Archive for February, 2008
February 29th, 2008, 1:03 pm by Jon Lansner
State job counters released their revised job stats, and the new math finds extra agony in O.C.’s real estate and finance businesses. By your blogger’s analysis of this new count, local bosses in real estate/finance work have cut a total 26,000 workers, or 10%, from the O.C. property-related industries since employment in these niches peaked in September 2006. The true pain is likely greater as many real estate/finance workers are self-employed or contractors who aren’t in the state’s tally.
Looking at the revised stats on an annual average basis, the new figures found 5,500 more real estate/finance job losses vs. old data. That means 2007, on average, had 10,000 fewer O.C. real estate/finance workers than ‘06, a 4% drop. As of January ‘08, real estate/finance employment (234,600) was at a three-year low. (CLICK HERE to read how the same new job count found a hard year-end slide in overall O.C. employment.)
Key contributors to the real estate/finance jobs recession are no surprise. Lenders, primarily mortgage makers, have been ravaged as their O.C. employment is off 17,500 job, or 32%, from its peak in December 2005. Construction work is down 11,700 jobs, or 10.6%, from its peak in September 2006.
Here’s a look at key slice of the O.C. real estate/finance world in terms of January employment and how far off that job count is vs. each item’s individual, recent peak in each niche …
| Job slice |
Last mo. |
Vs. Peak |
Vs. Peak |
| Construction |
98,700 |
-11,700 |
-10.6% |
| • Construct buildings |
23,300 |
-1,800 |
-7.2% |
| • Heavy construction |
8,100 |
-1,100 |
-12.0% |
| • Specialty trades |
67,300 |
-8,900 |
-11.7% |
| Lending activities |
37,600 |
-17,500 |
-31.8% |
| • Bank lending |
18,500 |
-500 |
-2.6% |
| • Non-bank lending |
14,100 |
-10,400 |
-42.4% |
| • Lending support |
5,000 |
-8,700 |
-63.5% |
| Other finance |
10,800 |
-1,700 |
-13.6% |
| Real estate/leasing |
38,400 |
-1,200 |
-3.0% |
| • Real estate |
31,900 |
-1,000 |
-3.0% |
| • Leasing |
6,500 |
-2,000 |
-23.5% |
| Bldg. services |
32,600 |
-800 |
-2.4% |
| Building supply |
11,400 |
-1,300 |
-10.2% |
| Farm |
5,100 |
-5,300 |
-51.0% |
| All real-estate related |
234,600 |
-26,400 |
-10.1% |
| All other O.C. jobs |
1,262,700 |
-25,700 |
-2.0% |
| All O.C. jobs |
1,497,300 |
-46,500 |
-3.0% |
Posted in: Real estate jobs | 44 Comments »
February 29th, 2008, 12:01 am by Jon Lansner
DataQuick’s freshest stats show this will certainly be the 29th straight month where buyers bought fewer O.C. homes than the year-ago period as mid-February O.C. home sales were off 49% from a year ago. If that pace for the 22 business days ended Feb. 13 holds for the full month, this month will mark the steepest year-over-year sales drop in DataQuick’s books that date to 1988. Pricing, off 14% from a year ago, runs at early 2004 levels. (See how six other indexes value O.C. homes HERE!) Here’s a look at the new stats by key slice …
| Slice |
Price |
Vs. ‘07 |
Sales |
Vs. ‘07 |
| House |
$575,000 |
-14.2% |
770 |
-47.8% |
| Condo |
$365,500 |
-18.8% |
313 |
-43.3% |
| New* |
$562,000 |
+1.9% |
142 |
-62.7% |
| All |
$524,500 |
-14.0% |
1,225 |
-49.1% |
* Includes single-family homes, condos and recently converted apartments
PS: DataQuick’s stats track closed deals. Shoppers entered new deals at the fastest rate in six months, according to Aliso Viejo broker Steven Thomas. To read more, CLICK HERE!
Posted in: DataQuick reports | 209 Comments »
February 29th, 2008, 12:00 am by Jon Lansner
 Fed czar Ben Bernanke told Congress this week: “Consumer spending continued to increase at a solid pace through much of the second half of 2007, despite the problems in the housing market, but it appears to have slowed significantly toward the end of the year. The jump in the price of imported energy, which eroded real incomes and wages, likely contributed to the slowdown in spending, as did the declines in household wealth associated with the weakness in house prices and equity prices.” (Read more of Ben’s testimony HERE!) We wondered how falling O.C. home values were changing the local consumer psyche, if at all.
Will falling home values cut your household's spending habits?
Posted in: Polls | 10 Comments »
February 28th, 2008, 6:01 pm by Jeff Collins
 Chief Executive Stephen Scarborough told investors today that despite “one of the worst” housing markets in many years, a leaner Standard Pacific Homes ended 2007 with enough cash to pay off its bonds and reduce its debts. But a rough market continues to plague homebuilders like his Irvine-based company, he lamented.
“We’re facing a problem in consumer confidence,” Scarborough said during a 30-minute talk at the Wachovia Homebuilding & Building Products Conference in Las Vegas (Listen to Webcast HERE! ). “It’s challenging to get (buyers) to step up to the plate. … (We’ve seen) some encouragement the last couple of weeks, but not notable.”
Read the rest of this entry »
Posted in: Brokers, builders, etc. | 9 Comments »
February 28th, 2008, 2:18 pm by Jon Lansner
 Foreclosure sale’s set for March 19 for the 2,500-acre, Neverland spread near Santa Barbara owned by pop star Michael Jackson. Reportedly he’s late on a $24 million loan from Fortress Music. Your blogger offers up some highlights to date of what could prove to be the most-covered foreclosure in American history ….
