The Housing Bubble

ABC 7 News reports from California. “Monday was just another day at Marsh Creek Elementary in Brentwood. School keeps kids focused on things other than the housing slump which has devastated this community. Just a few miles away is the City of Oakley where 620 homes so far this year have been lost to foreclosure. ‘If you drive through a subdivision you see all these vacant and empty homes, and the prices on the homes are 50 percent less than what they paid just two years ago,’ said teacher Dave Behling.”

“Behling bought a house while waiting to sell his old one. When the market collapsed he was unable to sell, forcing him into foreclosure. His wife now has a second job. ‘We’re pretty much like everybody else, pay check to pay check, which is something new to us, because we were never like that,’ he said.”

The Ventura County Star. “More than 400 people who waited in line early Monday morning — some for more than 24 hours — to apply for one of 140 affordable apartments at Oxnard’s RiverPark. Two years ago, Ismael Martinez never thought he’d be in need of an apartment. After years of running his own carwash business, he saved enough money to buy his own home. Then the economy turned, his business decreased and his mortgage reset, doubling from $1,800 to nearly $3,600. He’s sure that his house will be in foreclosure and he’ll need a place to live.”

“‘When your dream comes down and you can’t keep going, you have to give it up,’ he said from an RV where his family took turns warming up over night.”

The Daily Press. “The San Bernardino County Board of Supervisors Monday launched what officials say is a ‘bold economic recovery plan’ to address area foreclosures and the mortgage meltdown. About 42,356 homes in San Bernardino County currently are bankowned, scheduled for auction or have been subjected to notices of default. In the past 11 months, property values in San Bernardino County have plummeted nearly 42 percent. Neighboring Riverside County has seen even more dramatic rates of foreclosures, pushing the two-county region to the forefront of the nation’s foreclosure crisis.”

“County officials say the Economic Recovery Corporation is the best way to manage thousands of residential properties that once were owneroccupied but are now vacant magnets for crime, or that are being snapped up for prices below their real value and turned in to rentals.”

“‘Inland communities are becoming blighted, unemployment is soaring and demand for countyprovided social services is on the rise as a result of this unprecedented economic crisis,’ said Board of Supervisors Chairman Paul Biane.”

“In the next two years, about 240,000 homes in the Inland Empire homes are expected to enter into foreclosure, with experts predicting cataclysmic economic losses that may reach $100 billion.”

The Desert Sun. “The growing number of foreclosed home in Desert Hot Springs is taking a toll across the city, officials say, and on Tuesday the City Council voted unanimously to tighten regulations on owners to better maintain those properties. More than 1,500 of Desert Hot Springs’ nearly 11,000 homes are either bank-owned or in some stage of foreclosure, according to a recent Riverside County report.”

“‘There are literally blocks that are empty,’ Councilman Karl Baker said during a Tuesday meeting. ‘Things are tough – they’re going to get tougher.’”

“The median price of Coachella Valley homes fell 34 percent in October to $225,000, a level not seen since February 2003. In September, the 865 home sales closing escrow posted a 65 percent year-over-year hike, the strongest since January 1988. Fifty-one percent of the homes that closed escrow in October across Southern California had been foreclosed on at some point over the year, according to DataQuick.”

“‘The rise in sales indicates that buyers continue to take advantage of bargains in the marketplace, as the inventory continues to trend upwards, and as more properties with troubled loans contribute to the number of properties for sale,’ said Greg Berkemer, executive vice president of the California Desert Association of Realtors.”

“Most of the price reductions have taken place, and new properties coming in are matching the prices, Berkemer added, observing: ‘Buyers are in a good place.’”

“Thousands of applicants showed up Tuesday and more are expected today for the Jackalope Ranch job fair, where 200 jobs are up for grabs. Job fairs earlier this year at the SuperTarget and Winco stores in north Indio also drew thousands of people looking for work. ‘We expected big crowds, but this is overwhelming,’ said Lee Morcus, co-founding principal of Kaiser Restaurant Group.”

“Coachella resident Rosa Gonzales hasn’t had a job in seven months and was there Tuesday hoping to snag one. ‘It’s hard. There are no jobs,’ she said in Spanish. Carlos Quintanilla, 20, of Indio said he’d take any position they offered him. ‘I pretty much need a job. Not a lot of places are hiring,’ he said.”

The Burbank Leader. “When retailers opened their doors early Friday at the Town Center Mall, it was not to the huge crowds usually seen the day after Thanksgiving. ‘I’ve been here for three years, and I’ve never seen it this slow,’ said Jessica Carls, of Los Angeles, as she came out Old Navy just before 6 a.m. Friday morning laden with three shopping bags.”

“For Pasadena schoolteacher Ana Morales, sales at Old Navy and Bath & Body Works mean gifts for the kids, but not as many for the adults in her life. ‘I’ve definitely cut down on my Christmas spending,’ Morales said.”

The North County Times. “Key measurements showed the region’s economy buckling dramatically in October and suggested that the situation will continue to worsen for the next six months, an economist said Tuesday. The University of San Diego’s Index of Leading Economic Indicators fell 2.3 percent in October, the sharpest drop on record.”

“‘An already difficult situation took a decided turn for the worst,’ economist Alan Gin, who compiles the index, wrote in an accompanying report.”

The Union Tribune. “‘What that says is that there’s no end in sight as far as the downturn is concerned,’ said Gin. ‘And there’s at least a little bit of worry that things could be accelerating on the downside.’”

“Residential building permits declined by more than 50 percent over the past year, largely because of a sharp drop in apartment and condominium construction. Economists previously hoped that San Diego’s early entry into a slowdown meant that the county would be able to recover earlier than other regions. But the depth of the national recession and the constriction in credit has darkened that outlook. Few economists now believe that the county will recover before the nation as a whole.”

