"New But Blighted Fields of Dreams"

From the Modesto Bee:

The signs are painted over. The models are empty. All building has stopped at the three Falling Leaf subdivisions in Modesto's Village I. With less than half of the planned 314 homes complete, developer William Lyon Homes has quit construction. Empty lots growing weeds remain. Falling Leaf apparently is the latest victim of the housing market downturn plaguing the Northern San Joaquin Valley.
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Falling Leaf repeatedly cut prices. Example: Its smallest house, a 1,620-square-foot plan, was priced at $379,000 in August 2006, then dropped to $329,990 by February 2007 and dropped again to $269,900 in April 2007. By last month, the development drastically sliced prices on its remaining inventory to about $100 per square foot.

From the Modesto Bee:

Modesto home builder Harinder Singh Toor hadn't planned on being a landlord, but he's become one because he hasn't been able to sell what he's built. Now he rents out eight custom homes, some as large as 5,400 square feet. "I built this house to sell, but I haven't gotten a single bite on it in a year," Toor said about the empty five-bedroom, four-bath house on North Canyon Drive. He had hoped to sell it for $1.2 million, but he'll settle for $3,000 a month in rent, even though that will cover only about half of his carrying costs.

From the McCook Daily Gazette:

The sign proclaimed "House for Sale (bank owned)." The construction looked recent and maybe a little ticky tacky but the place was obviously abandoned, with lawn, landscaping shrubs and trees dying from drought. A house, or three, down the block was not even completed but abandoned mid-construction. The current housing financial crisis is vividly on display in and around Merced, California. It was enlightening to drive through the new but blighted fields of dreams in the town that used to be our home some 35 years ago.
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I asked my host, Jim Glidden, what happened to the people that purchased and then abandoned all the new housing...The speculators from San Jose and other affluent areas simply abandoned their investments. The poor souls who purchased a home to live in are emotionally as well as financially strapped and either leave to rent if their job is still available or just hang on by the skin of their teeth.

From the LA Times:

[Sean] O'Toole, 40, founded the website ForeclosureRadar.com last year. The site, he said, lists every default, auction and foreclosure in California...Rather than join the rush of those mining for gold in distressed real estate, O'Toole has set himself up as Levi Strauss once did. Instead of selling jeans to prospectors, though, he is selling foreclosure data to would-be buyers.
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[In 2002] rather than compete with thousands of speculators flipping new homes, he scoured property records to find distressed houses. Over the next few years he bought and sold 152 such properties...He's stopped buying foreclosed houses because his time and money are tied up in the website, O'Toole said. But he also said he "doesn't want to catch a falling knife" as house prices plummet. Although the foreclosure explosion is fueling his business, foreclosure sales have turned into a speculator's market, O'Toole said.

From the Daily Democrat:

Yolo County officials released their 2008-09 recommended budget Friday, which included layoffs, hiring freezes and other hard-line cost-saving elements to keep even during the lean years predicted to come. "This is probably the most difficult budget for Yolo County in more than a decade," County Administrator Sharon Jensen stated in her budget letter to the Board of Supervisors. "The economy in California is still reeling from the massive shockwaves of the sub-prime mortgage crisis and its effects on housing values, the bond market and the consumer economy." As a result, the report stated the county will have to use $8.3 million of its reserve funds to keep afloat, leaving only $8 million left for a rainy day. In addition, the county's recommended budget proposed the elimination of 118 positions or six percent of the county's total workforce.

From the Sacramento Bee:

The collapsing housing market is squeezing all local governments, but Sacramento County is feeling a special pinch. Today, county supervisors will begin deliberating on a budget that could affect almost every resident in this county. Supervisors face a $123.7 million shortfall, and so they are considering cuts to medical clinics, senior centers, youth programs (to keep kids out of gangs), domestic violence counseling, probation services and many other programs.

From News10:

Cali Krystal of Sacramento said she came to EDD to discuss her efforts to seek work...The former state office technician moved from Santa Barbara to Sacramento in December. "The cost of living was really high in Santa Barbara," said Krystal. "I thought I'd relocate back to Sacramento where a lot of state jobs are here." But her job search has fallen victim to California's tough economic times. "I've been looking for work with the state since January," she explained. "Before they did the state budget cuts, I was being called for interviews back to back. Then once the [budget reduction] bill got signed, it all just stopped."

From the Modesto Bee:

United Way of Stanislaus County warned its partner agencies that a downturn in charitable donations will result in funding delays of up to six months. Overall giving, said Tom Ciccarelli, United Way president and chief executive officer, is down about 9 percent.
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"I've been a CEO for a long time," Ciccarelli said, "and I've never seen an economy like this. What scares me is (the) 'perfect storm' of factors." With food and gas prices climbing, and the bottom falling out of the housing market, Ciccarelli said, more people are worried about hanging on to their jobs and paying their bills.
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At the same time, Ciccarelli said, more people are turning to United Way and its partner agencies for help. "In this economy," he said, "we're seeing, and will continue to see, an increased demand for services. "All my life, I've pretty much been a 'half-full glass' kind of guy. But this is different. We really need to get out front and plan to weather this perfect storm."

From the Chico ER:

A government agency that tracks the price of housing and has flagged Butte County repeatedly for high appreciation again indicates falling prices in this market. The Office of Federal Housing Enterprise Oversight listed declines in Butte County house prices for the first quarter of 2008 in a study released last week...The service showed that comparing the first quarters of 2007 and 2008, Butte County's housing prices were down a little more than 7 percent this year...Long-time appraiser Tom Fiscus of Chico has confirmed that his business is down. "I've seen this (slump) three or four times, but never this bad. I've seen the requests (for appraisals) dwindle."

From Bloomberg:

The California Public Employees' Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines. Sacramento-based Calpers hired Morgan Stanley to review seven land deals it made with joint-venture partners and real-estate advisers, said fund spokeswoman Pat Macht.
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U.S. home prices will fall another 10 percent through the end of next year, with even steeper declines expected in "bubble areas'' in parts of California, Nevada and Arizona where there's already an "overhang of supply,'' Michelle Meyer, economist for Lehman Brothers Holding Inc. in New York, said in an interview.

From the Daily Breeze:

The real estate broker who bought Rep. Laura Richardson's house at a foreclosure sale last month is accusing her of receiving preferential treatment because her lender has issued a notice to rescind the sale. James York, owner of Red Rock Mortgage, said he would file a lawsuit against Richardson and her lender, Washington Mutual, by the end of the week, and has every intention of keeping the house. "I'm just amazed they've done this," York said. "They never would have done this for anybody else."

From The Hill:

The Congressional watchdog group Citizens for Responsibility and Ethics in Washington (CREW) on Tuesday fired a shot at Rep. Laura Richardson (D-Calif.), describing her financial problems as “appalling” and calling her a “deadbeat congresswoman.”...“Rep. Laura Richardson’s appalling financial dealings raise serious questions about her ethics,” Sloan said in a statement. “What kind of responsible adult — much less elected public official — only pays her bills when she’s called out by journalists?

From KCRA: