Doug Cameron in Chicago and Krishna Guha in London
Published: May 18 2006 16:41 | Last updated: May 18 2006 23:33
Ben Bernanke, the chairman of the Federal Reserve, on Thursday called on banks to exercise extra vigilance in their mortgage lending, while expressing confidence that the US housing market was cooling in an “orderly and moderate fashion”.
Mr Bernanke said lenders needed to be careful when providing “non-traditional” mortgages such as interest-only loans and option adjustable-rate mortgages, which accounted for 30-40 per cent of approvals last year.
He said the Fed expected to release guidelines for non-traditional mortgage lending in due course. This guidance could result in a tightening of bank lending procedures that would further cool the housing market.
Saying “lenders need to be careful” = CYA.
Taking regulatory action to ensure lenders are careful = quickly sending the cooling market’s temperature down to absolute zero.
Time for issuance of “guidelines” are here. This was lurking out there ….. another key development out there…
Fed chief urges caution on mortgages
By Doug Cameron in Chicago and Krishna Guha in London
Published: May 18 2006 16:41 | Last updated: May 18 2006 23:33
Ben Bernanke, the chairman of the Federal Reserve, on Thursday called on banks to exercise extra vigilance in their mortgage lending, while expressing confidence that the US housing market was cooling in an “orderly and moderate fashion”.
Mr Bernanke said lenders needed to be careful when providing “non-traditional” mortgages such as interest-only loans and option adjustable-rate mortgages, which accounted for 30-40 per cent of approvals last year.
He said the Fed expected to release guidelines for non-traditional mortgage lending in due course. This guidance could result in a tightening of bank lending procedures that would further cool the housing market.
who is dataquick? It’s a company provided all these numbers. see it at
http://www.dataquick.com/dqstory.asp
at bottom of page click on MDA link.
A Canadian company owns dataquick. stock symbol is MDA.to
Ahh, it is nice to see a home bust in the Spring!
On that note, a mailer was forwarded from the San Joaquin Valley (where I used to live) here to Humboldt. It was a flyer from McMillin homes–one of the largest builders in the southern Valley–telling me I could save $20K on any home I wanted in their premiere development in Visalia. They haven’t apparently resorted to putting this desperation on-line yet, but what is interesting is that, even with realtors help, they still have to beg recent property owners (I bought my old home in Visalia in 2002) to consider a new house. Yeah, like I’d really want to purchase now at the top of the cycle, when the higher interest rates would make things even more unaffordable, despite the $20K in savings. Prices everywhere in California need to come down by 40% before I will even consider buying…so I expect that will still be several years.
Oh, another encouraging sign: Humboldt’s inventory is up to 689 (a gain of 7 from yesterday). Keep going, baby!
My favorite quote from the MSNBC Bernanke article:
http://www.msnbc.msn.com/id/12852744/from/RS.1/
“On the issue of risky home mortgages, Bernanke pointed out that the Fed has issued some guidance for lenders and he underscored the importance of borrowers making sure they understand how interest-only and other nontraditional mortgages work.
“We’re not saying you shouldn’t make these loans. What we’re saying is that they be done the right way,” Bernanke told the banking conference.”
Nothing at all wrong with high-pressure selling these loans to ignorant, uncreditworthy fools, and then helping them to “hit the mark” on the income column. It’s just that it should be done the “right way”.
THE RIGHT WAY:
As you’re about to sign away your life on that 50-year NAAVLP to buy your $1.2 million Inglewood crackhouse (a.k.a. “little slice of heaven”), make sure you do the following:
1. Assume the position.
2. Make sure your mortgage broker is wearing protection and has applied a liberal amount of K-Y.
3. Be sure to thank your broker as he slaps your dumb ass on the way out.
Once these loans amoritize expect someone to show up regularly to scr*w ya. You will not even know this person as your loan will have been sold off.
Let’s all bombard Arnold with responses. The folks there in Sac might listen to the Governator. (Or they might burn him in effigy?). I don’t know what to make of the Clownifornia politics. Where’s Gary Coleman when he’s needed? He can flag down CashCall to give the upside down idiot homedebtors and floppers $10K based on trusting them (NOT). He might be in the next governor’s race - paired up against Marey (can you see ‘em bounce) Carey. LOL
HARM - also applies for those winning properties in Compton and Lynwood.
Good point –let’s also not forget all those million-dollar Meth houses in the SFValley, either!
As a CA real estate bear (Central Coast), the reality of the info presented by this thread’s news article snippets has me needing to vent a little. No more imagination is required on the part of us housing bears, not that any was ever really needed. Now it’s obvious.