The San Diego City Beat. “Of all the unpleasant changes that have come John and Jessica Browning’s way during the past couple of years, perhaps the hardest was the realization that they’d been living in a fantasy world. Anxious to be part of the booming San Diego real-estate market, the Brownings purchased a two-bedroom, 830-square-foot condominium three years ago in Point Loma.”

“‘We bought at the high end at the time, when the market was peaking,’ says Jessica, about to have her second baby. ‘There was a kind of panic at the time that if you didn’t get in the housing market now, when home values were gaining $50,000 to $60,000 in equity every six months, you’d be completely priced out.’”

“The Brownings secured an adjustable-rate mortgage for the $420,000 condo. Soon after, the housing bubble popped, and as it deflated, so too did the couple’s illusions that they were financially well situated.”

“‘We needed to refinance,’ Jessica says. ‘We were pretty confident—we thought that when we refinanced, we’d have a small amount of equity to reinvest. But the market kept depreciating, and we almost couldn’t even get the condo appraised. The mortgage companies were being more cautious about who they lent to. We had to borrow about $50,000 from a friend to stay in the condo.’”

“The Brownings finally managed to refinance into a fixed-rate, negative-amortization loan. The Brownings soon found that the home that was to be their nest egg was only sinking them further and further into debt.”

“Desperate to get out of their mortgage, the couple concluded that the only option left was to ’short-sell’ their home. The couple put the condo on the market at $100,000 below the value of their mortgage. At the time CityBeat spoke to them, they had two offers on it and reckoned they’d have to move out right around the time their baby was born.”

“Three years after wading into the San Diego real-estate market, the Brownings were leaving it deeply in debt, their credit shredded, their confidence shaken. Unable to afford another property in the Southern California market, the couple was considering leaving the state for Reno, Nev., where Jessica has family.”

“Nonetheless, Jessica remains optimistic about her family’s future—to a point. ‘If we can get into a situation where we don’t have a lot of debt, we’ll be OK,’ she says. ‘But once I start thinking about having bad credit—I’ve never been in a situation like that. I’m just nervous about the unforeseen things popping up and having bad credit.’”

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The Denver Post reports from Colorado. “David Craig knows how draining it can be to make payments on a home that is worth less than the mortgage debt on it. The Brighton-area resident and his wife have struggled the past two years to carry not one, but two, homes valued at less than what’s owed on them. ‘You hear about how bad the economy is,’ said Craig, a truck driver. ‘Until my housing situation stabilizes, there is no way I’m going to spend a lot of money on the house.’”

“Denver ranked 41st out of 163 metro markets for its percentage of homes with negative equity, said Zillow spokeswoman Amy Bohutinski. Of the 425,000 homes purchased in the past five years in the metro area, 144,000 are underwater. The problem is a result of overbuilding in a superheated housing market as easy mortgage money was extended, beginning around 2003, to people unable to repay over the long term.”

“‘This housing market is underwater in a way we have never seen, not even in the 1980s and 1960s,’ said Jim Spray, a licensed Arvada mortgage broker who specializes in difficult home financing situations.”

The Post Independent from Colorado. “The Garfield County commissioners on Monday signed off on a request to allow the developers behind a 48 townhome-lot subdivision in Spring Valley to delay moving forward with their project for up to one year. The people behind Eagle Ridge Townhomes, slated for construction near Colorado Mountain College, sought the extension ‘due to the current economic conditions, which have affected potential marketing and financing opportunities,’ wrote David McConaughy, a Glenwood Springs attorney representing the developers of the project.”

“In July, the developers behind the 577-housing-unit Spring Valley Ranch development, southwest of Glenwood Springs, sought and received a one-year extension on their preliminary plan from the county commissioners. A few months later, the commissioners approved a request to delay a preliminary plan for the Lexie Meadows Estates subdivision, a 37-lot project west of Silt. In an October letter seeking the delay, a planner for the subdivision wrote that ‘market conditions have changed substantially in recent months and the housing market has essentially dried up.’”

The Arizona Daily Star. “The Barrios de Marana was supposed to be a new town core, mixing and matching residential and retail development on 38 acres in the heart of Marana’s rural landscape. But like many planned developments during these turbulent economic times, Barrios de Marana has been put on hold. The development group behind the plan filed for Chapter 11 bankruptcy Sunday.”

“Jack Neubeck, a member of the limited-liability company, said that while the Marana Town Council had given the project the green light, his group simply couldn’t get financing. Despite the bankruptcy filing and credit crunch, Neubeck said he is confident the development will go ahead once the housing market stabilizes.”

“‘It’s possible,’ he said. But ‘right now, boy, it’s tough.’”

The Arizona Republic. “On two parallel streets in south Tolleson, residents are struggling to hang on to their homes. Others are stuck, unable to sell because they owe more than their home is worth. The same story is playing out across the Valley today. So far this year, about 35,000 homes have been lost to foreclosure. Thousands more are headed in that direction.”

“Gloria Sanchez is among those stuck. She and her husband bought their house last year from the builder for $255,000, paying less than some of their neighbors who bought before them. The couple made a down payment of $50,000, money from the sale of their last home. ‘I’ve already lost the $50,000 I put down,’ she said.”

“Rocio Monteil lost her job as a secretary a few years ago but didn’t worry about their $1,800 monthly mortgage payment. Her husband’s wages as a plumber could pay the bills. But now his hours have been cut, so Rocio is looking for a job. So far, she hasn’t had any luck. Their adjustable-rate mortgage payment is about to climb, too.”

“The Monteils bought their home from the builder for $244,000 two years ago. Rocio Monteil thinks it’s worth about $140,000 now. The couple are among nearly one-third of Arizonans who now owe more on their mortgage than their house is worth.”