• Court documents obtained by Fox News suggests that the auction will include: “All trees, shrubs and plants, sculptures, statuary and other outdoor artistic creations and displays … all railroad equipment, trains, locomotives, rail cars and other rolling stock … all Ferris wheels, carousels, merry-go-round type devices, indoor and outdoor gymnasium and athletic equipment.”
• “Michael Jackson’s ranch is not going to be auctioned off at the courthouse,” a source told CNN. “The financing is all being worked out. There are plenty of lenders willing to work with him. The real estate market is very bad right now and Jackson is being affected just like many other Americans.”
• Says Fox News … “According to experts, Jackson could be very much on the hook with the Internal Revenue Service for around $5 million in capital gains taxes. In other words: His home would be gone, but he’d still be significantly in debt. The reason for this is: Jackson bought Neverland for between $12 million and $14 million back in 1988. If it sells for the full amount owed, $24.5 million, there’s a conceivable difference of $10 million.”
• According to the Santa Barbara News-Press: “Liens, which amounted to nearly $610,000 when the Franchise Tax Board filed the documents on Sept. 4, 2007, have been paid, according to two releases of liens filed with the Santa Barbara County Recorder’s Office. Another debt recently paid by Mr. Jackson is that owed to Real Time Staffing Services and Select Personnel, according to an acknowledgment of satisfaction of judgment filed with the Santa Barbara County Clerk/Recorder’s office on Jan. 23.”
• E! News says … “Jackson’s people have not yet commented on this latest turn of events. His rep issued a statement in November denying he had defaulted on a massive home loan and was in danger of losing his extravagant abode. The erstwhile King of Pop has been living mainly in Las Vegas since returning to the United States a little more than a year ago, following extended stays in Bahrain and Europe.”
And the New York Times wrote this: “More than 233,000 properties were foreclosed in the U.S. in January, according to some stats just released this week. Well, Michael Jackson could be one of the thousands of foreclosures in March (Does Michael Jackson still count as a celebrity?)” Sadly, they badly misread RealtyTrac’s stats that counted 223,001 foreclosure filings — that includes default notices, auction sales notices and bank repossessions — during the month. There were only 45,327 homes lost to foreclosure in January. To read my thoughts on RealtyTrac’s math, CLICK HERE
Posted in: Distressed properties | 13 Comments »
February 28th, 2008, 10:00 am by Jeff Collins
Attendees at a real estate summit in Newport Beach said Wednesday that the slowdown in housing will impact commercial real estate. The only question is how much. Asked if commercial real estate will be the next bubble, some at the Buchanan Street Partners ‘ seventh annual summit said “No,” but there’s definitely a slowdown in sales due to the tightening of credit. Others said there’s no doubt that there’s a bubble that’s about to burst. Here’s a sampling of their comments:
 Robert Brunswick, Buchanan Street’s founder, president and CEO (pictured right): “I don’t think it will be a bubble. It will have some distress based on dislocation of capital markets. Commercial real estate can’t help but be affected.” He added that unlike past slumps, there’s no overbuilding in the commercial sector, and sellers aren’t distressed, so they don’t have to sell their properties.
Russell Minnick of Bridge Investment Group, Salt Lake City: “I would say that commercial is struggling as it is. It’s very difficult to get (investors) to invest in any real estate right now because of uncertainties in the market. … There’s lots of money out there. Everyone’s just holding onto it to see what happens.” Minnick said commercial real estate is not in a bubble, “I think we’re just in a slowdown.”
Fouy L. Ly, senior vice president of Sperry Van Ness, Irvine: “Yes,” he said when asked if commercial real estate is the next bubble. “It’s going to be a big bubble. It’s just a matter of time. It’s just a matter of when. … If income is down, people can’t spend. If spending is down, commercial real estate will be affected.”
Rand Sperry, CEO asset management division of Sperry Van Ness, Irvine: “We’re beyond a bubble. That would have been a good question six months ago. We’re sliding down. The question is, is it going to be a soft landing or a hard landing? … (The answer) seems to change every day. What will happen in the wake of the subprime debacle will tell the tale.”
Posted in: Commercial property | 15 Comments »
February 28th, 2008, 12:00 am by Jeff Collins
(UPDATE: Adds paragraph and links about statewide building permits.)
A research group that tracks California building permits reports that Orange County residential permits last month fell to the lowest level for a January in at least 20 years. Non-residential construction permits fell, too, but was closer to the past decade’s average. The numbers reflect a continuation of a building slump that took hold in 2007. (To read more, CLICK HERE, HERE and HERE!)
Local governments issued permits for 118 housing units in January, lower than any other January since at least 1988, figures from the Burbank-based Construction Industry Research Board show. That’s lower than the previous 20-year low of 129 in 1991. It broke down as:
• 100 for single-family homes and side-by-side condos, second-lowest to 1991, when just 72 permits were issued.
• 18 units of apartments and multi-story condo projects, second-lowest to 1997, when 17 such permits were issued.
Last month’s estimated dollar value of non-residential construction permits was roughly half January 2007. Permits valued at $127 million were issued last month for commercial, industrial and other non-residential building projects, slightly below the 10-year average of $132 million. Commercial permits fell 73% on a year-over-year basis to $42 million, while industrial permits increased nearly fivefold to $5.2 million.
Statewide, the number of residential building permits fell 53.2% in January from the year before, dropping to 4,700 units - 2,600 of them single-family homes and 2,100 multi-family units, the California Building Industry Association reported today. To see the CBIA press release, CLICK HERE! To see permit data by metro area, CLICK HERE!
Read the rest of this entry »
Posted in: Brokers, builders, etc. | 69 Comments »
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