Monday, December 10, 2007

Industry 'Laying Off Long-Time Employees Right and Left'

From pacificunionhomes.com (hat tip reader HS):

As I am sure you are aware, we all are experiencing a major downturn in our industry. These adverse conditions in the market have forced us to re-evaluate the Company’s future as a homebuilder. Accordingly, Pacific Union Homes has made the decision to cease further homebuilding operations. We will continue to build-out and sell those homes currently in production, including the model homes.

Pacific Union Homes is a diversified real estate company, with homebuilding being only one of its many operations. Although, the Company has decided to no longer operate as a production homebuilder, we will continue to focus on land development and our other real estate-related businesses. [Read more]

From the Lodi News Sentinel:
Real estate, lending, appraisal and title company offices have laid off employees and closed offices during the housing slump. "They're laying off long-time employees right and left," said Lodi Realtor Rose Mendonca.
...
Earlier this year, Chicago Title Co. closed its Lodi office and consolidated with the Fidelity National Title Co., and four employees have lost their jobs, according to Renee Primasing, a marketing representative at the Fidelity office on Kettleman Lane. That leaves four in Lodi's Fidelity office. And in Galt, Alliance Title Co. will close its doors in the near future, with two employees being transferred to the Greenhaven office off Interstate 5 in south Sacramento. Alliance's Elk Grove office has already closed, according to employees in the Galt and Sacramento offices who asked to not be identified.
...
Stockton-based Grupe Co. has suffered with their new-home market, said CEO Kevin Huber...[who] estimates that 20 Grupe employees have been laid off in the past year....
From the Associated Press:
Plenty of locally owned stores are facing a struggle. In California's San Joaquin Valley, Christina Perret said the foundering housing market has caused sales to sag at her three high-end women's fashion clothing shops and forced her to reconsider her stock. Perret's gotten rid of racks of flashy tops with plunging necklines that were favorites with real estate agents, substituting a line of conservative sweaters popular with farmers' wives. "We're going after the wives of dairymen and women in agriculture because their economy is so much more stable," said Perret, 25. "Even moms who come in shopping with their daughters for prom aren't wanting to spend as much now. They want to buy dresses for $200 max and know their daughters can wear it at graduation next year."
From the Stockton Record:
A decline in money transfers and increased reverse migration is expected due to the troubled housing market and the lack of construction jobs, said Jose Rodriguez, director of El Concilio (Counsel for the Spanish Speaking).

"The construction industry has taken a hit. It's a ripple effect for them," Rodriguez. Also, he said, homeowners are cutting back expenses such as landscaping and other services. That's a problem since a vast number of immigrants work in the service industry.
From the Stockton Record:
The auction of 61 foreclosure homes in San Joaquin County last month resulted in the sale of two out of three of the homes offered in no-minimum bidding in Stockton...Typically, more than 90 percent of top auction bids are accepted by highly motivated banks...."Banks may not have a complete understanding of the Stockton market yet, so expectations may be above what's happening in the market," she [a spokeswoman for Hudson & Marshall] said.
...
Another agent with a half-dozen listings in the auction, Cindy Mello of Home Buyers Realty, Stockton, said not one of the bids for her listings was accepted or negotiated to a sale. "It says the auction doesn't work, that it's a marketing ploy," she said. "I don't think the banks are ready to negotiate yet."
From the Sacramento Bee:
C.C. Myers, the contractor whose road-building exploits have become the stuff of California legend, said Friday he is working to stave off foreclosure on his Auburn area country club development. Wachovia Bank, in a 23-page complaint filed Wednesday in U.S. District Court in Sacramento, alleged that Myers has defaulted on more than $61 million in loans and is seeking to foreclose on the 1,100-acre Winchester Country Club.
From KCRA:
From News10:
As recently as last spring, Myers told a construction trade magazine that despite the housing slowdown in other areas, Winchester continued to see "solid demand" for high-end homes.
From the Sun-Post:
Two Manteca housing developers that purchased the right to build homes in town in 2005 persuaded the City Council this week to let them hold on to that right until 2010, hoping that the housing market will turn around by then. Developers Marvin Brochinni and Atherton Woodward Partners had originally promised the city they would give up reservations for any homes they failed to build within two years. However, plummeting property values and a glut of unsold homes in the city have upended both developers’ subdivision plans, and they now hope that waiting a couple of years will help get their projects back on track.
From the Redding Record Searchlight:
In September, I reported that the worst might be over for real estate in Redding -- cautious optimism stemming from a second-quarter federal housing index.