“‘We can’t afford to keep this house,’ she said. ‘We don’t have equity.’”

“Real-estate agent Sheri McBroom is trying to sell a house in the neighborhood for a couple hoping to avoid foreclosure. The owners of the home paid about $300,000 in 2006, put 20 percent down and paid to have the yard landscaped. The house is listed for $155,000, and still other homes in the neighborhood are selling for less.”

“‘Values have dropped so drastically,’ McBroom said. ‘I think it’s all about the timing of the homes being built at the peak of the market.’”

“The National Bureau of Economic Research on Monday reported it had determined the United States officially entered a recession last December. Scottsdale-based economist Elliott Pollack said Arizona still suffers from problems that are going to take years to resolve.”

“‘People have too much debt. They don’t have enough savings. Their asset values in their stock portfolios and the house are way down, so they feel poorer and will spend accordingly,’ he said. ‘The international economy is weakening, so exports aren’t going to be as strong. Industrial markets will be weak. And the housing market again is still in decline because of all the foreclosures and the excess supply. So, there are a lot of things that have to be corrected.’”

The Herald Journal from Utah. “Cache County homebuilders are feeling the impact of what the U.S. Department of Commerce has reported is the lowest level of construction of new homes nationally in about 50 years. ‘It’s down more than half for us,’ said Mike Carlson, president of Mendon-based Brent Carlson Construction. ‘We’re trying different advertisement methods — magazines, the Internet, bigger ads in phone books, but right now people don’t want to spend money.’”

“Carlson said his perception is that for most restrictions have returned to what they used to be 10 to 15 years ago. ‘My first loan I had to have a certain amount of equity down. I had to have so much money up front, had to have a job that was bringing in income,’ he said. ‘That’s what they’re going back to.’”

“That doesn’t mean people shouldn’t build, he said. It just makes sure those who do will be able to pay it back.”

In Business Las Vegas from Nevada. “What’s the good news about the housing market these days? At least it’s not commercial real estate. That’s the sentiment expressed by Tim Sullivan, president of San Diego–based Sullivan Group Real Estate Advisors. While experts on retail, office, industrial and other commercial development lament the state of their industry on panels he has appeared on recently, Sullivan says he has the best news to deliver.

“‘We were the deepest into it, and we will be the first out of it, but the commercial guys … we have retailers who are going out of business, and people not renewing leases. (They) are feeling contraction. As for residential, we have been going through that for two or three years,’ he said.”

“Sullivan characterizes the housing market as hitting the bottom, but there are plenty of issues to overcome before there is a recovery. The challenge at this time is to get prices to stop eroding, but foreclosures are contributing to that problem, he says. For the market to turn around, there needs to be fewer foreclosures, less home inventory, more job creation, more liquidity in the market, increased consumer confidence and less debt.’

“‘We have the fundamentals in place. Will they happen, and will they march us into a recovery the first quarter of next year? No, but we have Southern California next to us with 25 (million) or 26 million people. It is a feeder market and still higher priced. It’s relatively affordable here compared to the rest of the Southwest,’ Sullivan said.’”

“New home prices can’t fall any lower because they are below their replacement cost, Sullivan say. He says he sees builders constructing even smaller homes of 1,000 to 1,800 square feet and not the 3,000 to 4,000 square feet built in the past.”

“Dennis Smith, president of Home Builders Research, reports 842 new–home sales in October to bring the yearly total to 9,134, a decline of 7,758 or 46 percent. There were only 19 high–rise closings in October to bring the yearly total to 1,044 or a drop of 1,342 or 56 percent, Smith says.”

“Smith even took a veiled shot at Las Vegas housing analyst Steve Bottfeld. ‘It is pretty obvious how the change in the credit markets have devastated the high–rise industry,’ Smith says. ‘It seems like only a short time ago, there was a story in the local paper that an expert predicted the death of the local single–family (home) segment. That was a good one.’”

“Falling home prices and economic turmoil have softened demand for new homes, so it’s fortunate that Coyote Springs won’t see its first residents until at least the end of 2010. A year ago, the planned city-from-scratch in the middle of the Mojave Desert, 55 miles north of Las Vegas, was expected to welcome its first residents by the end of this year or first half of 2009.”

“Pardee Homes is the master developer for the project’s single-family and multifamily homes. The first phase of the plan calls for about 10,000 homes, with other phases adding to the total of 160,000 units on 43,000 acres - eventually making it one of the largest cities in Nevada.”

“Coyote Springs developer Harvey Whittemore…said he was unconcerned about falling home prices, saying the numbers released by research firms are misleading and don’t tell the story about the housing market. If most of the homes selling are at the lower end of the scale, that’s going to drive down that median price, Whittemore said.”

“Coyote Springs is well positioned to be affordable by land prices that are $500,000 an acre below prices paid in the valley, he said. Homes are expected to cost $200,000 to $400,000 in the first phase, Whittemore said. ‘If you take nothing but the average of Volkswagens selling, you are going to get a lower price,’ Whittemore said. ‘The bulk of the homes $500,000 and above are not going down by 35 percent to 40 percent.’”

The ee from Nevada. “Jeremy Aguero, a principal in Las Vegas research firm Applied Analysis, pegged the start of Nevada’s economic shrinkage to 2007’s fourth quarter, right before the nation’s slump began. Nevada beat the nation to recession because of its reliance on retail and home-building — the two key sectors that drove the country into its tailspin.”

“‘Our economy was uniquely positioned to take advantage of the run-up in consumer spending and construction activity between 2003 and 2007, and now, it’s uniquely positioned to get hit by the downturn in those areas,’ Aguero said.”

“Nevada suffers along with other high housing flyers of the last half a decade, most notably California, Arizona and Florida.”