I’ve only read this blog consistently for about three or four months now (my vote for best name out there is “Oscar de lo Renta”!), but I went short housing (sold my house) and long PMs (gold and silver) about three years ago. I could see the insanity back then, but of course I pulled the trigger early. I never anticipated the abandonment of lending and appraisal standards that would be used to keep the bubble inflated and expanding.
Although I made great money on my home (more than doubled), and I bought the PMs right at their lows, my old home by late 2005 had added another 50% and the PMs were ending a long sideways correction. In the meantime, I have endured a lot of “you’re throwing your money away on rent” type of “friendly” criticism. The PMs had done well by keeping up with the rate of RE appreciation, but I couldn’t believe that RE hadn’t rolled over yet.
Like someone mentioned in another thread today, people just don’t do the math anymore. I am renting a 2800sf 4yo home on a half acre in a beautiful development with lakes and parks for $1800 a month for the last two years. They just raised it to $1925 for what will be our third year. Down the street, the same floor plan, but on a lot that does not border the common park, is listed for $850k. With 20% down, it would cost me $5400 a month (pymt, prop tax, HOA, and insurance) to not be “throwing my money away on rent”. No action thus far on that house after three months, and there are now four others for sale in our “desirable” little tract.
Y’all know the rest of story, but that’s why I’m getting windy here. It has only been in the last six months that the PMs and interest rates have started to really assert themselves while at the same time the housing train wreck, that we all more or less saw coming sooner or later, has really begun to take shape.
News like the articles mentioned in this thread makes the situation almost surreal - let alone knowing there is a train wreck coming, we can now see that the time has passed for the trains to slow down or get on another track. Past the point of no return.
I appreciate Ben’s blog because it was there just when I needed it to get me psychologically over the last hump before the “promised land”. I can see that many of us have been “voices in the wilderness”, pleading for others to either get out of the market, or keep from getting in, only to have the advice ignored.
I consider myself pretty bearish on housing, yet I now truly understand the meaning of “capitulation”. 2005 had me wavering pretty bad. I’m glad it’s over.
It felt like that in 1999 with the Nasdaq and then again in 2004/2005 with the real estate. I felt your pain. Now the voices of reason are gaining ground!
My father in-law works for a title company in SLO. He is telling me they will likely close the office in 6 months if the market does not turn. Fortunately he has some $$ saved.
Latest revenue data from the SLO County Planning Department indicates that April was unusually bad, and May is shaping up to be worse. This is in terms of permit revenues, a forward looking indicator.
I’m sorry that I’m a little “SLO”, but where is that area (SLO)?
San Luis Obispo?
After this sort of confession you must feel really well, good for you.
I love reading this blog for a similar reason: it has been the only place where I could come back after thinking (depressing) about my family living in a rented apartment while making 160K/yr and having over 300K in savings; the ridiculous home prices; the irrational behaviour of home buyers; not wanting to finance somebody else’s retirement; seeing my coworkers living in a decent home out of my reach just because they arrived here three years earlier; I could come back here and have some peace. I do hope this end bad for those FBs.
Pasadena Renter, keep your powder dry. No need to hope anymore - now it is just a matter of time, another year or so.
Keep the job, and keep saving. You will have income and money when everyone else will be grasping for straws.
I’d get that $300k in savings in something safer than greenbacks, however, if you haven’t already
I can’t agree that it will only be one year before it’s a good time to buy. Read Harry Dent’s books sometime. He is predicting a recession from 2010-2013 and has some pretty good charts and statistics to back up his claims. (I am a believer, especially since he published a book in 2004 that correctly identified the month with highest housing prices to be September 2005.) It’s likely that housing prices here in CA will continue to be flat or decline all the way into 2013 or beyond. I could afford a house in 2003 with some stretching; many of my friends bought, but I stayed a renter, and I am not regretting that. I do not think it is likely that I will buy before 2010. I am waiting for prices to drop to the point where 20% down on a 30-year fixed equals the cost of renting the place, and that hasn’t happened here since 1997. Beware the dead cat bounce and hold off on buying until the fundamentals make sense.
Is that you haha?
become a squater/house sitter
live in big homes that are for sale
just pay utilities and $300-600 on top
Good move on selling/renting. Are you still long on PMs?
Thanks - and, still long, yes sir, I remain, until there are gold and silver investment shows on TV, a gold and silver ticker next to the DOW/DOG ticker on the home page of CNN, and I hear someone in line at WalMart talk about buying gold!
An exaggeration, of course, but you know what I mean. I’ll be long on PMs until at least until most of the nuts have been shaken from the RE tree.
At 41, I only wish I knew Buffett’s mantra of “be brave when others are afraid, and be afraid when others are brave” when I was 21.
If BB goes Weimar with the dollar, however, then all bets are off. Best to sell only as much PMs as needed to procure a piece of dirt with a little shack on it. I do have the future of 5 kids to think about.
BB and our politicians have only two ways out of this debt and spending mess they have created for us. Inflate, or repudiate. Inflation hurts the people, repudiation hurts the bankers. Guess which one they will pick?
Russia was smart, when you think about it. In ‘97, they repudiated a significant portion of their debt. Fast forward to today - Putin announces the final payment on their national debt, and that he is ordering their central bank to double their gold reserves.
Then he is pictured holding a bar of gold in his hands, with a smirk on his face. The Russians, Chinese, Iranians, and Arabs all know how to bury this country - just sell dollars, and buy gold.
These are interesting times.
Perhaps a dumb question, but how would a scenario where prices just go flat for a few years be good for buyers? Let’s say I can “afford” a ridiculously overpriced 600k house (3x income, non-suicide financing) But for that $$ I can now purchase a crackhouse, which I don’t want.
Any ridiculously overpriced place I’d actually want to live in costs 1 to 1.5 million. So if prices don’t come down, a ridiculously overpriced crackhouse will still be all I can afford. My income is not going to “inflate” another 30-50%, and my savings, assuming inflation, will buy less right? Prices need to drop. Or I need to embrace a crackhouse lifestyle… Frustrating.
Ostensibly your savings should be in a vehicle that earns more than inflation. Your income won’t go up 30-50%, but could it go up maybe 10-15%? If your income were, say, 12% higher 3 yrs from now and you put your savings in something that beats inflation *and* prices stay exactly where they are now then you could afford a bigger house than you could today, or more easily buy the same house 3 yrs from now than you could today.
This still might not enable you to buy the house that you want but under this scenario you’d be better off in the future than you are now. That’s the straight answer to your question. But personally I don’t think there’s any way that prices stay flat; we’re due for a big correction.
Simple. Move. You won’t be the only one, believe me. This in turn will pressure the market where prices are out of line with fundamentals - people’s ability to pay - affordability. Market forces at work. Vote with your feet. You are also neglecting to factor in the other nice feature in CA bubble - smog, overcrowding, traffic, crime, crappy school system…. All working against those insane prices. If you really like it there after being gone and living large, check back in 3 years, after the 45% decline…
sell high, buy low in SLO,
I always loved San Luis Obispo, although too much Central Valley trash makes Pismo really an extension of the Valley, just with water.
I’m glad to see that things are unwinding down there too; I know what you mean about being the lone voice in a sea of real estate speculators. I just hope there is no government bailout for these foolish floppers and secondly, I hope this thing really does end up unraveling to the extent all of us here think it should. Maybe when prices in SLO drop to $250K for SFH that will be a good time to get back into a house.
although true everywhere, SLO County homeowners are especially proud of that “everyone wants to live here, so prices will never drop” mentality.
Prices dropped 25 to 30% in SLO County after the 1990 bubble popped, but no one seems to remember that.
Anthony wrote “They haven’t apparently resorted to putting this desperation on-line yet, but what is interesting is that, even with realtors help, they still have to beg recent property owners ”
Not true! Had someone in Salinas buy a new house in V for around $285K because it was such a great deal. Her comments, “A house of that size would sell for $800K in Salinas.” The week before buying she asked my wife where V was. She bought the house on line from a builder. It won’t be long before she’ll be losing her house here and there.
Salinasron,
Oh no! You mean she actually went through with the sale? I remember you mentioning before that she was seriously thinking about it. She’s toast.
Losses are much worse than gains. It takes a 33% gain to reverse a 25% loss. Arithmetic on the way up, Geometric on the way down.
Thrown in a little leverage and it really starts to hurt!
Ripple in San Diego.
A bit of a report from the front lines of the San Diego bubble. One thing I would like to underscore is that regardless of what you might have heard, the San Diego economy (once you take away the Real Estate nonsense) has a substantial dependence on the military and the defense contractors. Yes, I know, if you read the stories people are happy that we have “diversified” and “things are different this time” because those shameful defense guys are not such a cornerstone.
Let me go on record in predicting a slow down in the defense contractor industry. Starting right about now, or in the next few months. For the most part the surge in spending that followed the Sept 11th attacks have run their course, and the DoD is looking to cut back some of the money being spent on new toys and funnel it towards people (damn straight!). This will hit San Diego especially hard. Why?
The champion of our local defense industry is sitting in jail. Randy the Dukester really knew how to make sure the local shops were at least kept at a healthy run level to keep some of the rare talent they contain in place. Since he has gone to the striped trousers club, the other congress critters have been moving with some impressive speed to re-direct work towards their home district, now that Duke is not there to defend them.
