Saturday, November 17, 2007

Job Growth Will Save the Housing Market...Or Not

From the Sacramento Bee:

California's job market continued to stall out last month, as the housing slump infected the rest of the economy and increased the chances of a recession. Although the statewide unemployment rate was steady at 5.6 percent in October, some 15,800 payroll jobs disappeared. Job losses were recorded in practically every major economic sector, the state Employment Development Department said Friday.
Sacramento's picture isn't much brighter than the rest of the state's. The region's unemployment went up a tenth of a point, to 5.5 percent. That compares with 4.2 percent a year ago.

Last month's payroll job growth in greater Sacramento came to zero. Perhaps more striking, the retail sector, which should have begun hiring for the holidays, reported no gain in jobs. That suggests retailers – who recorded modest growth in sales across the country last month – are skittish about the season as consumers hunker down.
The news might not get much better. State government has been one of the region's bright spots lately, generating nearly half of Sacramento's new jobs in the past 12 months. But hiring could slow as the state faces a deficit in the next fiscal year estimated at $9.8 billion by Legislative Analyst Elizabeth Hill.
Nearly 8 percent of the Sacramento area's construction workers have lost their jobs in the past year; so have 11 percent of its mortgage lenders and 8 percent of its real estate agents.
Not surprisingly, the commercial real estate market is sagging, too, particularly among retailers. Sacramento brokers say vacancies have crept up and rental prices are coming down. Construction of new projects is waning.
From the Appeal Democrat
Yuba-Sutter’s jobless rate is up from a year ago with fewer jobs in financial activities and construction due to a housing slump. October’s 8.8 percent unemployment rate was up nearly two percentage points from the year-ago estimate of 6.9 percent, according to figures released Friday by the state Employment Development Department.
From the Modesto Bee:
Unemployment rates in the Northern San Joaquin Valley continued to climb last month, battered by the housing slump and seasonal cutbacks at manufacturing firms. Stanislaus County's unemployment rate last month was 8.5 percent, up from 8 percent in September, according to state Employment Development Department figures released Friday. It's also well above the October 2006 rate of 6.7 percent.
San Joaquin County also saw higher unemployment rates last month, at 8.1 percent. That's compared with 7.8 percent in September and 6.3 in October 2006. San Joaquin differed slightly from Stanislaus in that its largest losses were tied to the housing and mortgage crisis. The construction sector posted the biggest drop, losing 1,100 jobs compared to the previous year. "That's quite substantial for the area," Baker said. Construction was followed by the professional and business sector, which includes title and mortgage companies. It was down by about 900 jobs.
From the Redding Record Searchlight:
October unemployment in Shasta County reached a nine-year high, the state reported Friday. While the jobless rate in October nudged up to 7 percent from 6.9 percent in September, it was the highest October since 1998, when it was 7.1 percent. The unemployment rate in October 2006 was 5.4 percent.
From ABC30:
All six valley county's now have unemployment rates that are more than a point higher than a year ago. Including Merced which had the largest increase at one-point-six percent.

The struggling housing market is one of the biggest factors in the rising unemployment rate. The Valley has lost thousands of jobs in construction and other related industries over the last year alone.
"I've gone from 12 loan officers to 2 or 3 within the last six to eight months, which really is a significant drop," said Scott Crawford, All-American Mortgage. But Scott Crawford believes the situation isn't as bleak as it may seem. He says the market is simply returning to normal. "The only time a bust is created is when there's mass exiting of population, and we're the opposite here, we're still gaining population," said Scott Crawford, All-American Mortgage.
From the Stockton Record:
This was the first formal auction of foreclosed homes in the Stockton area, and the event drew a standing-room-only crowd of more than 300...This was an auction, with no minimum set bids, of 60 foreclosed homes that had sat on the market unsold for at least several months. All homes were "sold," although the banks that repossessed the homes can reject the top bids in coming days if deemed too low.
Cindy Mello, with Coldwell Banker The Vintage Group, had a half-dozen listings up for auction, and she said the top bids came in at about 40 percent under the current list prices. Although Hudson & Marshall says more than 90 percent of top auction bids are accepted by highly motivated banks, Mello said most of the top bids were discounted too steeply for most banks. "I just don't think the banks are going to give those discounts yet," she said. "That's just too low. For the banks, their sweet spot is about 15 percent below."


bubblemachine said...

The top bids came in at about 40 percent under the current list prices.

There is no way the banks will accept bids that low. You are just going to have a bunch of pissed off bidders that wasted their time for nothing.

Until the banks get a good dose of market reality and lower their expectations, these auctions will be just a cruel joke.

Gwynster said...

Hey Sippin, about that great job market propping up the RE values?

Um, or not >; )

Cow_tipping said...

If the banks reject the bids, do auctioneers still get their cut. Cos it is sold and it was a non reserve auction.
The increase in unemployment is just 2%, WTF, are they counting illegals ??/ of course not, cos no one has a number on how many. They count when they get jobs, cos payrolls go up, when they drop, unemployment rolls dont swell, ergo, the numbers are really frocked up. We look like there is 40% more people working now than before the boom.

Tyrone said...

Tyrone said:
If that "best deal" isn't a mark-down of 30-50%, forget it; you're just a sucker,

Cindy said:
Cindy Mello, with Coldwell Banker The Vintage Group, had a half-dozen listings up for auction, and she said the top bids came in at about 40 percent under the current list prices.

Ahem. Any questions, dumba$$ realtards? LOL

Tyrone said...

Do you remember the Schimpfs?

From this site:
Like Riding a Roller Coaster - Headed Steeply Down

Just checked their place on Zillow (4016 Hubbard). It reports no sales info, and while Z-estimates are very high, it has an estimate below what the Schimpfs want. Z-est: $394K. They wanted $549K. They got an offer of $362K, but as Ernie said, "Guess he figured that if you're desperate, you'd take it." I hope the Schimpfs don't have plans for moving anytime soon.

Diggin Deeper said...

Hmmmm...a 30% increase in unemployment for Sacramento in the span of a year?

What job growth?

Real said...

I do not know when the October MLS stats were released, but I just looked at them and the 1221 for new escrows was the highest total since Oct'05. I assume a lot will fall through, but it would point to month over month increases in sales coming....1 point does not make a trend but it is encouraging.