Maybe not.

In its latest index, the Office of Federal Housing Enterprise Oversight (OFHEO) says home prices in Redding in the third quarter of 2007 were 3.66 percent lower than in the same quarter a year ago and 2.54 percent lower than the second quarter of this year.

19 comments:

Diggin Deeper said...
This comment has been removed by the author.
Diggin Deeper said...
This comment has been removed by the author.
Diggin Deeper said...

Might of well dd this to the mix

Mortgage crisis forces big cuts at WaMu

http://news.yahoo.com/s/ap/20071210/ap_on_bi_ge/washington_mutual_4

3100 getting pink slips.

Ooops! Then again, maybe we're out of the woods...Ya Think?

Pending home sales unexpectedly rise

http://news.yahoo.com/s/nm/20071210/bs_nm/usa_economy_housing_dc_5

sacramentia said...

This is getting ugly. I think I'm going to fill up my garage with cheap wine so I have something tangible to sell that people need when the wheels fly off the train.

Patient Renter said...

Wow, that bit about the country club is crazy. As with all bad things real estate, we can expect to see more of the same.

Perfect Storm said...

As I am sure you are aware, we all are experiencing a major downturn in our industry.

Oh that is a damn shame and right around Christmas time to boot, oh well!

paranoid renter said...

This is an exact replay of what happened to engineers during the tech bust. Several long time engineers ended up on the bench. It takes very thick skin to survive when you're in the midst of a bust -- you have the crappiest managers and a dog-eat-dog attitude. All about survival of the fittest. I'm reminded of an email that I got from someone after I gave a talk at a meeting - he said had worked in sales/marketing at telecom companies all his life but was, at the time, selling vacuum cleaners at Sears because he simply could not find another job.

Cmyst said...

Three old friends lost lucrative jobs during the tech bust, and one son-in-law. None of them currently earn anywhere close to what they were making back then, and all of them are currently working in fields other than computer technology/programming.

paranoid renter said...

I have a feeling a lot of these real-estate folks will be in health care in 2-3 years. That's the next booming area.

Gwynster said...

Cmyst,

Add me to those tech bust numbers along with a lot of friends. I took a 2/3 paycut just to keep working and have benefits. The people I know who are still in tech in Sacramento either work for the state or work for Intel. I don't know of any independants still standing.

Also found out that a friend of a friend isn't doing well. He's a broker and will be lucky if he makes 30k this year. Apparently he used to pull down 120k or more a year easy.

SacramentoCrash said...

The big problem for this region is that recent growth in the the economic base was in two employer groups:

Finance, Real Estate and Insurance (in the tank)

Government - state and local (flat A$$ broke)

I thought the Fed and Bush said that we have a vibrant economy with sizable job growth?

SacramentoCrash said...

How to drive the government into bankruptcy:
______________________________________

From Charles Hugh Smith's blog:

http://www.oftwominds.com/blogfeb07/pensions2.html

How easy it is for public employees to plunder the public:

I have a friend who became a firefighter at 20 after taking a few classed at the College of San Mateo. He “works” for a department in the East Bay (I put work in quotes since in his suburban district with “paramedics” the “firefighters” rarely go on a call and he will often go a full month without going on a call).

Since my friend has only had to “work” (go in to the station) 10 days a month over the past 20 years he had a lot of free time to start an apartment investment company. Over the past 3 years he has only gone in to the station on average 6 days a month making lost of guys happy since they get paid overtime to work his shifts.

