August 18, 2014

Buyers Aren’t Seeing What Looked Like A Bargain

The Mercury News reports from California. “The turbocharged Bay Area housing market ran out of gas in July as the region turned out the lowest annual price gain in almost two years, according to Corelogic DataQuick. It’s most likely the inevitable winding down of a long run of astonishing price gains. Single family home prices are up about 50 percent in two years in Alameda and Contra Costa counties and about 25 percent in Santa Clara and San Mateo counties, and are up about 40 percent in the nine-county Bay Area. ‘Inventory has crept up, and more inventory is coming on all the time now,’ said Barbara Lymberis, with Perfect Harmony Properties in San Jose’s Willow Glen.”

“Alameda County, which along with San Francisco saw the sharpest year-over-year price gains in July, is cooling off in August, according to Glen Bell of Better Homes and Gardens Real Estate in Berkeley. ‘Prices are leveling off and we’re seeing some downward pressures,’ said Bell, who tracks the East Bay housing market. He said that about 13 percent of homes for sale in Berkeley have seen reductions in asking prices, and even more are slow to sell. ‘It’s an eye-opener for a lot of agents,’ Bell said.”

The San Gabriel Valley Tribune. “Southern California home sales hit a three-year low for the month of July and the region’s median home price dipped to $413,000, industry tracker CoreLogic DataQuick reported. ‘Prices came a long way in a couple of years, and now a lot of would-be buyers just can’t stretch their finances enough to buy in today’s more conservative lending environment,’ said CoreLogic DataQuick analyst Andrew LePage. ‘The more spectacular annual price gains of a year ago — over 20 percent — seem far back in the rear view mirror now.’”

“‘It’s really being driven by sellers, in my opinion. They are listing their properties way too high. I don’t want to say they are greedy …. but they always add another 10 to 15 percent on top of what the fair market value is. But buyers are not fooled by it. And as soon as we reduce the price the home sells within a couple weeks,’ said Robert Smith, a Realtor with Centennial Realty in Valencia.”

The Glendale News Press. “Anne McDonald, a Realtor with Hall & Chambers Real Estate in Glendale, said properties that are ‘listed at the right price’ are still seeing multiple offers, while prices are being reduced more often on homes that may be overpriced for the market and have not sold for several months. Prices are also being reduced more often on ‘unique’ homes, which may not have a yard or have small bedrooms, McDonald said. And as more homes go up for sale, it’s having a calming effect on the market. ‘As inventory rises, prices are stabilizing,’ McDonald said.”

The Union Tribune. “From June to July, the median home price in San Diego County declined by $5,000. At the same time, activity in the county’s real-estate market declined both over the month and annually. In July, there were 3,474 transactions closing in San Diego County, down from 3,736 in June, and an 18.5 percent drop from the 4,260 transactions in July 2013. In July, there were 8,122 active listings in the county, up from 5,443 a year earlier, the San Diego Association of Realtors reports.”

“Gary Kent, a La Jolla-based agent with Keller-Williams, said he considers the current housing market to be the first balanced market since 2000, meaning it’s not a strong buyer’s or seller’s market. ‘I think that’s partly because prices have reached the point that we have some people selling because they like the price they can get for the house,’ he said. ‘The flip side is that buyers aren’t seeing what looked like bargain prices anymore. Some buyers are dropping out of the market saying, ‘Well, it’s not a bargain.’”

From CNBC. “‘Homes that are in good condition and priced well are still selling quickly,’ said Geoffrey Schiering, a San Diego Realtor. ‘The inventory of homes for sale has risen slightly, but remains at a relatively tight 3-month supply. However, the number of closed sales has dropped substantially…this suggests that as some sellers have begun pushing their list prices higher, more homes are failing to sell.’”

The LA Times. “As the Stinson Beach County Water District board prepares to vote Saturday on a rationing regimen, the talk here is of the town’s split: full-timers whose numbers are dwindling versus an ever-increasing number of out-of-towners with multimillion-dollar second homes, many used as seasonal rentals. Vacation rentals are ‘a political hot button,’ and some longtime residents are calling for a ban said Sarah Butler, a broker with Oceanic Realty. But Butler called that notion ‘ridiculous. It’s what our economy is based on now. It would literally pull the rug out from under Stinson Beach.’”

