The Central Valley's 'Deep Recession'

From News10's Dana Howard:

Last September, I was driving through the newer neighborhoods in the northern section of Stockton, looking for people who were facing foreclosure. It was one of many stories about the rampant number of foreclosures in the Sacramento area.

My strategy was to knock on the doors of homes that had "For Sale" signs posted out front. Surely, I thought, many who would be selling their homes in what was then a climate of depreciating home values must be selling out of financial necessity, possibly to avoid foreclosure. We must have knocked on 50 doors. The overwhelming majority of the doors were unanswered. It wasn't because the owners weren't home, but because the owners would never be home. The houses were vacant.

People had plain given up, abandoned their homes. It was less than a month later that I did a similar story in the North Natomas community of Sacramento. Again, the same result. That said to me we are in for huge economic trouble that would go beyond the real estate and banking industries.

From homesforworkingfamilies.org [pdf report]:

Sacramento Metro Homeowner Vacancy Rates
2005Q1: 0.6%
2006Q1: 2.0%
2007Q1: 3.3%
2007Q3: 4.8% (4th highest rate out of 37 metros)

From Bloomberg:

"Conditions vary widely across the country, from a deep recession in the Central Valley of California to still boom-like conditions in parts of the Farm Belt,'' said Mark Zandi, chief economist of Moody's Economy.com in West Chester, Pennsylvania.

From the Associated Press (via CBS 13):

The house was ravaged -- its floors ripped, walls busted and lights smashed by owners who trashed their home before a bank foreclosed on it. Hidden in the wreckage was an abandoned member of the family: a starving pit bull. The dog found by workers was too far gone to save -- another example of how pets are becoming the newest victims of the nation's mortgage crisis as homeowners leave animals behind when they can no longer afford their property.

Pets "are getting dumped all over," said Traci Jennings, president of the Humane Society of Stanislaus County in northern California. "Farmers are finding dogs dumped on their grazing grounds, while house cats are showing up in wild cat colonies."
...
The situation has become so widespread that the Humane Society urged home owners faced with foreclosure to take their animals to a shelter. Shelters are trying to keep up, but the spike in abandoned pets comes at a time when fewer people are adopting animals. Home sales are plunging to their lowest level in decades, and new homeowners are often the most likely to seek a pet.

Even people who are buying homes are not adopting pets. "People are not bringing home puppies because times are tough, and animals cost money," said Sharon Silbert, president of Animal Rescue of Tracy, a community near Stockton.
...
Bloggers are furious with the "foreclosure pet" phenomenon, especially after seeing photos of emaciated animals on the Internet. Some critics say the pet owners have already proved they are irresponsible by buying houses they could not afford or mortgages they did not bother to understand. "They see a pet as property, no different than a worn sofa tossed into the alley when the springs pop," says a posting about foreclosure pets on About.com.

From the Stockton Record:

Amid all the anguish arising from the swelling volume of home foreclosures, there has been much talk about real estate fraud. But most of the complaints can't be criminally prosecuted, representatives of the San Joaquin County Office of the District Attorney said Thursday.

Most allegations won't mean charges either because the borrowers didn't tell the truth about income when applying for a loan or the buyers chose to believe they would be able to make the purchase work later with a refinance - but the market tanked and what amounted to speculation didn't pan out, said Robert Buchwalter, criminal investigator with the district attorney's office.

James F. Lewis, deputy district attorney in charge of the real estate fraud unit, told those attending a Northern California Housing Counseling Network quarterly meeting Thursday: "Some of these (filing complaints) are legitimately naïve and uneducated, and we have to try to figure out whether they are truly victims."

From News 10:

Facing a $55 million budget deficit, the City of Sacramento may be forced to cut funding for the city police and fire departments...Every department in the city, including the police and fire departments, has been ordered to submit proposals for 10 to 20 percent cuts.

From the Sacramento Bee:

City officials believe the involuntary layoffs are perhaps the first for Sacramento. "To my knowledge, we've never before laid off anyone," said Assistant City Manager Marty Hanneman. In the 1990s there were voluntary layoffs, he said.

From the Sacramento Bee:

More troubled housing talk: One of the biggest bank-owned home auctions yet is set for Feb. 16-17 at Cal Expo. Real Estate Disposition Corp., an Irvine auction firm, aims to unload more than 300 houses located in area counties during the two-day event. That's about one-third of the nearly 1,000 homes going on the auction block during seven days in Stockton, Sacramento, Modesto, Fresno and San Mateo.

From the Sacramento Bee:

The decline in new home construction means less money to build roads in El Dorado County. But some members the county Board of Supervisors expressed dismay that the El Dorado Hills area, long the county's fastest-growing community, appeared to be taking the biggest hit in terms of proposed road projects. "El Dorado Hills is a huge economic generator for us," said Supervisor Helen Baumann, whose district covers part of the community. "This is a huge statement to anyone wanting to come into the county."