“Joe Hules and his daughter-in-law, Cathy Hules, co-own SavvyLux Furniture and Design. The family owned two local Thomasville Furniture stores until earlier this year, when both locations closed. Cathy Hules said the family noticed a slowdown in traffic and sales as far back as September 2006. The Huleses have been using the ‘R’ word for months, she added.”

“‘You only have to go up and down the street to see the vacancies, not only in the homes, but in the businesses that have closed up,’ Joe Hules said. ‘I would say people weren’t paying attention if they couldn’t see it (the local recession).’”

The Reno Gazette Journal from Nevada. “In the past nine months, Sam Patel has seen obvious signs of the slow housing market and economy from behind the counter of his convenience store in Cold Springs. ‘As soon as you see people coming in and paying with change, you know they’re getting their piggy banks out,’ said Patel, owner of the Spring Mart for two years.”

“The slow real estate market and large number of home foreclosures has hurt local businesses throughout Nevada and the Cold Springs area, about 15 miles north of Reno, is a prime example. Dozens of bank-owned or real-estate owned homes are on the market, and while sales have increased since June 1 compared to the first six months of this year, the average sale price has gone down.”

“That could be a good thing for people who are looking to buy, but not so good for sellers. ‘When we say the sellers, we’re talking about the banks and REOs (real estate owned),’ said Dickson Realty agent Michael Mentaberry, a 24-year real estate professional. ‘A significant number of these (North Valleys) properties that are for sale are these types of properties.’”

“Three years into the collapse of the housing market, the sight of foreclosure and for sale signs isn’t exactly shocking for people in Washoe County. But even the most jaded resident would likely be surprised to witness five such signs in just one block. Take a walk down Stead resident Adam Cobert’s street and that’s exactly what you will see.”

“Since moving into his neighborhood two years ago, the next-door houses have been like a virtual revolving door, the 26-year-old said. ‘That house has been empty for about a year,’ said Cobert while looking at one of the nearby homes. ‘That other one, I don’t know if it was a rental property but people were just coming and going. (The last residents) were just there one day and gone the next. It’s been empty for at least six months.’”

“Even as he maintained that everything will eventually work out, Cobert said it would be nice to see people moving into his neighborhood again largely because of what it means in the big picture. ‘I’d like to see all these houses fill up,’ Cobert said. ‘That means people can afford things again. It means we’re finally getting out of this crisis.’”

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The Missoulian reports from Montana. “The Missoula Symphony Orchestra is not in the business of selling houses. But that hasn’t shielded the local orchestra from feeling the effects of a slowdown in the Missoula housing market and the broader economic downturn that is sweeping the nation. Late last summer, the MSO learned that two of its major sponsors - one of them a local real estate company, which John Driscoll, executive director of the orchestra, declined to name - would not be supporting the orchestra with cash donations this year. Driscoll’s sentiment is echoed at other local arts organizations and businesses around the area. Though none says it is panicking, most have begun to see signs of a slowdown in charitable giving. And all are worried that they’ve only seen the tip of the iceberg.”

“‘Fundraising has been a struggle,’ said Tom Bensen, director of the Missoula Cultural Council. ‘There are a lot of longtime funders who are either taking a break this year or are contributing less than in the past, and it’s been hard to get new donors. If you don’t have an established relationship with a potential donor, nobody’s in a state of mind to add more donations and advertising to their budget.’”

“Ram Murphy, operator of Murphy-Jubb Fine Art, hasn’t seen any real signs of a slowdown in sales at his downtown fine art gallery. In fact, he wonders how much the national economic crisis has really hit home in Missoula. ‘Right now, we seem to be doing fine,’ said Murphy. ‘Who knows,’ he added, “by March we may all be on our knees. But not yet.’”

The Hungry Horse News from Montana. “Plum Creek Timber Co. announced last week it would cut 68 jobs from its plywood plants and has also informed its four logging contractors that there’s no work for them. The lumber markets are the worst in almost three decades, notes Shawn Church, editor of a publication that tracks lumber markets for the wood products industry.”

“Church said that some lumber prices are actually lower, even if they’re not adjusted for inflation, than they were in the recession of the early 1980s. ‘The industry as a whole is dealing with a historical downturn,’ he said.”

The Capital Press from Oregon. “Tree seedling nurseries have been hard hit financially on two fronts. The housing market free-fall has sunk lumber and timber prices, reducing logging operations and thus cutting demand for seedlings for reforestation. At the same time, large numbers of Christmas trees have been reaching maturity and tree prices have fallen in recent years, reducing that industry’s demand for seedlings as well.”

“‘We’ve seen a tremendous downturn in orders,’ said Tom Jackman, CEO of IFA Nurseries, which produces seedlings for forestry in numerous locations in Oregon and Washingon.”

“A downturn of this magnitude is probably unprecedented in the industry, Jackman said. ‘Before, we were saying, ‘At least it’s not as bad as the early 1980s,’ he said. ‘Now, the consensus is that it’s much worse than the early 1980s.’”

“According to the Random Lengths information service, the composite price for framing lumber fell to $234 per thousand board feet - a 50 percent drop from the most recent peak in August 2004 and the lowest price in at least the past decade. Tom Jackman of IFA Nurseries said that market conditions have gotten so bad that customers would rather abandon their contracts and lose cash security deposits than buy pre-ordered trees.”

“‘People aren’t harvesting, they’re not logging,’ he said. ‘People are just leaving them with us.’”

The Lake Oswego Review from Oregon. “Struggling homebuilders are looking for a lifeline from local governments, asking for flexibility on rules and fees to help them get back to building. Joe Keizur, interim vice president of government affairs for the Home Builders Association, said builders are essentially calling in favors from governments after being generally cooperative with fee increases while building was lucrative. ‘Right now we need some reciprocity,’ said Keizur.”

