Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Saturday, January 20, 2007

Sonoma County, Assume the Position



"Sonoma County continued to lose both jobs and workers in December, wrapping up a paradoxical year that saw unemployment rates hover at historic lows in the face of a struggling economy."

"It was the eighth month in a row in which the county has registered lower numbers of jobs and workers than during the same period in 2005, according to figures from the state Employment Development Department."

The county registered 1,300 fewer jobs than it did a year ago in December.

The county has posted job losses of 2,000 to 2,900 a month every month since July.- -

'"The numbers are telling us there has been no real improvement," said Steve Cochrane, senior managing director at Moody's Economy.com, which tracks the local economy."

"About 1,500 fewer people were employed or looking for work in December, compared to December 2005. These workers may have moved out of the county or quit looking for work, Cochrane said."

'"It seems like Sonoma County is experiencing an exodus of workers along with jobs. That's why the unemployment rate went down - you lost more workers than you lost jobs," said Eric Alexander, an analyst with the state's labor market division."

"Part of the problem is that some of the county's biggest players - wineries, tech companies and tourism - must engage in the global market, where competition is becoming fierce, overall, Sonoma County's economy still faces difficulty, Cochrane said."

'"Global competition is getting tougher and tougher. There's a whole new environment that wasn't there 10 years ago," Cochrane said."


"Sonoma County leads Bay Area home price drop. Home prices fell faster in Sonoma County than any other Bay Area county in December, according to a report Wednesday.

"Housing markets have come down from record highs across California. Some areas have been hit harder, including Sonoma County, with a weak economy and home prices that remain too expensive for many residents."

"Six of the state's 15 most-populous counties saw annual price declines. The biggest percentage drop occurred in San Diego County, where the median home price fell 6.4 percent from the year-ago period."

Sonoma County saw a 6.3 percent drop.


Home Market Hits Skids.

"The number of Bay Area homes sold in December was the lowest in a decade while home prices nudged slightly higher as the once red-hot market continues to cool, DataQuick Information Systems reported Wednesday."

"The slowdown is taking its toll on some homeowners. The number of homes in some stage of foreclosure in December continued to rise in the Bay Area compared with a year ago due to a slowing market and rising interest rates on adjustable-rate mortgages, according to a separate report released Wednesday by RealtyTrac.com, an online foreclosure marketplace. The majority of the foreclosure proceedings involved homeowners who fell several months behind in payments." umm... what other reason would there be for foreclosure?

"Even without rising foreclosure rates, the number of homes for sale has been increasing. That's because buyers are in no rush to buy and many sellers are still pricing their homes as if they were still in the red-hot market of a couple years ago, observers said."

'"Prices remain relatively sticky. They have not fallen." said Chris Thornberg, a principal with Beacon Economics. People are loathe to realize a loss," he said. However, Thornberg expects prices will start falling slightly on a year-to-year basis as early as spring in response to a softening economy."

"Rising foreclosure rates could put more homes on the market for sale at discounted prices by lenders that take back homes, which could help fuel an overall decline in home prices, Thornberg said."

"The number of homes sold in December fell almost 20 percent from a year ago, in line with the size of declines of recent months. The drop extends a streak of monthly sales decreases dating back to April 2005."

"While many in the real estate industry say that the downturn in the housing market is over, Thornberg disagrees."

'"I'm hearing all this nonsense about a soft landing and rebounding in 2007, and that's just incorrect," he said. "It just doesn't work that way -- housing cycles when they pop take years to clear out of the system, not months."'

'"We're still in the middle of the housing-market correction, both in terms of price and volume," said Stephen Levy, director of Palo Alto's Center for the Continuing Study of the California Economy. "I still think we're nearer the beginning or the middle of a longer correction."'

"Brokers attributed the sales slowdown to sellers who set their prices too high and were unwilling to budge. Real estate experts said homes that are selling are those whose owners realize that the market has retreated from its highs of the past five years."

"As more sellers realize that they need to lower their asking price to attract buyers, the median home price is likely to fall further, according to Levy. New-home builders have been quicker to slash prices than individual home sellers."

