Had the opportunity over the past week to spend some time catching up with local business leaders, first at a charity golf tournament and later at a couple of fund raisers. If there is one common theme it is this: nobody sees an end to this recession and everyone is preparing for a long, hot Bakersfield summer in a sick economy. Trust me, I'm trying to look for silver linings and signs of an uptick, but I just can't find them. Among some of the disturbing indicators:
* MORE FORECLOSURES: California and Florida led the country in home foreclosures in the first quarter. California had 13 cities among the top 25 with the highest foreclosure rates, including Bakersfield holding down the No. 7 position. (for the full story read it here). Others on the foreclosure hall of shame list include Merced, Stockton, Riverside-Ontario, Modesto and Vallejo-Fairfield.
* MORE JOBLESS: Our local unemployment rate is an astonishing 14-plus percent and it may get worse, according to RealtyTrac, a seller of default data.
* STUDENT LOANS: Defaults on student loans are also skyrocketing across the country. According to the Wall Street Journal, a combination of a weak job market for graduates, higher tuition costs and parents losing their jobs is leading to a sharp spike in defaults.
* BANKING MESS: It's clear that there will be no recovery until credit eases and the banking industry gets healthy. So it didn't help when the Bank of America reported a $4.25 billion profit but the stock slid because the bank reported a 46 percent increase in non-performing loans. Even a stalwart locally-owned bank like San Joaquin Bank is under the microscope to clean up questionable loans on its books.
* WHO'S BUYING CARS?: Our local car dealers continue to struggle, even with some new fuel efficient and reliable lines on their lots. One problem: even people with good credit are having trouble getting loans while others who have the money are hunkering down and hording cash.
* NON-PROFIT CRUNCH: I won't name them here, but non-profits and foundations across Bakersfield have been slammed by a downturn in donations and charitable giving. They too are cutting back on expenses and staffing.
Enough said. I'll share some good news when I get it!
4 comments:
Can't you think of anything good to say? I read your blog but I don't want to be depressed every time I come here. Not EVERYBODY is out of work.
Richard, Here is some BETTER THAN USUAL real estate news! Buyers ARE responding to these record low interest rates! According to our MLS as of last Friday, there were only 2,020 single family home listings on the market. Last April we had 4,110 listings. There have been 2,621 solds year to date!!!! Look at our absorption rate:
(Take the # solds, divide by the number of months (4);averages about 655 houses a month. Then take the current listing count (2020): divide by 655, you get 3 months of supply). So if not one more home came on the market, we would only have enough inventory for 3 months. The typical dividing line between a buyer's market and a seller's market is 6 months. Don't get TOO excited, as we are dealing with foreclosure comparable sales, and appraisers have their hands tied. It's a long road ahead, no doubt, but definitely encouraging to us realtors.
Good Day to the Bakersfield Observed! Yes, I must say I concur with Mary. As a Realtor myself, I have been engaged with more buyers than in previous months. Confidence is up and the frenzie this past month has been furious because of supply and demand.
Thanks to Debbie and Mary ... love the silver lining hidden amid all the negatives about foreclosures etc... thanks for posting
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