Friday, December 21, 2007

Sacramento Job Growth At Lowest Level Since 1993

From the Sacramento Bee:

[EDD labor market consultant David] Lyons said it was disturbing that the region has added just 6,600 jobs in the past year, a growth rate of just 0.7 percent. "We haven't been below 1 percent since 1993," he said. Unemployment has risen 1 percentage point in Sacramento in the past year. With housing still suffering and state government likely to slow down its hiring in the face of an estimated $14 billion budget deficit, the short-term outlook for Sacramento is spotty at best.
From the Sacramento Business Journal:
Year-over-year, construction fell by 7,200 jobs in the region, a 10.1 percent decline, while financial jobs declined by 3,100, off 4.7 percent. Those declines were steeper here than in the state as a whole. Statewide, construction was off 3.8 percent, down 35,400 jobs, while finance fell 1.9 percent, or 18,200 jobs.
From the Sacramento Bee:
As a long hard year of layoffs draws to an end for Sacramento-area home builders, Irvine-based MBK Homes has joined the club. A company spokeswoman says an unspecified number of cuts were made recently to "right-size" the Sacramento operation. MBK, a division of the Japanese trading firm Mitsui & Co. Ltd., and a prominent builder in Southern California, arrived in the capital region at the height of the housing boom in 2005 and began building during the slump that followed.
From the Stockton Record:
Job losses from the housing-market slowdown in San Joaquin County will slow job growth from 1.3 percent in 2006 to 0.4 percent this year, said the new fourth-quarter economic report from University of the Pacific's Business Forecasting Center.
Despite substantial fallout from housing and sectors tied to it, job growth overall has only been moderated, said Sean Snaith, director of University of Central Florida's Institute for Economic Competitiveness and consultant to University of the Pacific's Business Forecasting Center. "We haven't seen the wholesale spreading of the housing doom and gloom into the other sectors," he said.
Joe Anfuso, president and chief executive officer of Stockton-based Florsheim Homes, said most of the construction cuts already made may be all that's needed to adjust to the slowdown unless the market makes a sharp decline. "I would be surprised if most builders of substance haven't let go of 40 percent of their people since the downturn started," he said.
From the Sacramento Bee:
In Sacramento County...13.4 percent of November sales were for homes priced below $200,000, the Sacramento Association of Realtors reported. That's up from 9.5 percent in September. Homes selling for less than $250,000 represented 30 percent of November's closings, statistics indicated. "We never dreamed we'd see that again," said Mark Welch, executive manager of Connect Financial Services in Roseville.
DataQuick reported that in November 2,503 homes closed escrow – 26 more than the previous month – in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That's an 11-year low for a November...The firm attributed much of the November rise to a jump in closings of new homes, 744 compared to 656 in October. That may reflect builder discounts and sales promotions in late summer and early fall. In September, for instance, New Jersey-based K. Hovnanian Homes reported 47 sales one weekend while offering area buyers fully furnished homes.
Home builders like to clear inventory off their books before the year ends. Last year they reported a late surge of December sales. But "there's no indication of an upward trend" this year, said Jane Enger, analyst with the Ryness Co., a home builder consultant in Danville.
Sales/Price Data by Zip

From the Modesto Bee:
Stanislaus' median home sales price plunged 23 percent this November compared with last November [and 28% from peak], according to DataQuick Information Systems. That was the steepest decline in California, at least among the counties with large populations...San Joaquin median sales prices dropped to $329,500 in November from a year ago, a 21.7 percent decline.


andnee said...

Nothing in San Joaquin county is worth 329,000 Large. Wow.

Diggin Deeper said...

Bill Gross speaks:

From the Financial Times as reported through Agora Finanacials "5 Minute Forecast" today.

“U.S. growth in 2008 will primarily depend on the direction and level of U.S. housing prices, and on the effectiveness of the Fed’s response to weakness in housing. Housing prices are down 5% nationwide already, and could perhaps decline another 10% over the next several years. The 2008 outlook for housing prices will be a function of whether the Fed can cut off a worst-case scenario, but we think continued weakness in housing and slower economic growth are already baked into the cake for next year. U.S. GDP growth should average about 1%in 2008, with personal consumption expenditure inflation averaging about 1.9%.”

“The Fed cannot afford to see housing prices go down by 15% or 20% -- that is an asset deflation of significant proportions -- and so the Fed needs to allow future homeowners to be able to purchase homes. The way to do that is to lower the cost of financing.”

More from Agora:

"This time last year, when the Fed’s lending rate was 5.25%, the average rate on a 30-year fixed rate mortgage was 6.13%. Today, with the fed fund rate a full percentage lower, at 4.25%, the rate on the same mortgage is 6.14%"
Hmmmm...we keep pushing rates lower and mortgage rates are not responding...could it be tied to the weakening dollar?

Zero job growth in Sacramento with falling home prices and rising inflation equals a recession that's already underway. It's just going to take time for people to digest it as fact.

Cmyst said...

They can't allow the asset to deflate, but they obviously didn't have any problems with inflation to a ridiculous level in housing.

KTM 300 said...
This comment has been removed by the author.
Cow_tipping said...

15 t0 20% was so last year.
15 - 20% every year for 3-6 years is what I am calling at this point.
Why ???
Its called serial 80-20 ing.
Like this, each house has an 80% and a 20% lets say, or not, but I know many do ...
Bank repoes, the 20% disappears and house gets on market with that 80% as its list $$.
Some stiff buys it - This whole cycle takes 9-12 months. he finances with 80-20 (OK OK maybe no) and then defaults, cycle stars again. One more 20% ... next year, repeat, next, repeat ... if you say that 80% isn't a viable price at the time of first sale, you're making my point even bigger and deeper. So, iteratively 20% loss per year, YOY for 3-6 years.