Déjà Vu

From the Sacramento Bee:

An unrelenting housing slump that has driven down the region's home values and sent sales into a tailspin is expected to strike local governments next year, curbing the record growth rates in tax collections that pushed some budgets into the black for the first time in years.

From downtown Sacramento to rural Amador County, financial officials and county assessors say they're watching a gathering storm that's initially expected to blow into their budgets during the 2007-2008 fiscal year beginning July 1.
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In Sacramento County, for example, Assessor Kenneth Stieger expects that the 15 percent jump in taxable property values that fueled this fiscal year's budget could drop to as low as 6 percent growth in next year's budget. Such a decline could cut revenue projections for the general fund by as much as $18 million. Sacramento County's budget is about $2.2 billion.

"We will have perhaps the largest growth drop year to year we've seen in modern times," said Geoff Davey, the county's chief financial officer. "Looking at multiyear growth up and down, we couldn't find a single year where the rate of growth dropped by more than 4 percent over the last 20 years."
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Meanwhile, the housing slump also is cutting into taxes steered to government treasuries by buyers spending heavily following their big purchase. "I'm sure it's going to show up in sales taxes, too," Davey said.

From the Stockton Record:

The day before Thanksgiving, about 30 Stockton workers had no job, when Meek's Lumber & Hardware, 2050 N. West Lane, did not open for business. Customers and professional contractors were surprised by the sudden closure Wednesday as they arrived at the longtime Stockton lumberyard to pick up building supplies.
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About a half-dozen former employees were gathered in the Meeks parking lot Wednesday morning. They said they were told at 3 p.m. Tuesday that business was off, the Stockton store would be closing and their jobs were terminated.
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A former employee who worked at the lumberyard for about four years said the store had cut back on personnel in recent months, but "just two Saturdays ago, they told us everything was OK."
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"The lumber market right now is in turmoil," said [Don] Woxberg, who started in sales at San Joaquin Lumber on West Scotts Avenue 35 years ago. After seven good years for lumber suppliers, he said, "everything started going south in January. Prices are cheaper now than they were five years ago." That's put a serious dent in profit margins as other expenses such as wages and other employee and energy costs have risen steadily.

From the Stockton Record:

Real estate experts say investors increasingly have been cashing out here on the sale of commercial real estate property, which, unlike the single family home market, is holding its valuation just fine in a strong state economy. Then they're looking to buy comparable property in pockets of the United States - mainly in the Southeast, Texas and the Midwest - where they get a bigger bang for the buck, and the rents there are still pretty good.
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David Muscovic, a Stockton real estate investor, improved his cash return after he sold an older 14,000-square-foot office building in downtown Stockton for $1.4 million and bought 20,000 square feet of newer, better-quality office space in Macon, Ga., about 60 miles south of Atlanta.

"I felt like there weren't good enough returns in California, so I started looking in other states," he said. Plus, he feels some negative pressures on California's commercial property sector that will hurt valuation in the Central Valley.
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There has been a lot of California selling to buy elsewhere, said Michael Yesk, a regional vice president for IPX 1031, a San Francisco-based investment property exchange service. Over the past five years, there has been huge growth in people wanting to sell and move out of state, he said.
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Yesk expects to see more commercial-property sales in California because owners will become less confident that the market will continue to rise. "We're certainly not seeing dumping of buildings left and right like you do in single-family homes," he said.