Here's recent history of the Fed’s policy committee and its Fed Funds rate. Next Fed decision is June 24/25.
June sees worst O.C. construction job loss in 15 years
July 21st, 2008, 12:02 am · 43 Comments · posted by Jon Lansner/O.C. Register columnist
While O.C. construction bosses added 700 workers from May to June, total employment in this sector is off 6,100 people in a year — a 5.8% drop that’s the biggest tumble since 1993. (By the way, from 1990 to 2007, June’s typical one-month construction job surge is 1,600 workers, so even this year’s one-month gain isn’t great news!)
Overall, Orange County’s real estate and related finance businesses lost 17,800 jobs in the year ended last month. Another key to the drop is loss of credit-related jobs in O.C., primarily in making and servicing home loans. This niche’s employment is down 11,300 in a year,
Non-real estate bosses cut 7,200 workers last month, the worst loss since August 2002.
Here’s a look at June’s real estate/finance job stats by key industry slices …
| Job slice | Last mo. | Vs. ‘07 | Vs. ‘07 |
|---|---|---|---|
| Construction | 99,400 | -6,100 | -5.8% |
| • Construct buildings | 23,500 | -1,200 | -4.9% |
| • Heavy construction | 7,900 | -900 | -10.2% |
| • Specialty trades | 68,000 | -4,000 | -5.6% |
| Lending activities | 34,400 | -11,300 | -24.7% |
| • Bank lending | 17,700 | -1,000 | -5.3% |
| • Non-bank lending | 12,300 | -6,800 | -35.6% |
| • Lending support | 4,400 | -3,500 | -44.3% |
| Other finance | 11,100 | -300 | -2.6% |
| Real estate/leasing | 38,000 | -800 | -2.1% |
| • Real estate | 31,600 | -400 | -1.3% |
| • Leasing | 6,400 | -400 | -5.9% |
| Bldg. services | 33,700 | +700 | +2.1% |
| Building supply | 11,700 | -400 | -3.3% |
| Farm | 5,800 | +400 | +7.4% |
| All real-estate related | 234,100 | -17,800 | -7.1% |
| All other O.C. jobs | 1,268,200 | -7,200 | -0.6% |
| All O.C. jobs | 1,502,300 | -25,000 | -1.6% |
Other real estate news …
- McCarthy Building’s Tracy MacDonald sees construction’s rebound “likely slow”
- Are your windows open to the breeze, and burglars?
- 4 of O.C.’s 7 biggest cities lose population
- Football star Carson Palmer lists Laguna home at $2.95 million
- O.C. office construction plummets 91%
- Housing bubble hurt Calif. renters, too
- Gov. Arnold says Calif. will ‘grow out’ of housing ills by ‘09
July 21st, 2008 at 4:28 am
The only thing enlightening or news worthy about this article is that there were still this many construction or real estate/finance jobs left at this point.
July 21st, 2008 at 6:50 am
How come EDD says 1,555,800 for June and you say 1,502,300?
SANTA ANA-ANAHEIM-IRVINE MD 5 1,641,600 1,555,800 85,800 5.2%
July 21st, 2008 at 7:31 am
Take a look at the V.I.P home loan Christopher Dodd got from Countrywide. No wonder he is pushing so hard to pass the housing bailout bill.
July 21st, 2008 at 8:16 am
anyone with a subscription to realtytrac? what’s the house number on the marble sands st. in zip 92660 with NOD? that is an awesome neighborhood.
July 21st, 2008 at 8:27 am
QUE?
Necessito trabajo Bang-Bang? Sweep, Sweep? Wipe, Wipe? Pluck, Pluck?
QUE?
July 21st, 2008 at 8:31 am
only 700?
July 21st, 2008 at 9:20 am
oh 6100 that sounds more like it…
July 21st, 2008 at 9:50 am
HEY WHERES ARE FRIENDLY ALFALFA SPROUTS FOR BRAINS….
MORE GOOD NEWS MORE JOB LOSSES. THIS CANT BE ORANGE COUNTY THAT CANT HAPPEN HERE…
ALFALFA BRAINS IS THIS MORE GOOD NEWS. NO JOBS NO INCOME NO STATED INCOME LOANS SURE CANT HELP RENTING EITHER…..
HMMMMMMMMMMM
I WONDER IF U CLICK UR SHOES TOGETHER THREE TIMES AND SAY
I WISH I HAD A BRAIN
MAYBE U MIGHT GET ONE FROM THE WIZARD OF BLOGGING……….LOLLL
BUT THAN AGAIN I DOUBT IT
SEE ORANGE COUNTY ISNT DIFFERENT THAN OTHER AREAS ITS ACTUALLY WORSE
July 21st, 2008 at 10:11 am
Hwood: just curious…are you truly happy about job losses in your home area? Before you answer, I have to ask: Can you engage in a civil discussion or are we going to be subjected to typical college type antics spewed from your keyboard?