“The Oregon Employment Department noted 11,000 construction jobs were lost in the development sector between September 2007 and September 2008. Many small-scale home builders and contractors aren’t counted in those figures, or in the current unemployment rate of 7.3 percent, because they are self-employed. ‘It’s probably as bad a building environment than it’s been since the ’80s and given that, we need jurisdictions to help us out,’ Keizur said.”

“In other communities, larger problems loom. In Happy Valley, Bethany, Sherwood and Wilsonville along with other areas of both Clackamas and Washington counties, stalled construction projects and vacant subdivision plats blight the communities.”

“In Tualatin, Mayor Lou Ogden plans a meeting with the Home Builders Association where he is likely to grant extensions for approvals and permits in that town. Ogden said he was open to talks about any action Tualatin could take to get building back on track there. ‘We’re interested in looking at ways to not pull the rug out from under these builders as they try to wait out the storm,’ he said. ‘We’ll talk about whatever their issues are. We’re all in this together.’”

The Oregonian. “Shoppers throughout the Portland area swarmed the malls as they hunted for gifts and deals. Debbie Jackson and Annie Montgomery always shop together the day after Thanksgiving. Jackson’s just doing less of it this year. Her husband’s heating and air conditioning business has seen things slow down because of the housing downturn.”

“Montgomery, though, plows ahead with her shopping. She’s a real estate broker from Bend, where the housing market is in tatters, but Montgomery remains upbeat. ‘It’s going to turn around,’ she said. ‘People just need to get some confidence in the market.’”

“Ryan Strasshofer is the Bend-based representative of a Eugene company that is Oregon’s leading buyer of homes at foreclosure auctions. It’s his job to sift through the ever-growing number of homes entering the foreclosure process to see which ones his company might buy and rapidly resell. ‘To summarize our business model, we sell them cheap because we buy them cheaper,’ said John Helmick, Strasshofer’s boss.”

“Defaults seem to come from every economic caste, but there are common causes: divorce, layoffs, luxury purchases and too much leveraging of falling equity, said Strasshofer, who operates as a private contractor. ‘It’s amazing how many homes I drive by and see a new boat or motor home in their driveway, and they’re in foreclosure,’ he said.”

“According to company statistics, of 111 homes put up for auction in Deschutes County in October, five sold. The rest reverted to the lenders holding the liens. ‘What’s happening is that the banks have not dropped the price low enough to get interest from buyers,’ Helmick said.”

The Newport News Times from Oregon. “For many, the holiday season means extra spending - on gifts, travel, accommodating guests, etc. And for those who may not have any savings stored away, the weeks prior to the holidays are an ideal time of year to earn a little extra cash with a seasonal part-time job to help out with extra expenses. But this year is different. With the economy in turmoil and the future looking bleak, many Lincoln County businesses have scaled down or outright eliminated their hiring of extra help for the final months of the year.”

“The number of seasonal or temporary job postings by local businesses are at an historic low, said Sandy Mies-Grantham, business representative for Newport’s Worksource Oregon. She said that retail industry employers are those that typically hire the most seasonal or temporary help. ‘I’ve never seen numbers this low,’ she said. ‘It’s just not happening.’”

“‘The easiest place for any business to save money is by limiting its workforce costs by cutting back as much as possible on hiring, especially during the holiday season,’ Rob Abbott, work force analyst for the Oregon Department of Employment, wrote in a statewide September report.”

“He continued, ‘If the holiday hiring pattern of previous years holds true, look to see fewer holiday-related jobs this year than we have enjoyed in recent years, with the December peak in holiday-related retail trade possibly dropping to 2005 levels. We are wrestling with the uncertainty of an election year, high energy prices, a housing downturn, and a credit crunch in the banking sector of our economy. With all of these things coming to bear on our economy, the outlook is less than stellar for holiday employment in Oregon. Many stockings won’t be brimming with the plenty of recent years.’”

The Seattle Times from Washington. “Real-estate agent Jonette McGrew is willing to do what it takes to make a property competitive in the market. Sometimes, that means weeding flower beds, washing windows and painting interior walls. McGrew recently began offering free staging services for her clients. ‘In this market it is a must, no question,’ she said.”

“‘The days of just taking the listing and putting it into the [Multiple Listing Service] and letting the MLS sell the property are gone,’ said Brigitte Pascutoi, managing broker at John L. Scott Real Estate’s Bellevue North office.”

“Bill MacDonald, (a) 20-year real-estate veteran recently broke out the toolbox to add double-crown molding to kitchen cabinets, replace light fixtures and install oil-rubbed bronze hardware in a client’s home in Woodinville. MacDonald picked up the listing in July, after it had been on the market a year. He worked with the owners to modernize it with new carpet, paint, landscaping and other changes. He also got them to drop the price $70,000 to $839,000. Now, he’s scheduled multiple Sunday afternoon open houses at the property to entice potential buyers through the door.”

“‘It’s vacant. It’s staged. It’s absolutely perfect inside,’ MacDonald said. ‘And yet it’s impossible to get somebody in to look at it.’”

“For some real-estate professionals, the change in the market is a reminder of why they got into the business in the first place. ‘I didn’t really like the frenzied market,’ said Dennis Brown, president-elect of the Seattle King County Association of Realtors. ‘People had the conception that Realtors were foaming at the mouth. We were so busy. But our business is all about relationships, and when the market is that busy, you don’t have time to build long-lasting relationships.’”

“Seattle architecture firm Weber Thompson had 82 employees when it moved into its new headquarters building in South Lake Union this spring. Now? 54.”

“Seattle-area architects are feeling the chill as the local and global economies cool. The development pipeline on which they depend is drying up. Several firms have laid off employees because there simply is less work. The Architectural Billings Index, a national measure of industry health devised by the American Institute of Architects, declined more steeply in October than in any previous month in its 13-year history.”

