Tag Archives: Housing Market

Economy

Budget This

6 Comments

There’s a certain irrelevancy to all of the back-slapping out of Sacramento for their presiding over a “fiscally sound budget” when you read stories like this:

Sales of houses and condominiums in the most populous Southern California counties fell 29.9 percent from the previous month and 48.5 percent from a year earlier, DataQuick Information Systems said on Tuesday.

The report covers the counties of Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura and showed a total of 12,455 new and existing homes and condos sold in September, the lowest since the company began recording the data in 1988.

Without being alarmist… aw, hell, I’m going to be alarmist.  The real estate market was the only thing propping up the state’s economy.  There’s an attempt to try and trade one bubble for another and re-create the dot-com speculation circa 1998, but that’ll only go so far, too, and that crash will be just as vicious as the first one.  And looming strikes in almost every aspect of the entertainment industry in LA will make life difficult as well.  It’s through little fault of state government, but you can see a pretty clear path to recession now.

UPDATE: On a somewhat related note, you can’t raise a family in California anymore.

The CBP analysis estimates that in order to pay basic bills in California:
A single-parent family needs an annual income of $59,732, equivalent to an hourly wage of $28.72.
A two-parent family with one employed parent needs an annual income of $50,383, equivalent to an hourly wage of $24.22.
A family with two working parents needs an annual income of $72,343, equivalent to each parent working full-time for an hourly wage of $17.39.
A single adult needs an annual income of $28,336, equivalent to an hourly wage of $13.62.

Economy, Los Angeles Area

Housing woes in the San Fernando Valley

11 Comments

Today's Los Angeles Daily News has a story about the rate of housing foreclosures in the San Fernando Valley. And the figure quoted is really quite horrifying. In August alone the foreclosure rate rose 400%. That's right. 400%. The number is mind blowing.  According to the Daily News, 289 homes were foreclosed on in August. In comparison to 58 that were foreclosed last August. The AP published an article this morning positing that a housing slump might produce a recession.

Daniel Blake, at the Economic Research Center at California State University, Northridge sees this trend happening as a result of the large numbers of adjustable rate mortgages that are adjusting to higher rates.

“It's climbing right now, and I don't see any reason for it to drop off that pace,” he said. “These mortgages are continuing to (reset at higher rates), and they will continue to (do so) for the next 12 to 19 months at a pretty steady pace.”

The article notes that there have been 552 foreclosures in the first two months of the third quarter. And expects that the third quarter will have more foreclosures than the second quarter, which closed with 632 foreclosures. And there's this from the AP article:

The Commerce Department reported Wednesday that construction of new homes fell by 2.6 percent in August to the slowest pace in 12 years as troubles. On Tuesday, the National Association of Home Builders reported that its index of builder confidence fell in September to equal the lowest level on record.

Things really are only going to get worse. Here's hoping that Congress takes a hard look at this before it's too late.

Los Angeles Area

Housing bubble deflating

6 Comments

The Southern California housing market is an interesting study in contradictions. Most of the area is suffering from declines in housing sales. And, according to an article in this morning's Los Angeles Times,  things are only going to get worse.  Why do I say the market is a contradiction you ask? According to the article, in August, there was a 36.3% drop in home sales in the 6 counties mentioned in the article. Despite that, the median home price rose 2.7%.

There’s more

The housing data for 6 counties are examined in the article.
In San Diego County the median price fell 4% to $475,000 and sales fell 19.4%.
In Ventura County the median price fell 4.2% to $575,000 while sales fell 31.2%.
In Riverside County the median price fell 6.1% to $394,523 and sales dropped 46.4%.
In San Bernardino County, the median price fell 1.6% to $360,000 while sales fell by 47.2%.

In Los Angeles County, on the other hand, the median price rose nearly 6% to $550,000, despite sales drops of over 30%.
And in Orange County, prices rose nearly 2% to $642,250, also with a drop in sales of over 30%.

According to a recently published study UCLA study,
California’s economy is in for another tough year. But isn’t facing a recession. Yet.

The study specifically mentions that barring a housing crisis, the State should avoid a recession.

With adjustable-rate mortgages scheduled to adjust to higher rates next year, there is a very real possibility that home sales will continue to decline in the region.

Blog Roundup, Health Care

August 23, 2007 Blog Roundup

Today’s Blog Roundup is on the flip. Let me know what I missed.

To subscribe by email, click
here and do what comes naturally.

Electoral Vote
“Reform”and Reform

Voting Integrity

Economic Justice

Health Care

Everyfink Else