The Press Enterprise. “When the California Homeowner’s Bill of Rights took effect in 2013, monitors of foreclosure activity across the nation predicted banks would take a collective pause on repossessions. RealtyTrac VP Daren Blomquist said he believes today that numbers are coming in to show the timeout is truly over. RealtyTrac reported that 575 homes were taken back by lenders in Riverside and San Bernardino counties in July, up 27 percent from July 2013. ‘What’s driving the increase continues to be the REOs,’ Blomquist said. ‘We have now seen five consecutive months where the bank repossessions have increased annually.’”

“Bank repossessions have rebounded in many other Southern California metro markets. San Diego’s overall foreclosure activity increased 12 percent in July from a year ago due to a 40 percent jump in REOs; Los Angeles’ overall foreclosure activity increased 10 percent as the result of a 58 percent jump in bank repossessions.”

“Blomquist said that banks that kept houses with mortgages in default out of the REO pipeline are coming out of limbo. ‘It demonstrates that the market is definitely improving, but there is a bit of a soft underbelly in California – still, with the lingering foreclosures that have been held back, in part, because of the Homeowner’s Bill of Rights,’ he said.”

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Comment by Ben Jones
2014-08-18 09:41:07

‘Blomquist said that banks that kept houses with mortgages in default out of the REO pipeline are coming out of limbo. ‘It demonstrates that the market is definitely improving, but there is a bit of a soft underbelly in California – still, with the lingering foreclosures that have been held back, in part, because of the Homeowner’s Bill of Rights,’ he said.’

Mr Rental Watch, your order of crow is ready.

Comment by Ben Jones
2014-08-18 09:46:47

‘After declining for more than a year, foreclosure activity rose 12 percent in San Diego, 10 percent in Los Angeles and 3 percent in the Riverside-San Bernardino area, thanks to a sudden spike in bank repossessions.’

‘The Coachella Valley experienced the bump in bank repossessions in June, one month earlier than the rest of Southern California. In June, there were 63 REO sales, up 23 percent compared to the same month a year ago.’

‘The spikes in the desert and the Southland were expected, Blomquist said. The California Homeowner Bill of Rights took effect in January 2013 and created an artificial drop-off in foreclosure activity. Delayed foreclosures are beginning to surface, he said.’

‘Two cities, La Quinta and Rancho Mirage, had unusual bursts of foreclosure filings compared both to June and a year earlier. In July, La Quinta reported 32 total filings, up 28 percent from a year ago. A bump of 11 bank repossessions added to the increase. Rancho Mirage had 20 filings, up 17 percent compared to a year earlier. Desert Hot Springs had the greatest proportion of foreclosure filings. One in 441 housing units received a filing.’

‘Foreclosures in Los Angeles County rose for the first time in 31 months in July. One in every 3,202 homes was in foreclosure in the county, up more than 10 percent from the same month last year, according to RealtyTrac. On a month-to-month basis, the rate rose nearly 6 percent from June.’

‘In the six-county Southern California region, there were 7,908 foreclosures, up about 6 percent from the same month last year, and up 4 percent from June.’

‘In the greater Valley, Palmdale again topped the list, with foreclosures in one out of every 392 homes. The other major Antelope Valley city of Lancaster also continued to struggle, with one out of every 454 homes in foreclosure. Other Valley communities with high foreclosure rates include Sunland, with one in every 464 homes; Pacoima, with one in every 582; and Sylmar with one in every 638.’

‘Amid a tight supply of available homes for sale, there is some evidence that banks are moving more aggressively to clear problem mortgages off their books by moving ahead with foreclosures, according to some housing experts.’

Comment by Ben Jones
2014-08-18 15:51:49

‘Foreclosure activity across the United States jumped in July for the first time in four months as lenders scheduled more properties for auction, an industry report said. “The biggest causes for concern when it comes to foreclosure at this point are at the state and local level, in places like New York, New Jersey and Maryland, where foreclosure activity continued a nearly two-year trend higher in July, and in places like Southern California, where we saw annual increases in foreclosure activity following nearly three years of decreases,” said Blomquist.’

I wonder if red or white wine goes best with crow?

Comment by Whac-A-Bubble™
2014-08-18 20:33:53

If you aren’t in the mood for eating crow, try drinking it:

The Black Crow drink recipe

1 Part 151 Rum
4 Parts Barqs Root Beer

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Comment by inchbyinch
2014-08-18 16:19:57

Great posts today. I hesitate on these homes going to auction. When we went to the auctions at the Ventura Court House -outside (So Ca) circa 2011-2012, Foreclosure Radar would show them off the auction block a day or two before their scheduled auction date.

Also, the banks would go up against the highest bidder and win the property back.