"Santa Rosa fire investigators have zeroed in on the furnace as the source of a two-alarm blaze that gutted a Bennett Valley town house on Thursday. But it’s still unclear whether the furnace somehow malfunctioned or whether it might have ignited flammable materials that may have been placed nearby, Santa Rosa Fire Battalion Chief Mark Basque said this morning."

The investigation is continuing.

"A two-alarm fire in Larkfield on Tuesday night similarly started in the garage, but the cause of that blaze remains undetermined, Rincon Valley Fire Chief Doug Williams said this morning."

"The owner of the burned unit was identified by neighbors and friends as Ann Schooling, a local real estate agent. She already was at work when the fire was reported about 8:13 a.m."

Gloria Byrne, who lives across Lago Vista Way from Schooling, said her husband heard what sounded like gunshots, "pop, pop, pop."'

'"He looked outside and he said, 'Ann's house is on fire,'" Byrne said. "She spent so much money fixing her place up."'

"Schooling arrived home while firefighters were still working the fire and talked stoically with an investigator, dabbing at her eyes once or twice between taking hugs from neighbors. She declined interviews."

"The Lago Vista blaze brought out 39 firefighters as well as dozens of neighbors - many in bathrobes - who watched flames burn through the multilevel unit at the center of the complex Thursday morning."It's really scary," said resident Susan Styer, who lives down a short hill from the burned building in a separate row of housing."

"Neighbors described flames coming out the windows and roof and sweeping through the attic toward next-door neighbor Pat Angelo's home. An hour later, the view featured charred and sodden chunks of wall, insulation, hoses, pipes and other debris in Schooling's gutted garage and home, where occasional flames still flared and from which steam and smoke rose toward the sky."

"Angelo cringed as firefighters moved into her garage, moving storage units as they tore into part of the wall to check for signs of fire. She was at home and alerted to the fire by outside noises and a neighbor banging on her front door to get her out. As firefighters gained control, they eventually had to take down a second-floor wall at Angelo's place "because there was hidden fire up there skunking around."'

"Pacific Lumber Co., which for more than a century dominated the logging of North Coast redwoods, has filed for bankruptcy protection."

"The historic timber company, which owns vast stands of redwood in Humboldt County has announced plans to sell off 275 company-owned houses and commercial properties in the Humbolt County town of Scotia. Pacific Lumber has struggled for more than two decades to sustain profitable logging operations."

"The company, in filing for Chapter 11 bankruptcy protection, said it was unable to make a $27 million interest payment due today on more than $700 million in debt."

4 Comments:

At 1/20/2007 01:24:00 PM , Blogger moonvalley said...

I'm amused every time I see those Press and IT headlines about the bottom having been reached and things turning upwards again.

 
At 1/20/2007 06:04:00 PM , Blogger vfsv said...

Santa Clara County median also took a large hit in December.

The details are updated here:
http://www.viewfromsiliconvalley.com/id298.html

Our corresponding jobs de-bunking will be out soon.

 
At 1/20/2007 08:03:00 PM , Blogger Athena said...

moonvalley said...
I'm amused every time I see those Press and IT headlines about the bottom having been reached and things turning upwards again.


Me too. We need to keep track of how many times we have reached the bottom and will start turning upwards again... ;-)

 
At 1/20/2007 09:01:00 PM , Anonymous tom stone said...

I have been hearing that the rebound will start this spring for months...i started hearing it within weeks of the first reported drops in median price,sometimes from people who are quite sincere....hey everyone wants to live here the economy is great,peace is at hand.my response has usually been "wow it MUST be really different this time,if the biggest, longest runup in prices in history is going to be followed by the shortest smallest drop in history!" i usually ask them if they think it is the unprecedented peace and democracy in the mideast,or the unchallenged strength of the us economy that has the greatest effect in stabilizing the market? BTW i consider the availability of hard money a leading indicator,and it is very noticeably harder to raise.what would take 2 phone calls to raise a year ago,now takes 30.and i am talking about very clean deals.as far as "reaching the bottom" these folks will need both hands and a large prybar to remove their heads before they will be able to hear the train bearing down on them.

 

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