Friday, February 06, 2009

Forbes: Stockton Home Prices to Drop to Mid-1990s Levels

From Forbes:

Topping the charts [of the Forbes Misery Measure] is Stockton, Calif., which was the runner-up on our list last year...Stockton was ground zero for the housing boom and now the subsequent bust. Home prices more than tripled between 1998 and 2005 and then came crashing down last year...Things are not looking much brighter in 2009 as housing prices are expected to fall another 36% on the heels of a 39% drop in 2008. Also, unemployment is expected to jump to 13.3% from 10.4%, according to economic research firm Moody's
[H]ousing prices should keep falling back to their mid-1990s level when the median home price was $130,000.
From Business Week:
It was good while it lasted. But the housing crisis and the recent economic downturn have forced many of the America's fastest-growing towns to adapt to the new reality of falling home prices and rising unemployment. And it's not clear whether the builders will return or whether the nation's next boomtowns will rise elsewhere.
When the construction boom crashed a few years ago in the farming town of Elk Grove, Calif., south of Sacramento, it caught retail developers off guard. The launch of the 1.1 million-square-foot Elk Grove Promenade open-air shopping mall, originally set for 2008, has been pushed off until the end of next year even though the project is nearly complete. Not only is the developer struggling financially, but the mall is located on the edge of a rural expanse where Elk Grove was expected to develop.

"When everything was booming, the builders said, 'We're going to get ahead of the game,'" said Garrick Brown, director of research for Colliers International in the Sacramento regional office. "Usually retailers follow rooftops. In this case, they followed building permits."
From the Sacramento Bee:
The McClatchy Co. will trim payroll, curtail its retirement plan and cut operating expenses by at least $100 million following a dismal fourth-quarter earnings report Thursday. Posting a net loss for the quarter, The Bee's owner is readying its third round of major cutbacks in less than a year. Details are still to come, but layoffs are likely, and the Sacramento publisher will freeze its pensions and suspend contributions to its 401(k) plans.
ADDED - From the Modesto Bee:
County Bank, reeling since the real estate market collapsed in the Northern San Joaquin Valley, was shut down late this afternoon by state regulators, the Federal Deposit Insurance Corp. announced. The FDIC agreed to sell bank's deposits and branches to Westamerica Bank of San Rafael...The move comes a week after County Bank reported its losses linked to bad real estate development loans had swelled to about $96 million.


anon1137 said...

. . .in the farming town of Elk Grove, Calif. . . .

I had to read that about four times. Farming? Farms? Farms of what? Baby farms?

Rows of stucco nests separated by asphalt SUV lanes, occasionally interrupted by a pod of gasoline and pizza stores = the 21st century farm.

PeonInChief said...

It actually was a farming community not that long ago. In fact, I remember cows along Mack Road in the 1960s.