Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Tuesday, January 02, 2007

Sonoma County Not Facing Global Reality

NORTH BAY – "Even as unemployment rates across the North Bay remain among the lowest in the state, a decline in the number of jobs in Sonoma County has economists searching for answers."

"Sonoma County shed 2,400 jobs to 192,000 compared with 2005 in sectors from construction to hospitality."

"Economists say the apparent weakness in the Sonoma County job growth reflects the impacts of the housing slowdown and the region's continuing evolution in the global economy."

"Dr. Robert Eyler, chairman of the Economics Department at Sonoma State University and director of the Center for Regional Economic Analysis, said his research indicates unemployment has been rising slowly in Sonoma County for the past three or four months."

Dr. Eyler said the job market likely is responding to the local tech downturn, and the Federal Reserve's aggressive efforts to slow inflation and a more normal housing market.

'“Sonoma County is a very globally exposed economy,” said Stephen Cochrane, managing director at Moody's, which produces local economic reports for the Sonoma County Economic Development Board."

'“In my view, the county is going through a very long-term adjustment process,” he said. “It’s adjusting to a new global reality, and that just hasn’t come to an end yet,” Mr. Cochrane said."

"In terms of the downward trend in the leisure and hospitality industry, Mr. Cochrane can’t understand the market forces behind it. Employment has been falling since the beginning of the year.” He said the trend could be the result of the booming business travel industry, which could be leaving Sonoma County behind due to its relative geographic isolation from the rest of the Bay Area."

'“Conferences, meetings and hotel rooms are being booked in San Francisco and throughout the rest of the Bay Area,” he said. “But Sonoma County is a bit outside of that market...”

“Throughout much of California that sector is doing gangbusters,” he said. “Jobs are being created and room rates are strong in the rest of the Bay Area. But you don’t see that in Sonoma County.

"Mr. Cochrane said that when he typically thinks of a region doing poorly economically, his first thoughts might be of the Southeast where textile mills, furniture manufacturers and apparel manufacturers are losing out to inexpensive labor overseas in places like China and Malaysia. Only that is not the case in Sonoma County, which is not a low-tech economy."

'“In the tech industry, be it software, medical instruments or telecom equipment, Sonoma County companies face considerable competition from around the globe,” he said, especially in manufacturing."

'“So many of the important industries that support the (Sonoma County) economy are sold on a global market. Be it wine, technology or tourism, these are international industries with lots of competition.”'

'“To be a leader in technology right now you really have to be a center of research and development, somewhat like the Silicon Valley.”'


At 1/03/2007 12:31:00 AM , Blogger Donna Piranha said...

Thank you for this informative blog. I think I'll reconsider the neg am loan I'd need to buy right now and take my house off the market.

At 1/03/2007 10:21:00 AM , Anonymous TS said...

hmmm high gas prices,declining wages,globalization,card no longer working in home ATM,inflation,housing market in death spiral...huge deficits,nope, can't see any reasons for economic decline unless nancy pelosi has something to do with it,could she be having an affair with bill clinton?


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