“Part of the problem is many larger projects with plans and permits in hand are stalled, often because developers can’t get financing. Weber Thompson’s Web site, for instance, shows eight high-rise projects the firm has designed in downtown Seattle. Two are built. One is almost finished. The other five are on hold.”

“‘When you look at financing and equity requirements, the landscape has changed completely,’ said Mark Woerman, a principal with Seattle firm CollinsWoerman. ‘People just truly don’t know what to do.’”

The Spokane Journal of Business from Washington. “Including transactions involving new and older dwellings, single-family home sales in the first 10 months of the year in Spokane County totaled 4,359 units, down 28 percent from 6,042 sales in the year-earlier period. Meanwhile, the median price here for home sales closed in October was $177,000, down 4.3 percent from $185,000 in the year-earlier month, says Rob Higgins, executive vice president of the Spokane Association of Realtors. ‘We’re having a modest reduction in prices,’ Higgins says.”

“It’s more common for the number of homes on the market to decline around the holidays, when fewer sellers choose to list their homes, says Ken Lewis, the broker at Prudential Spokane Real Estate, which has offices in Spokane and Spokane Valley. He believes, however, that the reduction in inventory between the end of August and Oct. 31 is more than just a normal seasonal adjustment, and says he’s encouraged by that.”

“‘Maybe we will get inventory down to a manageable level,’ he says. ‘The market here isn’t terrible, it’s just that buyers have a lot of choices.’”

The Columbian from Washington. “Higher-end retailers are showing signs of a struggle this year, said Mike Merrill, co-owner of Pro Golf, a shop that offers golf equipment, clothing and custom golf services. ‘In the Portland-Vancouver area, eight independently owned golfing stores have recently gone out of business,’ he said.”

“Merrill blamed the uncertain economy for a 20 percent drop in his store’s sales in recent months.’Golfers are going to buy from you anyway because it’s their passion,’ Merrill said, although he blamed his store’s slipping sales, in part, on Clark County’s plummeting home-building industry. ‘Our bigger customers have been the Realtors and home builders. Now we can’t count on them,’ Merrill said.”

“Local home sales that were down by 33 percent through October have also affected furniture stores, said Keith Koplan, owner of Koplan’s Home Furnishings in downtown Vancouver. ‘Our sales are down significantly,” said Koplan.”

“Koplan predicted big-ticket sales would continue to slide into 2009, primarily because cash-strapped homeowners can no longer secure the home equity loans that helped finance those purchases. Slowing home sales and declining values limited the ability to obtain loans, which homeowners routinely borrowed against.’

“‘The ATM known as your house has shut down,’ Koplan said.”

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Readers discussed the economic fallout from the housing bubble. “My wife and I decided to speed the bust along by not participating in the consumer aspect of Christmas this year. Beyond a couple bottles of wine for our folks, we’re instead making a donation to our two favorite non-profits. My parents are definitely going ‘lite,’ or so they say. But I think it’ll take a couple more Christmas years before we see the real pain–all those rich people ARMs are just starting to reset, so they probably still have access to credit. 2009 or 2010 for total bust.”

A reply. “I have been fed up with the consumerism related to Christmas for years. In our family we mainly just give gifts to kids anyways, so aside from having a nice dinner we don’t spend all that much. But I get the sense that lots of people are doing the same thing. The housing bubble led to a credit and debt bubble, and this in turn led to a retail bubble. One by one they pop, and as each one goes, it sows the seeds for the popping of the next one.”

One had this. “As a lifelong miser who years ago told others (except my brother’s children) that there would be no gifts from me and there should not be any vice versa, i enjoy this year’s xmas spectacle of shut down the wallets. The american sheeple have needed this bat in the face for a very long time, and they are still sitting on the curb wondering why their face hurts so much.”

And one had this quote. “I had three pieces of limestone on my desk, but I was terrified to find that they required to be dusted daily, when the furniture of my mind was all undusted still, and threw them out the window in disgust. - Henry David Thoreau.”

From Marketplace. “Tess Vigeland: This week many of us were busy stuffing a turkey or pounding mashed potatoes into a pulp, but not everyone was lucky enough to be feasting. I met Elaine, a 41-year-old mother of two from Altadena, California, at the Foothill Unity Center. She was there with her six-month-old. Elaine: ‘We really just don’t know what’s going to happen, but we’ve been in foreclosure 77 days now, so…’”

“Elaine worked as a loan processor. Her husband was a mortgage broker. She says they cleared somewhere north of $100,000 a year and had no trouble supporting themselves and their two small children — until the housing market crashed. And now?”

“They defaulted on their home loan in January and quickly burned through about $20,000 dollars in savings, so now most expenses are going on credit cards. Her husband is pounding the pavement for a new job while she stays home with the newborn. Elaine: ‘We haven’t had a real estate transaction since December, so we had to take all of our E-Trade accounts, close them out. You know, we had to juggle from paying electricity, gas. It’s a humbling experience to go from making all this money and everything looks great and then all of a sudden just looking out and wondering where and when we’ll have money to buy food.’”

The Birmjngham Business Journal. “The tightened credit market and current housing slump in the Birmingham-Hoover metro area have forced several local mortgage brokers to shutter their businesses. Adam Pullen said since some of the more exotic loan products, such as the 80/20 loans and 100 percent financing, have dried up in the markets, brokers have been left out in the cold.”

“‘What’s happened is brokers have had to rely on lenders. Most of them are banks that have clutched down on lending,’ Pullen said. ‘The industry is shutting down brokers.’”

“The markets will remain crippled without non-conventional loans to offer consumers, Pullen said. ‘Let’s face it – most people need 100 percent financing to buy a home,’ he said.”