July 21st, 2008 at 10:42 am
As rough as things might get I would rather live here than a lot of other places.
July 21st, 2008 at 11:10 am
omg, did you guys see what mortgage rates did last week? They are back up to 6.42% according to bankrate.com
Just when we thought that the housing market might get some help from lower rates, we are back to 6.42%
July 21st, 2008 at 11:27 am
In case you missed it, yesterday’s Sunday edition of the OC Register had some great articles by our blogger Jon and others. The whole Marketplace Sunday section was packed with articles showing how bad the housing market and the OC economy currently are. Great job Jon!! Thanks so much for warning OC residents about the risks of buying in this declining real estate market.
Here are some of the links.
http://www.ocregister.com/articles/homes-foreclosures-percent-2098460-last-price
http://www.ocregister.com/articles/orange-county-price-2098471-percent-first
http://lansner.freedomblogging.com/2008/07/17/oc-office-construction-plummets-91/
and yes, I do get the paper edition of the OC Register on the weekends. And no, I don’t get paid by the OC Register or Lansner to say good things about them. I just feel they are doing a great job at warning buyers about the dangers of buying in this market. Information is power. I still remember one realtor telling me a few months ago that the only problem with this market is that people are watching the news and reading the paper and they get scared.
Sure, keep people ignorant so you can get your commission!!!
July 21st, 2008 at 11:57 am
Bill Gross Says Fannie Mae, Freddie Mac Mortgages `Excellent’
July 21 (Bloomberg) — Bill Gross, who manages the world’s biggest bond fund, said mortgage-backed bonds issued by government-sponsored entities Fannie Mae and Freddie Mac are “an excellent buy.”
“It’s basically the mortgages where many buyers have stood aside,” including sovereign wealth funds and central banks, said Gross, the managing director of Newport Beach, California- based Pacific Investment Management Co., in a Bloomberg Television interview. “Not only do you have the agency guarantee but you have the mortgage to back you.”
Eight of the top 10 holdings in Gross’s $128.8 billion Total Return Fund were mortgage-backed securities guaranteed by Fannie Mae, according to data compiled by Bloomberg News as of March 31, the latest date for which figures are available. Mortgage securities made up 61 percent of the fund as of June 30, up from 53 percent a year earlier, according to Pimco’s Web site.
Cash equivalents, a category of assets with duration of less than one year, made up the second-largest portion of the fund. Duration reflects the sensitivity of a bond’s price to changes in interest rates.
The Total Return fund has returned 4.7 percent annually over the past five years, beating 84 percent of its peers in the government and corporate bond fund category as of July 18, according to Bloomberg data. Pimco, a unit of Munich-based Allianz SE, has $830 billion of assets under management.
July 21st, 2008 at 11:58 am
Ah, the mortgage to back you. Guess it’s not worth zero.
July 21st, 2008 at 12:20 pm
Thanks provider for “providing” at least some good news in this depressing environment.
Unfortunately, I have no choice but to report even more bad news. Oil is going back up. After coming down for the past 3 sessions, Oil closed up today making consumers fear that the worst is not over yet.
http://www.reuters.com/article/newsOne/idUST14048520080721
Unfortunately, this will mean even more pain for the OC consumer.
July 21st, 2008 at 12:58 pm
Certainly the latest mortgage backed securities from the GSEs are going to be good investments…I would certainly hope so with all the new regulations but what about the rest of the 5 trillion dollars…one can safely assume that all is not well with that bunch.
July 21st, 2008 at 1:11 pm
Very little has changed in the portfolios other than lower purchase prices. Don’t believe everything you see in a blog.
July 21st, 2008 at 1:22 pm
Another day, another $300 decline in home prices.
July 21st, 2008 at 1:24 pm
In April, 1.22 percent of the conventional home loans that Fannie Mae guarantees were past due by at least three months or were in foreclosure. That was up from 1.15 percent in March and about twice the rate recorded in April 2007.
Translation: 98.78% of loans are not seriously delinquent.
July 21st, 2008 at 1:50 pm
Bubble – Do not mean to add rain to your gloom, but assuming 20% down and good credit you can easily lock into a rate of 6.25% today with 0-1 point.