Do you think this time, it will be different?

We bought a Dementia Trust home, from the Trustee.

Comment by Housing Analyst
2014-08-18 17:19:15

And you paid a 250% premium.

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Comment by Ben Jones
2014-08-18 18:01:56

Anything and everything can happen at these auctions. Once I witnessed a lender with a second lien buy a house from the first lien holder. And I’ve seen the lender bid against the attendants. That’s some bunkum there, because they are bidding with money that would go back to them. Also, some of these auction firms will put in shill bids on a no-reserve auction! That has to be illegal, but if done right, how would you ever know? This stuff isn’t for the faint of heart, obviously. Still, the best deal I ever took part in was an online, no reserve auction (the only firm I trust).

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Comment by inchbyinch
2014-08-18 21:55:32

Great insight. Thank you.

Comment by Whac-A-Bubble™
2014-08-18 20:30:06

‘Two cities, La Quinta and Rancho Mirage, had unusual bursts of foreclosure filings compared both to June and a year earlier.’

We’ve had lots of Joshua Tree humor on the HBB over the years. If you imagine Rancho Mirage as Joshua Tree ground zero, you are close to the mark. (It’s actually a very good point of departure for visiting Joshua Tree National Park.)

I spent Thanksgiving a couple of years back at a rental condo in Rancho Mirage with a relative who is a finance professor. Reportedly some of his faculty colleagues were snapping up condos in the area back then. Next time we cross paths, I’ll have to get a follow-up report on how those investments panned out.

Comment by Whac-A-Bubble™
2014-08-18 20:15:31

Does this portend downward pressure on CA home prices? Perhaps the long-elusive goal of affordable housing in CA is finally within reach!?

Comment by Rental Watch
2014-08-18 21:55:32

The increase in actual foreclosure simply means that the rate of “non-current” loans will fall even faster as the last distress is pushed through the process.

Per Black Knight (LPS) CA’s non-current loan rate is 4.5% as of the end of June…8th lowest in the country. And as reported last week by the NY Fed, NEW delinquencies are back to normal baseline levels in CA.

Now, show me a reversal in the new delinquencies (ie. a new pig entering the python), and it’ll be a sign of problems anew. Until then, this is just the last bit of the mess from the crash working through the system.

For perspective on volumes…

“Property owners were served with 2,657 total filings – notices of default, trustee’s sales or bank take-backs known as REOs – in July. Nearly one-fourth of those filings were REOs or notices of bank repossession.”

“At the bottom of the Great Recession, the Inland region led the nation in foreclosure-related activity and consistently recorded more than 20,000 filings in one month.”

So, we are running at a bit more than 13% of the peak pain in inland So Cal, and that is up from a bit over 10% of peak pain last year. Yawn.

Comment by Ben Jones
2014-08-18 09:48:26

‘San Luis Obispo County is in the top 10 least affordable places to live in the United States, according to a study conducted by the National Association of Home Builders.’

‘Of the 277 metro housing markets evaluated in the study, all but one the top five small housing market and top five major housing markets were in California. San Francisco was the least affordable with only 11.1 percent of homes sold in the second quarter being affordable to families earning the area’s median income of $100,400.’

‘According to the study, SLO County’s median home price during the second quarter of 2014 was $440,000. With an average county family income of $77,000, only 22.2 percent of the homes in the county were affordable during that time.’

Comment by Ben Jones
2014-08-18 09:50:31

‘The percent of people in Tulare County who can afford a home has slipped from 70 percent a year ago to just 59 percent today.’

‘Lower interest rates in the second quarter of 2014 failed to offset continued home price increases, lowering housing affordability statewide and in 19 of 26 counties in California, the California Association of Realtors said.’

‘The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California fell from 33 percent in the first quarter of 2014 to 30 percent in second-quarter 2014 and was down from 36 percent in second-quarter 2013, according to C.A.R.’s Traditional Housing Affordability Index (HAI).’

‘With home prices increasing at double-digit rates throughout 2013 and interest rates higher than levels observed in early 2013, both the monthly payment, including taxes and insurance (PITI), and minimum income required to purchase a home, shot up by more than 66 percent at the statewide level.’

Comment by Ben Jones
2014-08-18 09:53:57

‘In California, the erosion of the middle class is the worst in the nation, which is revealed in part by the faster-paced employment growth in the state, which is made up of high-wage growth through corporate consolidation and bonuses and explosive growth in the low-end jobs between minimum wage and $14 an hour. Those jobs are mainly in customer service, hospitality and low-end health care.’