The Las Vegas Sun. “Casino and gaming executives from domestic and international companies weighed in on the current economic crisis at this morning’s Global Gaming Conference in Las Vegas. Harrah’s CEO Gary Loveman told attendees the tightening credit market is a much more important challenge in casino growth than the short-term drop in consumer spending. The Harrah’s CEO said casino developers ’spend capital like drunken sailors,’ building lavish facilities while seeing little return on their investment during the downturn.”

The Enterprise Record. “Longtime Chico manufacturer Bruce Norlie knows about painful cutbacks. His company, Norfield Industries, manufactures the equipment to make prehung doors, a staple of the housing industry. Each layoff was hurtful to Norlie, member of a longtime Chico family that values its employees and appreciates their productivity. Lucky for him, his other enterprises, including equipment supplies like saw blades, are still positive.”

“‘When the housing industry was going wild, our business was very strong. We’ve had a substantial number of customers go out of business, predominantly in the U.S., some in Canada,’ he said.”

“Over the years that Norlie has been in the industry, he’s seen other downturns. ‘It’s never been this bad though,’ he noted.”

The Union Tribune. “Matt Sauer, a young, single mortgage broker, planned to get rich quick after graduating from college. By age 28, he owned properties in Pacific Beach, Las Vegas and Florida. Today, the houses are underwater, and Sauer’s dreams of quitting his job to become a Christian missionary are on hold because of his financial obligations.”

“‘Like the Bible says: ‘The borrower is the servant to the lender,’ Sauer said. ‘I am enslaved.’”

The Valley Chronicle. “Though the economic future is uncertain for San Jacinto no less than other local California governments, measures are available to save $380,000 this budget year, City Manager Barry McClellan told the City Council last week and greater savings can be achieved if it becomes necessary. McClellan said he began working on reducing spending - all travel on the city dime must be approved by him personally - in August and department heads have come up with additional ways to save money should the need arrive.”

“It probably will. ‘The days of living fat have come to an end,’ said Mayor Jim Ayres.”

The News Leader. “The odds of landing a part-time job at department store operator Bealls Outlet Stores Inc. this holiday season are slimmer than getting into Harvard: It’s one out of every 45. The chances aren’t any better at 7-Eleven. One California store received more than 100 applicants in a week and a half for jobs that pay $8.50 per hour — and the retailer doesn’t even usually hire holiday workers.”

“‘I thought it was going to be pretty easy, but I am not the only one looking for a job. There are thousands of us going for the same thing,’ said Kimberly Caparo of Chesterfield, Mich., who has applied for part-time jobs at Toys ‘R’ Us Inc., Home Depot Inc. and Lowe’s Cos. Inc. in recent weeks since she and her husband were laid off.”

“In one respect, however, Springfield job applicants appear to fit a nationwide trend — rather than the usual pool of teens or stay-at-home moms looking for extra holiday spending money, those vying for jobs have much deeper résumés. As far back as September, Bealls Outlet Stores — which operates most of its 450 stores in Florida — was being flooded with up to 40 to 50 applicants a week, said Conrad Szymanski, president of the Bradenton, Fla.-based chain. A year ago, they saw one or two applicants a week per store.”

“‘What we are seeing is a profound increase,’ particularly in Florida, California, and Arizona, where the real estate market has been hit hard, said Szymanski.”

“David Ortega, a training store manager at the 7-Eleven in Citrus Heights, Calif., that got more than 100 applications, noted that many applicants have management experience — including those who owned construction businesses. The store in a suburb of Sacramento, which has been hard hit by the housing slump, usually saw candidates who came straight out of high school, he said. One recent applicant — a former manager in cosmetics at Macy’s — even wrote him a thank-you note for discussing the $8.50 per hour job.”

“‘You expect to see that for a higher-level position, like an executive,’ he said.”

“John Morris, who expects to be laid off from his Springfield marketing job at the end of the year, has applied for jobs all over the country.Morris, 41, said the impression he gets is that, although there is a lot of competition, there are a lot of jobs available, as well. ‘The thing that is probably killing the market right now is everyone is waiting for Jan. 1 for the new financial year to start before making any decision.’”

“He’s still optimistic he’ll find another marketing position but recently has been considering taking a job shuttling railroad workers to and from job sites. ‘The stigma there is how do I tell my family I didn’t really need a college degree?’ Morris said.”

“‘Right now I’m still hoping to get a job that is more continuing up the professional ladder,’ he said. ‘But if December comes around and there’s nothing there, then I will swallow my pride and get a commercial driver’s license and lower my expectations — and honestly, probably be happier. There’s not a lot of stress with driving a bus. It gets the bills paid and right now that’s the more important thing.’”

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Readers discussed the holidays and the housing bubble. “Three months ago everyone in my extended family up north was talking about coming down to LA for some warmth and sunshine, disneyland, and broadway show. About two weeks ago their plans all fell apart and now we’ll only have local family at our dinner. Only one brother was willing to admit his cancellation was due to financial duress, but I know that my mother has lost big bucks in her stock accounts and my older brother has said his practice barely cashflows.”

“I predict light traffic at the airports and on the freeways over the holiday season and that warm tourist destinations worldwide will go unvisited by those north of the 40th parallel.”

Another said, “My wife and I were just discussing the downturn and how in the last 12 months months we’ve purchased: a new laptop, a used car, all kinds of baby stuff, furniture, took a cruise.”

“We’re very, very frugal, and this was an aberrant year, so we’re thinking that this is way worse than we imagined. We didn’t buy a house though!”

A reply. “Well, with no home purchase closing costs and that big commission due a mortgage broker you certainly had the dough in your pocket for all the other stuff. And just think about all your friends with mortgage notes who are gonna get their yearly notices for payment of higher property tax escrows for the coming year due to the collapse of commercial assessments.”

“Ho! Ho! Ho! Merry XMAS!”

