California Leads U.S. in Defaults, Home-Price Decline

[marmar]

from Bloomberg:



California Leads U.S. in Defaults, Home-Price Decline (Update1)

By Daniel Taub and Dan Levy

March 20 (Bloomberg) -- Sacramento may eliminate up to 600 jobs in the city's first staff reductions in half a century, and the police and fire departments in the California capital may have their budgets cut by 20 percent. The culprit is the collapse of the U.S. housing market.

California, the birthplace of the subprime mortgage industry, is paying the highest price of any state as the housing meltdown persists. Its gross domestic product will drop 1.5 percent in the first half of 2008, the most in the U.S., analysts at Lexington, Massachusetts-based Global Insight Inc. estimate.

The state had the most foreclosure filings in the U.S. last year and the biggest fourth-quarter decline in prices, according to RealtyTrac Inc., an Irvine, California-based seller of data on defaults, and the Office of Federal Housing Enterprise Oversight in Washington.

``The depth and magnitude of what's happening in the real estate market is really, really grim,'' said Russell Fehr, Sacramento's finance director, in an interview.

California, the most populous U.S. state and accounting for almost one-seventh of gross domestic product, will lose $25 billion in personal income by the end of 2008 and property values will fall by $630.7 billion, according to forecasts from economist Jerry Nickelsburg at the University of California, Los Angeles, and the U.S. Conference of Mayors.

Economic `Drag'

``The housing slump is the real drag on the economy,'' Nickelsburg said.

Almost half of the 25 biggest U.S. subprime lenders were based in the state, according to industry newsletter Inside Mortgage Finance, and almost a quarter of the country's outstanding subprime loans were issued there, more than in any state, data from San Francisco-based research firm LoanPerformance show. Such loans are made to borrowers with limited or tainted credit histories. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=a_IN0W3.lFV0&refer=home

[mitchtv]

1. Maybe someday

I can afford to move closer in.

[Adsos Letter]

2. They are also laying off thousands of teachers...

and capping enrollments at state universities starting in the Fall.

[shanti]

5. bad news

for new teachers. my oldest is graduating in may with a degree in education.

[Adsos Letter]

6. She has my symapathy...

I will be graduating next year with a Graduate Degree in History w/Math minor...I just retired from another career at 52, but wanted to do some teaching...maybe things will pick up in a couple of years...California HAS to have teachers; look at our population level!

If it is not too much prying...where did your daughter attend college? I am at Sonoma State.

[shanti]

7. actually

it's my oldest son (of 4). no daughters:(...he's graduating from cal state fullerton with a history degree. he's told me that this degree is impacted, so it will be tough to get a job as a history teacher anyway. but this is orange county, so maybe he can get picked up by a private school. he and my DIL are also talking about moving to oregon or arizona because of this too.

at least he'll have a DEGREE, better than nothing, i say! it's taken him almost 10 years of part time school to make it this far and i'm very proud of him!

[Adsos Letter]

8. The study of history is badly undervalued in our society...

...and we pay the price for it in lack of citizen activism and political interest. I chose to major in History and minor in math, hoping the math minor would get me in the door where I could also teach some history or poli-sci classes.

Best of luck to your son! :hi:

[shanti]

9. that is so true

congratulations on getting your degree! :hi:

[riverdeep]

3. For every action, there is a reaction.

When modest two bdr houses are going for over million in the valley, something has to give.

[Matariki]

4. What a surprise. Considering they also led the home price to income ratio gaping divide...