Sonoma Housing Bubble

Pulling the cork out of Sonoma's bubbly housing foolishness

Monday, August 04, 2008

State of the County

"Median-priced house in the region sold for $404,500 in June, down 33.1 percent from a year ago -- the 24th consecutive monthly decline. The county's median, the point at which half the homes sell for more and half sell for less, reached a record $619,000 three years ago before housing's downturn."

'"This is unlike any market I can recall. Every recovery starts at the bottom of the market, but in this market the bottom is so much lower," said Rick Laws, Santa Rosa manager for Coldwell Banker, which prepares the home sales report."

"47 percent of houses sold in June were bank-owned or short sales, where homeowners sell for less than what they owe on mortgages to avoid foreclosure."

"Unemployment has been rising steadily over the past year in Sonoma County, where the weak economy left 15,100 job-seekers out of work in June, a 31 percent increase over a year ago. It is the largest number of people without jobs since January 1995, the state Employment Development Department reported."

"We've kind of had the perfect storm the last few months. The slowdown is taking hold more broadly," said Ben Stone, executive director of the county Economic Development Board."

"Much of the slowdown is tied to the housing downturn and cutbacks in consumer spending, which are deepening as the economy slumps and prices for gas and other goods rise."

"The biggest losses over the past year were 1,000 jobs in construction, 300 among finance and insurance companies, 300 restaurant and bar jobs and 500 in other services."

"Overall, unemployment in Sonoma County stood at 5.6 percent in June, up from 5.1 percent in May and 4.4 percent a year ago."

"The job outlook is not expected to improve for at least the next several months.
Several sectors tied to housing continue to shed jobs."

'"Construction has been losing jobs for the past 14 months. Financial activities has been losing jobs for the last 23 months," Singh said."

"Tourism-related businesses aren't hiring as in past years, indicating a drop-off in consumer spending, Singh said."

"Every week in Sonoma County, banks take back 60 homes from owners who have fallen behind on their loan payments."

'"Almost everything I look at these days is a foreclosure. I'm surprised when it isn't," said Pete Deatherage, co-owner of Pacific Appraisals in Rohnert Park."

"Foreclosure tours are one of the newest strategies used to introduce potential buyers to the market for distressed homes."

"Once a tiny niche in the real estate market, distressed properties are now a major focus for real estate agents and mortgage brokers."

"Summer's still swinging, but parents are already dragging their kids to local retailers in search of back-to-school bargains that won't break household budgets already rattled by the recession."
'"Consumers have been pessimistic for several months, primarily because of the strains on their budgets from higher gas and food prices," said Stacy Janiak, retail analyst with financial services firm Deloitte."

"The company released a study showing 71 percent of people plan to spend less on back-to-school items this year, while almost half planned to reduce spending by more than $100."

"Zootis, a real estate agent in Windsor, said the soft housing market has been tough on her family and caused her to do everything she can to "squirrel away money for a rainy day."
Ironically, that means more shopping, not less, as she hunts harder for the best deals. "

"It's not so much that we have financial problems, but the job stability is just not there," she said."

"It's been 14 months since Santa Rosa's effort to have a private developer build a downtown residential high-rise and public garage fell apart because of financial difficulties."

"Now, city officials are touting a new developer's plan to build on the same site a six-story boutique hotel that also would include a city-owned, seven-story parking garage."

'"Right now, housing in the downtown seems to be a moot point. The economy is just not there for condos at this time," Bender said."

'"Offering the gloomiest assessment of personal economic progress in close to half a century, a new survey has found that most Americans think they have not made economic progress over the past five years, as their incomes have stagnated and they have increasingly borrowed money to finance their lifestyles."'

"Debt-to-income ratios more than doubled between 1983 and 2004, going from 0.45 to 1.19, the report said."

"About a quarter blame the government, 15 percent blame the spiraling price of oil, 11 percent blame themselves and 8 percent blame foreign competition."


At 8/04/2008 03:25:00 PM , Blogger tom12008 said...

A foreclosure trolley? How very Wine-Country of the local RE community; not a van or a bus, but a trolley! Gotta love it.
Thank you for a new bit of local perspective. What's your take on future tax-revenue losses following re-assessments?

At 8/07/2008 10:04:00 AM , Blogger tom12008 said...

DataQuick just released its June figures for the Bay Area. This should generate some discussion.
The overall outlook is one of decline, but if one is selective, there are figures that can be used out of context to support just about any position.
Just think of the ways realtors can use some of these figures to tell you lies about the stability and rapid recovery that is certainly risng in the eastern sky. I mean, what can 2 sales in Bodega Bay at $900K really say about the state of the county, much less Sonoma or Petaluma. Not much but the delusional will always find exactly what they're looking for, even when it makes no sense.
Disraeli was right: there are lies, damned lies, and statistics.


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