One had this, “I had two get towed off Interstate 26 going into Columbia because of a car issue. (car is 8 years old). The tow truck driver strikes up a conversation that he was retired for two years but went back to work part time. He indicated he had lost $150,000 in the stock market and was very disappointed. I wanted to cheer him up so I said, ‘Well at least you did not get into real estate.’ He replied that he had bought a condo in Daytona a few years ago.”

“It will be a difficult holiday season for conversation.”

To which one posted, “I’ve been saying ‘Well, as long as you didn’t buy or HELOC real estate in the past five years, you’ll probably be fine.’”

“Trouble is, EVERY person I know (besides myself) has bought or HELOCed in the past five years. Seriously. Maybe I need to meet new people.”

The North County Times. “Barratt American, a large, private builder based in Carlsbad, might soon be forced to file for Chapter 11 bankruptcy protection because of a loss in funding from its lender, said Michael Pattinson, president of the company. So far, 11 Barratt American projects around the region have fallen into foreclosure.”

“Pattinson said much of the fault lies with banks unwilling to lend money despite capital infusions from the federal government. ‘Until the banks do their jobs, the economy is going to deteriorate and everybody is going to have a miserable Christmas,’ he said.”

The Record Searchlight. “Calls to the National Foundation for Credit Counseling’s Locator Line have been setting records with each passing week. What’s more, consumers taking the NFCC’s Mortgage Realty CheckSM, are up 33 percent for the year. ‘Unfortunately, we have people who are beginning their 2008 shopping season who are still paying for 2007,’ said NFCC spokeswoman Gail Cunningham. ‘The minute you make that purchase, the interest starts accruing.’”

The News Herald. “Gov. Charlie Crist has kicked off the holiday season with a proposed gift to distressed homeowners: placing a moratorium on foreclosures through the first of the year. The governor called it an act of ‘compassion.’ But it could just as easily be seen as a vacation from economic reality.”

“If a lender believes an owner can make payments on the property after the first of the year then he is more likely to hold off on foreclosure anyway.”

“That mostly leaves the worst cases, the owners who simply can’t make payments in six weeks or six months. Freezing their foreclosures gives them a break they don’t deserve and prevents the lender from being able to recoup his investment. Also, it threatens to create a logjam of foreclosed homes that will be released all at once when the freeze is lifted, flooding the market at a time when it can’t handle more excess housing inventory.”

The Miami New Times. “Two months ago, Cassy (not her real name) was homeless, out in the rain with her four kids. Now she has a three-bedroom, two-bathroom, sky-blue house on a tree-lined street in Miami’s Buena Vista neighborhood. She takes warm showers, cooks vegan dinners, and watches the news on a small, fuzzy TV screen. The only catch: The house isn’t hers. Cassy is a squatter and, at any moment, could be arrested for trespassing, even burglary.”

“Not everybody in Miami-Dade County is crying over this year’s 40,342 foreclosed properties. Cassy is part of a small, well-executed movement by activists at Take Back the Land to relocate homeless families into empty houses and abandoned government-owned buildings.”

“‘We could virtually empty the streets and shelters simply by filling the vacant houses,’ director Max Rameau says. ‘Homes should go to people, not kept empty so banks can cash in.’”

The East Valley Tribune. “For Darrell Logan, 2008 has been the most difficult year of his life. An unyielding series of financial setbacks have culminated in the Queen Creek homeowner, along with his wife, Donnique, and their four children, falling behind on their mortgage and hoping that their lender, Washington Mutual, will give them a break and not rush them into foreclosure.”

“Things were going well for the Logans when they moved from Compton, Calif., in July 2007 and purchased their Queen Creek home in October 2007. They also owned a home in Compton and chose to rent it after they left. ‘(The tenants) were doing OK with the payments in the second half of 2007, but, starting in January, they just weren’t making payments consistently and then they stopped paying,’ Darrell Logan said. ‘So we basically had to use our savings to make up for the payment. Even when they were making payments, we still had to pay $500 extra to make up what they weren’t paying in rent, so that put us in a bind.’”

“Donnique Logan then lost her job with the school district while pregnant with their fourth child. ‘At the same time, we’re paying lawyers to evict these people out of our house … and they just got out of the house on Nov. 12, but the house then foreclosed on Nov. 12. So it just hasn’t been a good year at all,’ Darrell Logan said.”

“All across the East Valley, distressed homeowners are on the verge of losing their homes, and there are already roughly 40,000 foreclosed homes in Maricopa County.”

The Gazette. “Colorado Springs homeowner and artist T. Benton Brooks isn’t in foreclosure — yet. He’s missed two mortgage payments, but is determined to avoid losing the west-side rancher he’s owned for 18 years. At a time when record numbers of people have fallen into foreclosure in the Colorado Springs area, Brooks believes he’s exactly the type of troubled homeowner that lawmakers, housing advocacy groups and consumer counseling agencies want to help. But after nearly six weeks of phone calls and faxes, Brooks has more questions than answers.”

“Brooks, a California native who moved to the Springs in 1978, admits he’s made poor choices. As a car salesman years ago, he took out cash advances on credit cards during lean months — effectively borrowing money at hefty interest rates. Multiple refinancings to fund home improvements early on, and to pay off credit cards in later years, left him owing $260,000 on a home he estimates is worth $180,000. He filed for bankruptcy in 2007.”

“Afterward, he was allowed to stay in his house as long as he made his combined $2,115 a month in first and second mortgage payments. In past years as a cars salesman, he never sold fewer than 12 cars a month; now, he’s struggling to sell seven or eight. He missed $1,425 payments in August and September on his first mortgage, and a $690 payment on his second mortgage in November.”

“‘I know I’m a culprit,’ said Brooks, who added that his financial troubles are of his own making. ‘But I’m also a victim.’”

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