For those who still check this blog I have decided to join the crew over at irvinehousingblog and I will be posting there periodically. As a standard the comments section on this post has some great history.
The comments section of this first post are the headlines of a search of the Register's archives for "housing market" for years 1987 through 1993.
Thursday, December 2, 2010
Monday, February 12, 2007
Mmmm this sounds familar
The beginning of 1990 pictured a fairly optimistic picture of what to expect of the OC economy. Same spin different year. Key phrases: "tighter credit" "1989 was an extraordinary year" "a pause is normal" "the state's economy remains strong". Is it just me or do you feel like we are having a dejavu?
First American
Title Insurance Co.
Chairman D.P. Kennedy said, "we expect some problems in the Orange County real estate markets due to excesses -- overbuilding, overpricing etc. We believe and hope values will return to normal before year end. Expect interest rates to fall slightly." The Santa Ana firm will "continue (an) aggressive sales program but reduce costs in other areas."
The Irvine Co.
"In the short term, Orange County will be influenced by the overall gentle slowing or moderation in the national economy. This will be reflected by slowing job creation," says John Galvin, vice chairman of the Irvine Co. "In terms of the real estate development industry, our cost of doing business will continue on an upward trend. Rising fees, legislative mandates and demands for land and privately funded public infrastructure are adding significant costs at a time of market softness." He also noted of special concern to the industry is the restructuring of the savings and loan industry, and tighter credit availability. "Due to the escalating costs of development, and the increasing local resistance to new community development, we project revenues to go down in 1990."
Koll Co.
For 1990, the Koll Co. expects "to engage in fewer but larger and more selective opportunities in the acquisition and development of commercial properties," according to Joyce Zimmer, communications director of the Irvine company. "We will generally maintain the same level of employment, seeking specialists in specific fields of endeavor, and continuing to stress efficiency of operations."
The Lusk Co.
"Our markets for housing should be slower in 1990 than 1989. This is not a negative because 1989 was an extraordinary year. A pause is normal after extraordinary growth and is the result of normal market factors," says Carl B. Quinn, vice president/chief financial officer. "We have no intent to cut staff at the current time. Our business moves through long cycles and we need to plan in 1990 in order to determine our product in 1992 and beyond."
J.M. Peters Co.
The Newport Beach-based homebuilder believes "interest rates have stabilized and could go lower in 1990. California real estate (new homes/resale) needs a period of 6-12 months to adjust from rapid price increases in both land and home prices," according to spokesman Brian Theriot. The state's "economy is strong and will provide a solid foundation to enter this decade with renewed optimism." He says the company will "continue to market homes in a competitive environment -- maintain a hands-on management philosophy geared toward rewarding employees for continued solid performances. Always look to keep a tight budget and will continue to monitor costs. Growth will be dictated by the market/demand."
First American
Title Insurance Co.
Chairman D.P. Kennedy said, "we expect some problems in the Orange County real estate markets due to excesses -- overbuilding, overpricing etc. We believe and hope values will return to normal before year end. Expect interest rates to fall slightly." The Santa Ana firm will "continue (an) aggressive sales program but reduce costs in other areas."
The Irvine Co.
"In the short term, Orange County will be influenced by the overall gentle slowing or moderation in the national economy. This will be reflected by slowing job creation," says John Galvin, vice chairman of the Irvine Co. "In terms of the real estate development industry, our cost of doing business will continue on an upward trend. Rising fees, legislative mandates and demands for land and privately funded public infrastructure are adding significant costs at a time of market softness." He also noted of special concern to the industry is the restructuring of the savings and loan industry, and tighter credit availability. "Due to the escalating costs of development, and the increasing local resistance to new community development, we project revenues to go down in 1990."
Koll Co.
For 1990, the Koll Co. expects "to engage in fewer but larger and more selective opportunities in the acquisition and development of commercial properties," according to Joyce Zimmer, communications director of the Irvine company. "We will generally maintain the same level of employment, seeking specialists in specific fields of endeavor, and continuing to stress efficiency of operations."
The Lusk Co.
"Our markets for housing should be slower in 1990 than 1989. This is not a negative because 1989 was an extraordinary year. A pause is normal after extraordinary growth and is the result of normal market factors," says Carl B. Quinn, vice president/chief financial officer. "We have no intent to cut staff at the current time. Our business moves through long cycles and we need to plan in 1990 in order to determine our product in 1992 and beyond."
J.M. Peters Co.
The Newport Beach-based homebuilder believes "interest rates have stabilized and could go lower in 1990. California real estate (new homes/resale) needs a period of 6-12 months to adjust from rapid price increases in both land and home prices," according to spokesman Brian Theriot. The state's "economy is strong and will provide a solid foundation to enter this decade with renewed optimism." He says the company will "continue to market homes in a competitive environment -- maintain a hands-on management philosophy geared toward rewarding employees for continued solid performances. Always look to keep a tight budget and will continue to monitor costs. Growth will be dictated by the market/demand."
