Empty Houses, Full Shelters

From CBS 5 (and video):

In the Central Valley community of Manteca, police have a new job: patrolling hundreds of foreclosed houses left empty and abandoned. They are half million dollar houses, often bought with nothing down, turned into suburban blight. To get a firsthand look, CBS News correspondent John Blackstone rode along on patrol with Manteca Police officer Rex Osborn, who explained, "you make one right-hand turn and immediately this is what we see - dead grass, bushes are dying, trees are dying. The next thing you know you have squatters in the house..."
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But for neighbors the problem that really bites is fast-falling house prices. ust-retired Corky Hine retired wanted to sell for $400,000. Now his home is worth $339,000 and his real-estate agent still can't get anybody to look. "I already dropped it $60,000 (from the original appraisal price,)" Hine said. "She said 'There's like 500 homes for sale within a two-mile radius of mine, and 150 of them are in foreclosure within a mile or something.'"
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"You can’t give these houses away," Osborn said. And neighborhoods are left with the wounds of a mortgage meltdown: the houses nobody wants.

From News 10 (also video) (hat tip Max):

Roughly 10,000 homes in the Sacramento region are in some stage of foreclosure. That means thousands of homeowners, often with their children, are in a fix to find some place to live. Shelters in the area are showing the first signs that some in search of a new roof over their heads will be luckier than others.
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St. John's is limited in what it can handle. It's already at capacity, and the shelter is now turning away 55 women and children each day. That's more than twice the 25 a day it had been turning away during the first half of the year. "Though you can't tie anything directly to the economy and the foreclosure rate, something has to be there because we've never seen an increase like this so rapidly and so dramatically," said [director Michelle] Steeb, who adds a third of the women have jobs.

From M&C:

Newlywed Sheila Haller had her doubts when she and her husband plunked down 425,000 dollars in early 2006 to buy a nice, three-bedroom home in the fast-growing California town of Folson in the arid foothills outside the state capital of Sacramento. 'It seemed too much like that TV show Pleasantville, cookie-cutter homes with no character,' Haller said.

From her small, tidy back garden, you can see what she means. Throughout the area, on hill after hill, earthmovers have cut ribbons of road that have been lined with thousands of new homes and apartments in recent years. 'It was the American dream,' Haller says. 'Everyone was (buying a house) and making money, so we went for it.'
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The housing crash is worst for those unable to afford to stay in their homes. But it has also come as a life-altering shock to those like the Hallers, who are still paying their mortgage but see other houses in their neighbourhood selling for significantly less than they paid. 'It's definitely wrenching,' she said. 'We worked so hard to get a downpayment on this house, but now the mortgage is greater than what the house is worth.'

From Realty Times, Market Conditions - Stockton:

The entire Central Valley of California (and, in fact, the entire State, with a very few exceptions) is in the worst real estate downturn in my 30+ year career.
THERE, I'VE SAID IT!
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First: This is not a time to play or test the market. If you don't HAVE to sell...absolutely...don't list it now and, if it is listed... get it off the market.
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Second: If you know you will have to sell in the next five years...SELL NOW..as in... TODAY! Everyday you wait your equity is melting away with the market. So, if you're retiring and moving in 3 years...SELL TODAY! If you're taking over your Dad's business in Iowa in 2009...SELL TODAY! If you have a new home being built due to be finished in six months...SELL TODAY! How serious am I? From 2005 to 2006 we lost 13% value. From August 2006 until now we've lost another 18%! Many of you have lost more than $100,000 and it's getting worse.
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Oh, and if you bought your home with 100% financing with an ARM with Neg/AM thinking you could refinance when the payment went up...think again. You now owe more than the home is worth, so no refi for you.

From Kiplinger's California Letter via the OC Register:

[California] median home prices should slip by 7% [in 2008], with new houses taking a hefty 10%-15% hit. Biggest declines will be in the Central Valley, the Inland Empire and the San Diego area.

From the Sacramento Bee:

Just weeks after lawmakers enacted a state budget amid partisan turmoil, finance officials say revenues are slipping below projections, making it likely that next year's problem will be worse than expected. Based on major tax receipts collected in the first two months of the new fiscal year, California could face a $8.6 billion operating deficit or more in 2008-09 if the state's economy and soft housing market continue at the current pace. That would be 40 percent higher than the $6.1 billion gap officials anticipated in August...State departments have been told to propose no new spending next year unless they cut a like amount from an existing program.
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[T]he soft housing market continues to have a ripple effect on the state treasury [said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto]. While property tax goes directly to local governments, the money is counted against the state's share of school funding under a complex formula set by Proposition 98. If property taxes local government generates declines, the state shoulders a bigger burden to fund K-14 schools.

Property taxes aren't expected to be as robust this year, particularly in places like Sacramento, as homes stop appreciating and sales weaken. Forecasters recently predicted the housing market won't begin to recover until 2009, and a recession could quickly delay that recovery by more than a year.

There's even a possibility that homeowners in the Central Valley -- where home prices have dropped -- will seek reassessments on their homes in an effort to pay less property tax. "If a house down the block just sold for $100,000 less than yours, you'd want a reassessment," Levy said.