One thing I noted on this blog is that the majority are expert investors. Taking this into consideration, and the fact that for the first 5-years of a mortgage you pay mainly interest, someone could go with a 7/1 ARM with a rate well below 6% (5.5 – 5.8) and invest the fixed to ARM delta using the final 2-years to time a transition to another ARM or move over to fixed (15 or 30). What is especially nice about this strategy is if you have an investment hick-up you have time to correct, and if you see a good windfall you can buy down the ARM principle – lower the interest only payment, and roll more over into your portfolio.
July 21st, 2008 at 1:55 pm
Yeah but wasn’t that what Countrywide was saying right up until the end? Those percentages do seem small but what dollar amount do they come to (1..22% of $5T = $61B?) And doesn’t the trend alarm you? Also, aren’t tons of bad loans in pipeline to be dumped on the GSEs (read tax payer), how will that effect their performance? Also, it has become clear to their investors that the two GSE giants are not so safe after all. They have lost something like 85% of their value and that’s not because of doom and gloom, that’s because the investors know what is coming…larger and larger losses on MBS.
July 21st, 2008 at 1:58 pm
Thought the GSEs only bought new loans?
July 21st, 2008 at 2:02 pm
Active Buyer Says:”What is especially nice about this strategy is if you have an investment hick-up you have time to correct,”
By investment hick-up, do you mean if your brilliant real estate investment goes down another 20% down in the next couple of years?
July 21st, 2008 at 2:07 pm
This is not good news no matter how you slice it - the trend will likely continue.
July 21st, 2008 at 2:11 pm
Good one Bubble!!
I did into go into a lot of detail on the investment side (my likes and dislikes many not be the same as others), but if that is what you took away than all I can say is “never mind”.
July 21st, 2008 at 2:12 pm
After all - who would want to pay for a hard asset with someone elses money - no matter what the price was!
July 21st, 2008 at 2:14 pm
Has the light bulb come on yet Bub?
July 21st, 2008 at 2:22 pm
# Active Buyer Says:”After all - who would want to pay for a hard asset with someone elses money - no matter what the price was!”
Sure, tell that to the guy who bought this house last year and paid $661,126
http://www.redfin.com/CA/Santa-Ana/2922-W-Highland-St-92704/home/3540073
July 21st, 2008 at 2:24 pm
who cares about your credit, right?
good credit is sooooo overrated.
July 21st, 2008 at 2:30 pm
Do you really not get what I am trying to say - or is the problem that it may impact your continuing to collect money spinning doom and gloom?
July 21st, 2008 at 2:31 pm
TO ACTIVE BUYER UR COMMENT
“Bubble – Do not mean to add rain to your gloom, but assuming 20% down and good credit you can easily lock into a rate of 6.25% today with 0-1 point.
(One thing I noted on this blog is that the majority are expert investors)
NOW THIS ONE TAKES THE CAKE SHOW ME THESE SO CALLED EXPERT INVESTORS. THEY CHEER ONLY WHEN LOSSES ARENT AS MUCH AS THEY EXPECTED.. OH PLEASE EXPERT INVESTORS YEAH RIGHT)
LOLLLLLLLLLL
.
July 21st, 2008 at 2:32 pm
“Those percentages do seem small but what dollar amount do they come to (1..22% of $5T = $61B?”
That’s why there is c o l l a t e r a l. And the market losses for FNM have everything to do with the perception that any government help could wipeout shareholders. Those fears have been calmed for now, which explains the steady climb of its stock this past week. It’s up 5.45% today alone.
July 21st, 2008 at 2:36 pm
YEAH ONLY 61 BILLION LOSS
WOW THATS SOMETHING TO CHEER ABOUT…
July 21st, 2008 at 2:39 pm
I WONDER WHERE THE EXPERT INVESTORS OF BEAR STEARNS ARE ANY GUESS
I CANT BELIEVE U GUYS THINK LOSSES ARE OK. EXPERT INVESTORS DONT AND THEY DO NOT CHEER AFTER LOSSES………
I HATE TO SEE THE BAD INVESTORS…..LOLLL
July 21st, 2008 at 2:42 pm
provider Says: “It’s up 5.45% today alone.”
Sure, tell that to the suckers who bought FNM at 9:50AM today and paid $18.48 just to see the price drop into the close to $14.13 Ouch!!! That is a drop of 23%. Brilliant move!!! Maybe you were one of them.
As always, you don’t tell the whole truth.
July 21st, 2008 at 2:43 pm
And……..in addition to having the house as c o l l a t e r a l, the 20% of loans Fannie Mae guarantees, which have original loan amounts over 80%, also carry mortgage insurance. Your $61B is a tad overstated.