California Foreclosure Numbers
Realtytrac came out with the foreclosure numbers for California today and I thought it would be nice to see the year over year percentages.
Total 54%
NOD's 42%
REO's 236%
1/06 REO's were just 3.5% of the number of NOD's filed where as 1/07 was 10% which is an increase of 185%.
Now we just need to see the OC numbers.
Coming soon a comparison of the homebuilders who went BK in the 90's to the builders today that are on thin ice!
Total 54%
NOD's 42%
REO's 236%
1/06 REO's were just 3.5% of the number of NOD's filed where as 1/07 was 10% which is an increase of 185%.
Now we just need to see the OC numbers.
Coming soon a comparison of the homebuilders who went BK in the 90's to the builders today that are on thin ice!
Sunday, January 28, 2007
More OC RE job numbers
I posted this on Lansner's blog but with the pigs and bears fighting I think it might have been overlooked. Also the link is for an article from the Register on the mortgage jobs situation in OC and how it feels like a "recession" in the industry.
Ok here are some stats on RE jobs in OC. I took the same categories from the www.bls.gov that Jon uses. The only category I don't like is the building services because it has seen consistent growth with few down years but I kept it none the less. All numbers are subject to error by + or - 1% and to be honest I could have messed up the math. So take it for what it is worth.
Currently RE accounts for 16.5%.
Historical average from 1990 to 2006 is 13.2%
Using January 1996 as guide to a historical low is 11.7%.
Construction jobs had historical lows in 1993 while all other RE was still ok. RE jobs saw lows in 1996 while construction jobs had picked up. So I chose 1996 because RE was the lowest.
Now if you take the historical average of 13.2% and these people who have lost their jobs do not find a new line of work our unemployment rate will be 6.3%.
There are many factors that would make that number off as it is just raw number and they will most likely find other jobs. As long as job growth continues in other sectors then it won't be that bad. But if job growth slows in other sectors all bets are off and it will get ugly.
Ok here are some stats on RE jobs in OC. I took the same categories from the www.bls.gov that Jon uses. The only category I don't like is the building services because it has seen consistent growth with few down years but I kept it none the less. All numbers are subject to error by + or - 1% and to be honest I could have messed up the math. So take it for what it is worth.
Currently RE accounts for 16.5%.
Historical average from 1990 to 2006 is 13.2%
Using January 1996 as guide to a historical low is 11.7%.
Construction jobs had historical lows in 1993 while all other RE was still ok. RE jobs saw lows in 1996 while construction jobs had picked up. So I chose 1996 because RE was the lowest.
Now if you take the historical average of 13.2% and these people who have lost their jobs do not find a new line of work our unemployment rate will be 6.3%.
There are many factors that would make that number off as it is just raw number and they will most likely find other jobs. As long as job growth continues in other sectors then it won't be that bad. But if job growth slows in other sectors all bets are off and it will get ugly.
Wednesday, January 24, 2007
It's about the jobs!
Today the Register reports that Lennar is telling the sub-contractors that they need to reduce their prices by 5% or more or face being banned from bidding for 6 months.
"As our customers continue to pay us a lower price for our homes, we must in turn pay you a lower price for your services," said a letter circulated to subcontractors in Lennar's Orange Coast, Corona, Temecula and Palm Springs divisions.
What does this mean for the local economy? Well the sub's will have less profit and less profit means less spending and less spending means slower growth and slower growth means less jobs etc, etc. This trickles down slowly and we will see more and more of the effects.
BOSTON (MarketWatch) Centex Corporation, Chief Executive Tim Eller during the company's quarterly earnings call Wednesday said the home builder's headcount is down 17% since the beginning of its fiscal year. "There will be more reductions in the [fiscal] fourth quarter," the CEO said. "We're taking the necessary steps to get our balance sheet and our organization to their fighting weight," he added. (Their fiscal fourth quarter ends in March)
A reduction of 17% and more layoffs in the fourth quarter to come mean that a lot of people will be looking for jobs. Where are they going to go? It is not if the other homebuilders are in hiring mode. The talented people will find new jobs but the people who know nothing other than homebuiding will have a tough time finding a new job.
Here is some history to add:
William Lyon cuts 21% of work force June 24, 1992
Byline: Andre Mouchard
The Orange County Register
The William Lyon Co., Orange County's biggest homebuilder, has trimmed 73 jobs, or 21 percent of its work force, citing the long-term real-estate downturn and dim prospects for a quick turnaround.
"We're not building and selling as many homes as we used to. And, with fewer homes under construction, we're needing fewer people," said Lyon Co. spokesman Rick Sherman. "It's a very sad day."
"As our customers continue to pay us a lower price for our homes, we must in turn pay you a lower price for your services," said a letter circulated to subcontractors in Lennar's Orange Coast, Corona, Temecula and Palm Springs divisions.
What does this mean for the local economy? Well the sub's will have less profit and less profit means less spending and less spending means slower growth and slower growth means less jobs etc, etc. This trickles down slowly and we will see more and more of the effects.