He has decided to retire at 41 and let the taxpayers pay him just over 50% of his last years salary (plus medical and dental an vision for his entire family) for the next 40 to 50 years. He is working hard to push his “last years” salary well over $200K playing what is called the “overtime game”. The guys will pull out favors and get co-workers to call in sick when they are next on the overtime list so they work as much overtime as possible their last year often doubling their last year salary (and retirement pay for the next 50 years).

Forgot a couple other games they get to play, the “retire” and get a new job game.

You can “retire” as a captain at one department and take a new job as the chief of another department and get retirement pay + your new salary.

They can also retire with a “stress” disability and get almost all their retirement pay tax free. Google around and you will get sick to your stomach.

Below is a link to a guy that did the double dip and stress game:

'Chief's Disease' rife at CHP: pursuit of injury claims boosts top officers' retirement benefits.
__________________________________

Didn't CalPERS buy a bunch of those mortgage "tranches" bags of $htt?

Speaking of CalPERS - How bout that $40 Billion in unfunded retiree health care liability?
_______________________
At issue is health benefits for retired public employees. The math is straightforward: Politicians are making promises to today's workers that will require either huge tax increases or draconian cuts to other programs when the employees reach retirement age. Neither the state nor most local governments are putting aside a dime to cover this liability.

Gwynster said...

Only .25 rate cut and the markets are pissed >; )

smf said...

"How to drive the government into bankruptcy"

Solution to all government deficits:

Make them match typical civilian job pay and benefits.

People have no idea how well rewarded some government jobs are.

As shown, some can easily take on second jobs that afford them a nice salary increase. That is also double dipping.

Embdddsgnr said...

I'm sorry, I've got to rant a bit about the comparison of REIC jobs to tech jobs in the dot com boom:
Technical professionals have not had trouble finding work in the last 5-7 years, even in Sacramento.
Sure, you've got HP and Inhell, but there are dozens of smaller companies in all areas of high tech, many of which are hiring (get a copy of the Business Journal's annual High Tech Directory).

Of course, when I say "professional" I am not talking about web page jockeys earning $60K/yr. or IT drones with a cert and who know which check boxes to click. I am referring to true Engineers of the Electrical, Biomed, Software, Computer, etc. variety. Those with the true skills have the jobs. So it will be with the true professionals in the Real Estate, Banking, Brokering, and even Construction industries. Companies may come and go, there will be layoffs and thin times, but they will still be working in five years. The rest will be back slogging milk crates at the grocery or serving up your latte. Maybe some of the smart ones will wind up in healthcare like PR suggested.

SacramentoCrash said...

Do really you want a mortgage whore giving you an injection or running an IV?

paranoid renter said...

>>>>>
Do really you want a mortgage whore giving you an injection or running an IV?
>>>>

You may not have a choice. I dread seeing the doctor and I dread even more ever going to a hospital. The healthcare system is so broke and, just like housing, it must break some more (probably a lot more) before it starts getting fixed. At the moment it is super bureaucratic and with the financial stresses, I'm sure lots of people need to see doctors, and lots of nurses are needed...

In the last few years, every second person in the Sac area seemed to work in some housing related job. In the next few years, they'll be working in healthcare jobs.

But I digress...this blog is about the housing crash in Sacramento. :-)

paranoid renter said...

As embdddsgnr suggests, tech is definitely booming right now (may be not that much in Sac but Sac's not doing bad either). With right skills one could beat Y2K salaries.

norcaljeff said...

As recently as last spring, Myers told a construction trade magazine that despite the housing slowdown in other areas, Winchester continued to see "solid demand" for high-end homes.

I love to see liars and people pushing fraud to lose. Ideally it would be nice to see him lose his personal home. I wonder if Sippin is his spokesman, they seem to push the same lies and spread misinformation about the state of the real estate market.

Regarding those fire fighters, etc: I've known about this for a long time. Ever year you see the big overtime scam. A few years back I saw an article about 30 Oakland fire fighters who made over $100K and 10 made over $200K. The chiefs salary was lower than most of his underlings. And why are those of us in the private sector paying for pensions for those in the public sector when most of us ourselves will NEVER see a pension? It's all a scam!