July 21st, 2008 at 2:46 pm
PROVIDER
U MAY WANT TO GET A DIFFERENT CHEERLEADING OUTFIT ON
IT DOESNT WORK IN THE REAL WORLD
SO LOSE THE SKIRT U MIGHT GET SOMEONES ATTENTION OR U CAN USE IT AS COLLATERAL…LOLL
July 21st, 2008 at 2:47 pm
Bubble, that’s the first time I’ve ever seen a stock seesaw on a trading day before. Head for the hills! The end is near! The rapture has arrived to carry you home!
July 21st, 2008 at 2:52 pm
my point is that it is not a “steady climb” as you put it. The market is still very nervous about the GSEs and it shows but of course, you would never tell the whole truth about anything.
July 21st, 2008 at 2:53 pm
PROVIDER IT MAY BE THE FIRST TIME U HAVE SEEN ANYTHING WORTHWHILE
PROVIDER UR COMMENT
Bubble, that’s the first time I’ve ever seen a stock seesaw on a trading day before. Head for the hills! The end is near! The rapture has arrived to carry you home!
( YOU SOUND LIKE A GUY WHO BOUGHT A HOUSE WHEN IT WAS 400K SAW IT GO TO 600K AND THAN SAW THE VALUE GO TO 420K AND GO IM UP ON MY INVESTMENT….LOLLL YES U ARE BUT U LEFT ALOT ON THE TABLE CAUSE U R NOT SMART)
CHEERING AGAIN FOR LOSSES TYPICAL NON EXPERT INVESTMENT LOGIC
July 21st, 2008 at 3:39 pm
But wait a minute…isn’t the GSE plan to sell preferred stock to shore up capital and doesn’t that dilute the holdings of the current GSE investors? So what your saying is the GSE stock holders should be glad they are completely worthless, just near worthless right?
Oh and the $61B loss, that had a question mark because no one really knows how much the loss might be…and if someone high up even hinted what the real number might we’d see the DOW plunge another 300 points. It’s all hush, hush so the herd doesn’t panic.
July 21st, 2008 at 6:45 pm
Provider: I enjoyed your explanation of a use case for ARM’s. That works all fine and dandy for someone like myself - which is quite similar to what I’ve done in the past for investment properties - not only did I have more cash left over for other investments but it allowed me to be in the green on cash flow on the properties.
Short term rates were on the decline and the potential for long term rates to go much higher was much less than it is today.
I also had the funds to buy down the loans in entirety if I was no longer making a higher percentage than the interest being paid.
But go have some family try to do the same with just 6 months reserve cash in the bank and higher interest rates looming on the horizon with home values dropping as we write. You have any idea the difference between our risk thresholds? Light years apart.
I know full well the risk I am undertaking and can sleep quite easy at night knowing I have a rock solid back out plan.
Many others, as exemplified by recent events, only learn of the risks after they are in trouble and instead of working at night to make the payments (if they lack equity to refi out of it into a potentially higher rate and lack the income to make the loan - if the loan is available at that time) they opt to whine and beg for handouts.
I totally agree the process is sound. But so many young folks get caught up in the excitement without evaluating all the risks. I only wished those that write about such tactics also point out the downside risks - especially when those downside risks are playing out right before our eyes. What you speak of is what so many thought of and attempted to play EXACTLY THE SAME WAY.
Keep in mind that many probably missed the fact that the fixed to ARM delta actually must be cash in hand that they earn - not a discount on the house payment they can leverage to make it affordable.
But you probably know that there are plenty of folks out there like me who play this game and it works quite well - invest the delta, invest the cash flow and sit on the equity. Too bad that’s not working so well right now for folks in the OC that started their game in 2004 or sooner. And good luck with the cash flow part of it.
However, it’s working quite well in NYC for us right now - the only problem there is that some of the best investments in NYC require 20% min down and fixed loans - I am referring to the co-ops - which have the best return on rent - if you can find one that allows you to rent it out - but it works and works well - just won’t work like I wrote down here in the good ol’ OC for quite some time - the rental equivalents for worthwhile investments are WAY OFF here in the OC. I wouldn’t touch this market with anyone’s money - it’s as good as a loss in the next 5 years when considering future worth of both tied up funds and the home itself. Moreover, buying a primary in such fashion with higher fixed and short term rates looming on the horizon (and we all know it) only means that the buyer has a great appetite for risk - or is just plain stupid - or they really really want to live in a SFR for the short term and hope for the best - yeah right! LOLOL).
Let the whining begin….
July 21st, 2008 at 10:46 pm
The funny thing is the i.e. is the one that seems to be hurting with the loss of these jobs. Most blue collared workers that work on OC building projects are from the I.E….Most of the on the brink mortgage people were from the I.E…..Traffic has decreased substantially from the I.E…..When Orange County starts to shed some jobs the I.E. is the first to feel it.