‘The problem is more pronounced in our state than any other, not just causing a wealth and money-earning imbalance, but setting up a system that may ultimately effect the growth of the economy in the state, affecting housing markets, consumer confidence and the gradual slip of a former middle class that sinks into the class of the working poor.’

‘It’s almost as if what is happening in California isn’t really happening in California. By that we mean, the jobs growth, the economic rebound, they are missing the component that will see a system-wide economic recovery be stable and long-lasting — the strengthening and rise of the middle class.’

‘Various reports related to this fact have begun to emerge ever since the Census Bureau released numbers earlier this month showing the widening chasm between the highest-paid and the lowest-paid in California.’

‘This state has seen some of the best strides in the country in terms of the housing market returning, for instance, but as prices climb the people who can afford to buy will ultimately tap out as middle-class purchasers of single-family homes shrink in numbers.’

‘It is a dangerous predicament to be in in California. At some point, it begins to appear that the growth in this state is happening on a wobbly foundation.’

‘Unfortunately there does not appear to be an immediate solution. Job creation, an economy on the mend, not just in California but in the nation, has required the bar to be moved. Consolidation, automation in middle-level positions and lowering pay that was substantially higher before the layoffs occurred were part of the path to improve our outlook.’

‘Where this goes from here will be interesting, and potentially painful for hundreds of thousands of families who sink further toward poverty.’

Comment by Selfish Hoarder
2014-08-18 12:26:27

Cali is on track flu feudalism. as it is done in Mexico, except instead of wealthy Mexicans in the top 0.01% it will be wealthy Chinese.

Isn’t that how it was in the movie “Blade Runner?”

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Comment by Guillotine Renovator
2014-08-18 10:25:35

I remember back in 2002 I was briefly talking to a college professor from SLO who was on vacation, and he made mention of the rapidly rising house prices, and how happy he was his son and daughter were already “owners.” At the time I thought it was a bit odd because I’d never had anyone bring up their house value, and he seemed to be gloating a bit. Of course, over the next few years things really became clear to me, but prices have been out of whack in SLO for decades now.

Comment by rms
2014-08-18 12:50:42

“…but prices have been out of whack in SLO for decades now.”

+1 Nice weather, equity locusts from LA and SF bay areas, and a greedy mortgage industry have ruined the casual coastal lifestyle.

Comment by Selfish Hoarder
2014-08-18 20:14:02

Hard to believe that SLO-town houses are way out of touch with incomes. Obviously a lot of outsiders such as L.A. types bought up houses in the area to get away from it all - and brought the high prices with them. For shame.

Same thing is beginning to happen in the Mendocino area and will head up to the town next up from there, Fort Bragg. The even smaller town of Westport is very pricey, more than Mendocino. I had my eye on that town for years.

Comment by FED Up
2014-08-18 10:44:02

I wonder if the median income number of $100,400 came from the NAHB. It doesn’t match the census number of $87,329. In the Chicago Tribune in the Real Estate section they used to feature a different suburb and give data about the suburb, including median household income. The numbers never matched the census numbers - always higher. The data was provided by the NAR, IAR or some realtor group. I am always suspicious now, as it seemed they were trying to make everything seem more affordable than it actually was.

Comment by rms
2014-08-18 12:45:35

“San Luis Obispo County is in the top 10 least affordable places to live in the United States, according to a study conducted by the National Association of Home Builders.”

+1 My former corner of the world this news doesn’t surprise me with median household incomes less than $40k/yr and moldy 3/1 ranchers built in the fifties fetching $400k plus. Shocked? Not!!

Comment by inchbyinch
2014-08-18 16:27:37

SLO use to be a great college town with extraordinary independent bookstores. Then chains moved in and destroyed the charm.

Downtown Los Angeles (Old Bank District)has “The Last Bookstore”. This place is a sanctuary for anyone who loves books, art, and offbeat places. We browsed for hours.

Comment by rms
2014-08-18 18:10:57

“SLO use to be a great college town with extraordinary independent bookstores. Then chains moved in and destroyed the charm.”

The cozy Earthling Bookstore was forced to perform a seismic upgrade of their unreinforced masonry building, which was hugely expensive. Then as they were ready to re-open the Copeland family RE developers leased a fresh large space to Barnes and Noble bookstore. The Earthling owners were highly leveraged, and their customers were unfaithful, opting for the discount prices; the struggling owner’s lost their home too, IIRC.