BOSTON (MarketWatch) Centex Corporation, Chief Executive Tim Eller during the company's quarterly earnings call Wednesday said the home builder's headcount is down 17% since the beginning of its fiscal year. "There will be more reductions in the [fiscal] fourth quarter," the CEO said. "We're taking the necessary steps to get our balance sheet and our organization to their fighting weight," he added. (Their fiscal fourth quarter ends in March)
A reduction of 17% and more layoffs in the fourth quarter to come mean that a lot of people will be looking for jobs. Where are they going to go? It is not if the other homebuilders are in hiring mode. The talented people will find new jobs but the people who know nothing other than homebuiding will have a tough time finding a new job.
Here is some history to add:
William Lyon cuts 21% of work force June 24, 1992
Byline: Andre Mouchard
The Orange County Register
The William Lyon Co., Orange County's biggest homebuilder, has trimmed 73 jobs, or 21 percent of its work force, citing the long-term real-estate downturn and dim prospects for a quick turnaround.
"We're not building and selling as many homes as we used to. And, with fewer homes under construction, we're needing fewer people," said Lyon Co. spokesman Rick Sherman. "It's a very sad day."
Tuesday, January 23, 2007
Foreclosure comparison
According to the Register's article there were 647 homes that went through foreclosure and that is quadruple from last year. That is scary as foreclosures only tripled from 88-91. The only thing is according to the articles below there was 1396 total in 1991 and through half the year in 92 there was 1264. If we are some where near 647 by July then we know what is to come. The article today also says we are approaching levels not seen since 92. More like 90 but if it keeps going like this we should be there soon.
Foreclosures soar, home-loan terms ease Combination spells danger for lenders July 24, 1992
Byline: Ronald Campbell
The Orange County RegisterThe Orange County Register
Foreclosures nearly tripled in Southern California from 1988 to 1991, according to a new study.
Despite growing risks, however, mortgage lenders are requiring smaller down payments from homebuyers, TRW Redi Property Data reported Thursday. The combination of easy terms and common foreclosures could haunt lenders if the recession deepens. "I don't think the worst is over yet," TRW market analyst Nima Nattagh said.
Foreclosure rate could double in OC this year August 21, 1992
Byline: Rob Perez;Andre Mouchard
The Orange County RegisterThe Orange County Register
Foreclosures could more than double in Orange County this year. And communities with the highest number of troubled properties also are those with the highest mortgage debt, according to a recent study by TRW/REDI Property Data in Riverside.
During the first half of this year, there were 1,264
foreclosures in Orange County. By comparison, there were 1,396 foreclosures in the county during all of 1991.
Foreclosures soar, home-loan terms ease Combination spells danger for lenders July 24, 1992
Byline: Ronald Campbell
The Orange County RegisterThe Orange County Register
Foreclosures nearly tripled in Southern California from 1988 to 1991, according to a new study.
Despite growing risks, however, mortgage lenders are requiring smaller down payments from homebuyers, TRW Redi Property Data reported Thursday. The combination of easy terms and common foreclosures could haunt lenders if the recession deepens. "I don't think the worst is over yet," TRW market analyst Nima Nattagh said.
Foreclosure rate could double in OC this year August 21, 1992
Byline: Rob Perez;Andre Mouchard
The Orange County RegisterThe Orange County Register
Foreclosures could more than double in Orange County this year. And communities with the highest number of troubled properties also are those with the highest mortgage debt, according to a recent study by TRW/REDI Property Data in Riverside.
During the first half of this year, there were 1,264
foreclosures in Orange County. By comparison, there were 1,396 foreclosures in the county during all of 1991.
Monday, January 22, 2007
Real estate job growth flat
Today Lansner's blog reported the job growth numbers of OC and of course RE related jobs are flat. One of the reasons why I started this blog is that some of my posts never made it to Lansner's blog. So this is what I tried to post there today in case it doesn't show up. Not word for word but close.
Let's see if my math is straight. If 1,528,200 jobs equals an unemployment rate of 3.2% then that means there are 49,502 people unemployed and that totals 1,577,702 people who have jobs or want jobs. Now if RE related jobs account for 16.5% or 252,153 of the jobs and since sales are down about 30% that could mean 30% less 76,646 RE jobs. Then the unemployment rate would be 9.2%? This is econ 101 so I could be still learning here but it is pretty basic math. Even if the drop isn't that drastic if sales are down 30% we don't as many people in the business. Even if they find other careers or move from OC this will have an impact on income, taxes and retail etc.
Let's see if my math is straight. If 1,528,200 jobs equals an unemployment rate of 3.2% then that means there are 49,502 people unemployed and that totals 1,577,702 people who have jobs or want jobs. Now if RE related jobs account for 16.5% or 252,153 of the jobs and since sales are down about 30% that could mean 30% less 76,646 RE jobs. Then the unemployment rate would be 9.2%? This is econ 101 so I could be still learning here but it is pretty basic math. Even if the drop isn't that drastic if sales are down 30% we don't as many people in the business. Even if they find other careers or move from OC this will have an impact on income, taxes and retail etc.
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