Wednesday, February 07, 2007

Real Estate Advertising, Taxes, and Pot

From the Sacramento Bee:

The difficult times are far from over. The Bee's owner still faces an advertising and circulation slump that hurt the latest financial results and is expected to continue at least through June.
"The overall advertising climate grew more difficult in the fourth quarter," Chairman and Chief Executive Gary Pruitt said in a conference call with investors and analysts.
One big trouble point is classified advertising. McClatchy's classified sales fell 5.5 percent in the quarter and were down in every region of the country except the Pacific Northwest. Things will remain tough as the depressed housing market in California and Florida hurts real estate advertising in the coming months, Pruitt said.
Also from the Bee:
California's troubled real estate and construction sectors are likely culprits for state income taxes falling $1.3 billion below projections in January, state Controller John Chiang said Tuesday.

Chiang noted the revenue shortfall at a news conference highlighting changes that will affect state residents as the tax preparation season gets under way.
The reasons for the sudden decline in income tax payments aren't yet clear, Chiang said. But the controller cited continued weakness in the state's housing sector, as well as fewer California companies going public.

"Obviously, we've known for a while that the real estate sector is slowing down," Chiang said at the news conference at the Franchise Tax Board Processing Facility on Butterfield Way. "Associated employment in the construction activity over the year is down.
The statewide downturn has triggered earning losses and layoffs throughout the real estate, financial services and construction sectors.
From USA Today:
Rick Estrada didn't think it particularly odd that he never saw his next-door neighbor or that curtains were always drawn. On his block of new homes, everyone was a recent arrival. In fact, some homes still sit empty, owned by investors hoping to "flip" them at a profit.

Never in his darkest dreams did Estrada think the two-story house a few feet from his contained an indoor marijuana-growing operation that authorities believe is the latest wrinkle in drug traffickers' efforts to hide their illegal business.

"We came from San Jose to get away from that stuff," says Estrada, 42, a medical clinic supervisor with a wife and three young children. "Now here we are and it's right next-door."

Estrada watched on Jan. 12 as federal drug agents busted into the unoccupied, stucco-clad house, hauling out enough marijuana plants to fill a truck, along with high-intensity lights, fans and other indoor hydroponic growing equipment.

Agents that day raided five other houses nearby in Lathrop and one in Tracy, both suburban cities full of commuters to San Francisco Bay Area jobs. In August and September, 41 houses were busted in Elk Grove, Sacramento and Stockton.
"They're purchasing homes and plunking down marijuana factories smack dab in the middle of our residential neighborhoods," Taylor says...Growers paid up to $750,000 for houses in new subdivisions, usually obtaining 100% financing and putting no money down.
Samantha Malone says she's moving."I have babies. I don't want to be around that," she says. "Who's to say it's all taken care of anyway, or it's not going to happen next month."


Gwynster said...

But wait... there's more

House #49

anon1137 said...

The news this week makes me feel happy to be a renter. With Bush asking for $700B to carry out aggression around the world, problems in Israel and Iran growing, every month another country being added to the "axis of evil" list, not to mention global warming, I see a lot of risk in this economy. There just isn't much good news out there. If the US does slip into recession this year, problems in the housing sector will be exaggerated.

Economic Despair said...

Check out this video clip from the UK.

It is a primer in how to conduct a real estate scam:

Glenn Roberts said...


Hello. I am a real estate reporter for Inman News and I'm working on an article about the real estate bubble debate and the numerous bubble bloggers. I'm wondering if you'd care to share your thoughts. If you'd like to participate feel free to send me an e-mail at I'm working on the article today (Feb. 8).
Thanks. -Glenn

. . . . . . . . . .
Glenn Roberts Jr., reporter
Inman News,
(800) 775-4662 x137 or
(510) 658-9252 x137
FAX (510) 658-9317
1480 64th St., #100,
Emeryville, CA 94608
. . . . . . . . . .

Jeff said...

gwynster, your link doesn't work.

Gwynster said...

rats I hate it when Sacbee puts up a story then removes it.

They busted pot house #49.

Gwynster said...

Found it covered on the modesto Bee site

Patient Renter said...

Classic post on Mish's blog today.

loosely discussing the effects of monetary policy on the housing market

Diggin Deeper said...

"Classic post on Mish's blog today"

IMHO, Shedlock gives us a good look at the powers of excess. While moderate inflation is great for real estate, one must assume that the financial base of the country is well grounded and not subject to unforseen upheaval. Doesn't appear to be the case in our economy as these lquidity excesses have translated into an overburden of consumer debt coupled with hybrid loans that make the debt problems worse. The fact that subprime lenders are now forecasting much deeper losses than were anticipated (HSBC and New Century Financial), only leads some to believe that we're just getting warmed up on mortgage.bomb problem. All the cliches like location, locatio, location, buy now it'll be better later mean very little when the problems are much bigger on a national front. Doomsday? No, but its raining awfully hard for those without umbrellas.

Patient Renter said...

"Doomsday? No, but its raining awfully hard for those without umbrellas."

I think it would be hard to associate most crashes with a doomsday, although in any moderate crash, many people are hurt very badly. People were hurt bad in the 90s crash and people have already been hurt badly in this crash. Doomsday is all relative.

wannabuy said...

They busted pot house #49.

You should do a special article for pot house #50 and #100.

Got popcorn?

mayor said...