Amazon is now eating into Barnes and Noble profits.

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Comment by Ben Jones
2014-08-18 09:56:11

‘From time to time, a story you do becomes as relevant to you as it is to others. Case in point…that story this week from the National University System’s Institute for Policy Research. It was a new study about San Diego’s population.’

‘And in the U-T, the headline on the story read: “Gen X Leaving San Diego; Taking Their Kids.”

‘Now I’m sure for a lot of listeners who heard the story, it was one that hit home. And coincidentally, this time when I reported a story, it hit home with me too.’

‘You see, coincidentally, the same day I reported the story about Gen X’ers with kids leaving San Diego for better paying jobs and more affordable housing…. my Gen-X son and daughter in law moved with their new kids into their new home in Texas.’

‘There are many of us who hope this new study opens the eyes of the public policy makers…. about making policy that makes California more affordable for Gen-X’ers and everybody.’

Comment by Whac-A-Bubble™
2014-08-18 20:39:42

‘There are many of us who hope this new study opens the eyes of the public policy makers…. about making policy that makes California more affordable for Gen-X’ers and everybody.’

1) Abolish the CA Homeowners Bill of Rights.
2) Make it illegal for banks to let owners in default live rent-free forever.
3) End policies that enable underwater homeowners to refinance at ultra-low interest rates.

Comment by Rental Watch
2014-08-18 22:02:08

4) Repeal CEQA (or at least reform it);
5) Abolish Prop 13 (or at least allow it to only apply to primary residences)

Your 1-3 doesn’t do anything about the lack of supply.

Comment by Whac-A-Bubble™
2014-08-18 22:18:12

There would be a lot more supply if underwater refinancing hadn’t enabled buyers with unaffordable mortgages to reduce their monthlies to very affordable levels that did not reflect the contractual terms to which they agreed when they signed their mortgage paperwork.

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Comment by Ben Jones
2014-08-18 22:42:46

Here’s your lack of supply:

‘Inventory has crept up, and more inventory is coming on all the time now,’ said Barbara Lymberis, with Perfect Harmony Properties in San Jose’s Willow Glen.’

Dang, I know it’s hard to accept. But, well, there isn’t a shortage of housing anywhere. We are learning this all over again.

How’s the crow?

Comment by Rental Watch
2014-08-18 22:51:38

Whac, when you foreclose on a “homeowner”, especially one that simply stops paying by choice, they simply move to an empty house. It’s a giant game of musical chairs.

I’m not talking about number of homes on the market for sale.

That’s not the supply that matters.

I’m talking about the number of homes relative to the number of people who live in the state. All data points to not enough housing in the state. There is only one way to solve that problem…build more housing.

Comment by Rental Watch
2014-08-18 22:59:43

BTW, the crow is just fine. Seems it’s not really crow at all.

Comment by Whac-A-Bubble™
2014-08-18 23:27:20

‘Whac, when you foreclose on a “homeowner”, especially one that simply stops paying by choice, they simply move to an empty house.’

I have no interest in the kind of housing in which foreclosure ‘victims’ settle once they are forcibly relocated.

Comment by Housing Analyst
2014-08-19 04:58:23

There is no “lack of supply” my friend. Not with 4.4 million excess empty houses in CA.

Comment by Ben Jones
2014-08-18 09:58:56

‘Monday was a momentous day. After sitting in the dirt in front of my neighbor’s house for six weeks, the old sofa and two wooden chairs that had come to symbolize the sorry state of our High Desert were placed in the bed of his pickup truck and hauled away.’

‘I don’t know if my neighbor took them to Advance Disposal or if they are sitting somewhere out in the desert. Obviously, I hope the former.’

‘My joy didn’t even last a full day, however. When I came home Monday night, I saw my neighbor had decided to lean a makeshift wooden fence up against my chain link fence that separates the back half of our properties. And this wooden fence was, I kid you not, covered in graffiti.’

‘He also put a similar wooden fence up around the other side of his property. And it is covered with graffiti on the inside, which is visible from my backyard and kitchen.’

‘I used to wonder why in the world people would want to live out in the middle of nowhere on 40-acre parcels. I’ve come to realize it is probably because they had their fill of barking dogs, loud music, rowdy kids and/or old sofas sitting in the front yard.’

‘My wife was distraught, which is understandable. When you work hard to build something, take pride in your property and neighborhood and just want to live in peace, old sofas and graffiti-covered fences don’t cut it. So on Tuesday morning, I visited the Hesperia Sheriff’s Station again and talked to the local code enforcement folks again. But I’m also seriously considering filing a lawsuit against the property owner.’

