We Regret To Inform You...
... That Muckraking Journalism is Dead
-and has been replaced by lazy advertising subsidized glorified PR service masquerading as your local newspaper.
(New story From Michael Coit at the Press Democrat)
"The North Bay housing market is losing steam, but solid job growth continues bolstering the economy and should keep home prices from declining across the board, a senior Federal Reserve economist said Thursday."
What are these solid job growth numbers? Last time I checked, job growth was anemic at best... Sonoma County Economy & Job Lost and Found
I guess posting stats to sanity check these unsupported conclusions would be too much effort for the newspaper. Here are some recent facts, figures and numbers.
Let's review the facts again...
"Sonoma County experienced slow job growth throughout 2005, gaining only about 600 jobs in net, with the unemployment rate at 4.2% as of November 2005."
This is what was predicted for 2006:
"The county will add about 1,900 jobs this year, a 1 percent increase. That's not a lot of growth, but still an improvement over last year, when the county added only 1,000 jobs for a 0.5 percent increase."
* Employment peaked in Sonoma County in 2001 at the end of the tech boom when the county had 196,700 payroll jobs.
* By 2003, the economic downturn had wiped out 7,600 of those jobs, based on average annual employment.* Through 2005, only 2,400 had returned.
* The number of jobs in the county is still 3.3 percent, or 6,500 jobs, below 2001.
* In Sonoma County, the average wage is $42,171
* The Press Democrat study found that 58 percent of the new jobs created between 2003 and 2005 paid below the average wage.
* It is estimated that 60% of the new jobs added between 2001 and 2003 were lower-paying service jobs that are below the county’s average wage of $42,171 per year.
* Fifty-eight percent of new jobs between 2003 and 2005 paid below the average wage.
** Per-capita income fell 2.6 percent in 2005.
*Adjusted for inflation, per-capita income in 2006 will increase 1.9 percent, to $29,113.
* Only 7 percent of households could afford a median-priced home in Sonoma County at year's end 2005 compared with 12 percent a year ago.
* In 2005 a Sonoma County household needed a minimum income of $152,595 to buy the typical home, based on prevailing interest rates for a 30-year mortgage.
* In 2004, the minimum income needed was $124,650.
(Did you note the per capita income is only: $29,113? Did you note the average wage is $42,171? Did you note that of the new jobs created nearly 60% are paying below that average wage? Did you notice even if they ARE paying the average wage it still is nowhere near the income needed to buy a median priced home? Did you notice that even if you double the average wage it still isn't enough? ok... just checking)
* Adjustable-rate mortgages accounted for 69 percent of loans to buy Sonoma County homes last year and only 31 percent were 30-year, fixed-interest loans - a reversal from just two years earlier.
* Buyers had to increasingly stretch financially to purchase homes. A majority turned to interest-only and other adjustable-rate loans, often making little or no down payment when purchasing homes.
* As interest rates rise, and there are conversions from adjustable rate mortgages to fixed, defaults are likely to rise.
* Default notices are rising, signaling business instability and consumer insolvency.
Reasons foreclosure rates have increased:
* People stretched themselves financially to get into homes using adjustable rate mortgages, interest-only mortgages and more exotic loan products.
* Banks relaxed lending standards to make it easier for people to purchase homes; however, for some of those homeowners, once they have an unexpected financial hardship, such as medical bills, a lost job or necessary car repairs, they stop making mortgage payments.
* Many homeowners put little to no money down when they bought their homes and currently have little or even no equity in their home and thus nothing to fall back on. And in some cases, these homeowners then took out home equity loans or lines of credit and now owe even more.
* Homeowners have relied on the recent double-digit increases in home prices to build up equity in their home instead of paying down more in principal. As housing prices increase more slowly, many homeowners will not be able to rely on high home values to cover their debt loads.
'"The slowdown appears to have taken hold in the North Bay and across California, said Gary Zimmerman, regional economist with the Federal Reserve Bank of San Francisco."'
April Sales Data
"Home prices could level off, Zimmerman said Thursday at conference on North Bay real estate trends. But the housing market should hold its own unless there are major job losses and a flood of homes hit the market, Zimmerman said."
"The April median resale price was $596,925, the second consecutive month with little change compared with prices a year ago."
In Sonoma the median is: $618,000
Glen Ellen: $714,000
Rohnert Park: $580,000
Santa Rosa: $570,000
If you don't call this a flood of homes hitting the market... what DO you call it?
Sonoma County listings progression
3/20/06 = 1742
3/26/06 = 1766
4/03/06 = 1888
4/19/06 = 2828
4/25/06 = 2868
4/30/06 = 2898
5/07/06 = 3052
5/13/06 = 3187
5/18/06 = 3310
5/25/06 = 3412
Sonoma Valley listing progression
2/14/06 = 172
2/14/06 = 183
2/24/06 = 193
2/25/06 = 200
2/27/06 = 214
3/01/06 = 219
3/04/06 = 220
3/12/06 = 230
3/20/06 = 236
3/26/06 = 238
4/03/06 = 268
4/19/06 = 291
4/25/06 = 305
4/30/06 = 315
5/07/06 = 328
5/13/06 = 346
5/18/06 = 363
5/25/06 = 372
According to rereport.com's April Data for Sonoma County the average count for Days on the Market is: 85.
In April of 2005 it was 59
In Sonoma: 100
Glen Ellen: 217
Santa Rosa: 90
Rohnert Park: 69
“It takes a really big hit to the economy to get those falling prices."
According to Ziprealty the number of houses with recent price reductions is: 871
'"The good news here is we’re pretty strong,” Zimmerman told the conference at the Hyatt Vineyard Creek Hotel in Santa Rosa, presented by the North Bay Business Journal."
Even the sponsor for the Press Democrat's printed real estate informercials says this: (from a previously posted article)
"Increasingly, sellers must reduce their prices to attract buyers, agents and brokers said."Last year people got more than their asking price. This year it doesn't look like that and people need to price accordingly," said Rick Laws, Santa Rosa manager for Coldwell Banker, which prepares the monthly Press Democrat home sales report."