That means cut backs at the local Lockheed, Northrop and BAE Systems. Am I talking out of my hat? Lets see…..
Item 1 – I used to work for a local defense shop. Great place to work, talented crew, some of the work there cannot really be done anywhere else because of the 30+ plus history they have with the intelligence and DoD community. So I know people in the biz.
Item 2 – Friend of mine at defense shop A has been letting me know that there is word from the top that they are going to have to lay people off soon. Lack of money coming in the door. I used to work here, this is sad.
Item 3 – Friend of mine at defense shop B is asking if I have a line on some stable work, seems the project he is a part of is about to get scrapped / re-aligned.
Item 4 – Another friend (I know, hard to believe) has let me know that once the current project contract runs out, the parent company is thinking that they don’t need a San Diego office any more. Time to move everyone to Colorado.
Very inopportune timing. I hope the local industry can weather the storm.
My wife works for a defense contractor in San Diego, too. They’ve seen slow downs in certain areas and upticks in others. Probably due more to the sales staff than changes in governmental spending, at least at her company. Plus they have a fair number of multi-year projects that either started in the last 12 months or are poised to start shortly.
But I agree, there is still a lot of defense spending in San Diego…
this is why I love anecdotal evidence; it’s even better than charts and graphs!
Item 5… I have been getting resumes from engineers at these companies. Many of them.
Well, those defense contractors are gonna have a hell of a ahrd time hiring people when they can’t get them cleared…
http://tinyurl.com/k45ho
Interesting hypothesis on Duke Cunningham.
I don’t doubt it.
SAIC is huge in SD.
Anybody see the transcript from Greenspan’s speech this evening?
Apparently, even though he said he expected some markets to decline in price, he said there was no danger for a national loss in price. Excuse me, but didn’t national home prices already take a dive last quarter?
Yes, I saw that too. Here’s the link:
http://biz.yahoo.com/ap/060518/greenspan_speech.html?.v=4
Calling the bubble and calling the drop, or crash, or whatever is going to happen, are two different things. AG is no dummy.
He does not need to be as careful about staying up on the data in retirement as when he was active as Fed chair. Nonetheless, perhaps someone should notify him that Ben just posted evidence here within the past couple of days that prices are falling at the national level, just so his speeches can pass the red-face test.
Why would anyone listen to the guy who recommended ARM’s to help manage their number one ‘asset’, let alone pay him the $100k he gets for speaking? Just curious.
THE WORST new home I have seen yet.
http://tinyurl.com/md24t
Bizarre. I actually like the inside, but the outside looks like an ugly warehouse. You have to give them credit for not going generic McStuccoMansion, however. This one may have a better chance at selling than one that looks like every other house within a mile.
I LOVE this house
The oak kitchen cabinets are a bit too traditional though. It looks simple, sleek, and easy to maintain. Practical with no goofy curlicews and pillars.
I do too. Very cool place.
i’ve seen worse
20,441 homes listed on ziprealty for greater SD, w/ 156 showing 5/18/06 as their listing date…
Pretty soon, “listing” will revert to an alternative definition:
(With apologies to Merriam-Webster)
Main Entry: listing
Function: intransitive verb
: tilting to one side in a state of disequilibrium (as from an unbalanced load)
transitive senses : causing to list
Americans who have bought condos and houses in Victoria as investments will be ecstatic to know that the market is now cooling and price reductions are showing up everywhere. I personally know of one 85,000.00 reduction on a house that has been sitting for 1 year and lots of 20,000.00 - 40,000.00 price drops
http://money.cnn.com/2005/02/02/real_estate/buying_selling/thursday_kickoff/
Sorry, O/T:
“N.Korea may be preparing missile launch: reports”
By George Nishiyama
“TOKYO (Reuters) - North Korea may be preparing to launch a long-range ballistic missile that could reach parts of the United States, Japanese media reports said on Friday, but Japan’s government said it did not believe a launch was imminent.”
“Quoting unidentified South Korean government officials, public broadcaster NHK said satellite pictures showed there have been signs since early this month around a site in northeastern North Korea that pointed to a possible firing in the near future.”
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While we’ve all been fixated on Iran, China, oil, credit, bond, stock, commodity bubbles etc., this has been going on. I’ve been keeping my eye on it for a while, and it seems to be heating up.
Of course, they would not be acting alone. I think the possibility of war on our soil is not at all far-fetched. Wonder what that would do to home prices?
Could this be the “exogenous event” that sets off the “perfect storm” we’ve been talking about?
I sure hope not.
(Flame away, optimists!)