‘That is a tool that noted economist John Husing told me has been used in other cities in Southern California. In at least one case, Husing said a city partnered with homeowners in filing lawsuits against absentee owners who were renting their properties and dragging down the neighborhood.’

Comment by Kidbuck
2014-08-18 14:49:17

If you bring attention to yourself by filing a law suit or simply complaining, I hope you are prepared to defend your property and family 24/7 from vandalism or worse. Lock and load or move.

Comment by Ben Jones
2014-08-18 10:01:45

‘Anjli Raval is a London-based correspondent for the Financial Times, but she recently took a trip through the U.S. to analyze home prices. Her first stop was South Sacramento in Northern California, where she noticed home prices still stagnated: “These areas of California’s capital had some of the highest foreclosure rates in the US after the housing bust that wiped out $7tn of homeowner equity in the wake of the financial crisis. Since then, Sacramento has seen a rebound, at least on paper. But there are clear signs that it – and many other cities – are stuck in a multiyear housing hangover that has serious implications for economic recovery.”

Comment by Ben Jones
2014-08-18 10:05:40

‘Bad debt write-offs for non-payment of municipal utilities have inched up slightly after dropping for two straight years. The Manteca City Council is being asked Tuesday to write off $153,675 in uncollectable utility accounts for water, sewer, and solid waste. It represents 466 accounts which have been inactive since June 30, 2012. It reflects 4.45 percent of the total utility account receivables as of June 30, 2014. The losses are absorbed by other ratepayers.’

‘Most of the non-collectable accounts are from renters and homes that went into foreclosure. And as such, they have served as an indicator of the impact of foreclosures on Manteca.’

‘The city four years ago instituted a policy requiring a renter’s agreement when water service is opened. That means to open a service, you must have a copy of the rental agreement. That makes it harder to simply shift the account into someone else’s name after it goes delinquent for several months unless a new rental agreement has been signed.’

‘A number of those who were delinquent and had received final notices for water cutoffs would send someone else living in the household to say they were the new tenants and that they knew nothing about an outstanding water bill. In most cases, the city had no way of verifying the validity of the story.’

‘Oftentimes people who have stopped paying mortgage payments will — a month or so before they are sure they have to vacate the property — will stop paying for municipal utilities as well.’

‘Utility write-offs had ballooned to over four years to $261,000 after being less than $70,000 for years. City officials had predicted without tightening up the rules on rentals plus sending out late notices quicker that the delinquency rate could have hit 10 percent and cost ratepayers who pay on time as much as $300,000 since they ultimately will have to absorb the losses Manteca is forced to write off.’

Comment by Ben Jones
2014-08-18 10:14:59

‘John Williams is in charge of the largest territory — and the largest economic unit — in the Federal Reserve System. The San Francisco-based 12th District of the Federal Reserve covers nine western states.’

‘Q Regardless of the strength of the Bay Area economy, are there still challenges?

A There are booms and there are slumps. There are cycles. These really good times won’t last forever. It won’t always be the land of milk and honey.

Q How does construction look?

A Construction is one of the tough parts of the economy. We clearly overbuilt in the 2000s. We overbuild housing. We overbuilt commercial real estate. The commercial market is coming back. Home prices have come back. But residential construction has responded much more slowly than we would have thought.

Q Why has home building not rebounded?

A There is a psychological scarring effect in the housing market. A lot of people went into buying homes thinking the price would always go up, that they were great investments. When housing collapsed, people got afraid to re-enter. Banks and other lenders were also scarred. Lenders are being very cautious, they are waiting to see how the housing market recovers and what the new normal will be.

Q What would the end of the tech boom mean for the Bay Area economy?

A The fallout from another bubble could be particularly bad here in the Bay Area. If the wealth of all the employees at Facebook, Google, Apple or Twitter or other tech companies were to plummet, that would obviously affect the local economy.

Q Starting with the rebound from the 1990s recession, each recovery seems to be weaker than the previous one. Are we having yet another jobless recovery?

A The current recovery is subpar. But maybe this is what the recoveries of the future will look like.

Comment by Housing Analyst
2014-08-18 10:30:39

How many times will the 4.4 million excess empty houses in California be shuffled and reshuffled?

Comment by alphonso bedoya
2016-08-22 19:15:44

Is it acceptable to answer: Give or take 4.4 million times.

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