Jobless rate up on housing cuts

San Diego is one of the most desirable spots in the world to live, so many can't believe why anyone would want to move out of the area or why others aren't flocking to the area. One of the main reasons is that it is too expensive and many are losing their jobs in key industries like real estate. The article below describes how declining home prices are leading to massive lay-offs all throughout the real estate industry. The real question that everyone is bracing for is how much will the declining real estate market effect the rest of San Diego.

County unemployment hits a six-month high

By Dean Calbreath
UNION-TRIBUNE STAFF WRITER

March 3, 2007

Construction and real estate layoffs helped push San Diego County's unemployment rate to its highest point since last July, according to data released yesterday by the California Employment Development Department.

The county lost 23,400 jobs from December to January, but most of the losses were caused by seasonal reductions at retail shops and restaurants related to the end of the holiday shopping season.

More significant were the cuts in the real estate industry, continuing a five-month decline. January's job cutbacks included 2,500 construction workers, 700 real estate workers and 1,100 workers at furniture and home-improvement stores.

“The housing sector is really starting to have an impact on our overall year-to-year job numbers,” said Alan Gin, economist at the University of San Diego.

Gin worried that the real estate downturn is affecting the retail market. From January 2005 to January 2006, 2,500 retail workers lost their jobs, mostly in department stores.

“When you've got fewer people working in construction and fewer people buying homes, you've got fewer people shopping in the community, and that can translate to fewer retail jobs,” Gin said.

The report showed that only 13,000 jobs were created between January 2006 and January 2007, which is low for a county this size.

“Not too long ago, we were adding about 20,000 jobs per year, and there have been times in the past when we've added as many as 50,000,” said Kelly Cunningham, an economist with the San Diego Institute for Policy Research.

The county's unemployment rate rose to 4.3 percent, compared with 3.7 percent in December, which typically has a low unemployment rate. While the jobless rate is still low by historical standards, it is slightly higher than the January 2006 rate of 4.1 percent.

In comparison, the state unemployment rate – adjusted for seasonal fluctuations – was 4.8 percent in December and January, down from 5.1 percent in January 2006.

Statewide, employers cut payrolls by 4,500 jobs from December to January, mostly due to losses in the leisure and hospitality industry, the Employment Development Department reported.

During the year ended in January, California employers added 251,400 jobs, a 1.7 percent increase, compared to a 1 percent increase in San Diego County. Statewide, construction firms added 4,900 jobs during the year. Part of that growth came from non-residential construction and part was because the housing sector grew strongly during the first half of the year.

Since the housing market peaked in August, the state has lost 9,100 residential construction jobs and 39,500 specialty trade construction contractors, as well as 3,800 real estate jobs.

Howard Roth, chief economist for the California Department of Finance, predicted that the housing market will continue to decline in the state through at least June. He said the slowdown is having an impact on the state's income tax revenue.

In January, the state took in about $8 billion in income taxes – $1 billion less than previously forecast. Roth said that part of the drop was due to declines in the money earned by real estate brokers and professionals in related industries.

“The slowdown in the California and national housing sectors is not yet over,” Roth told a meeting of San Diego's Chartered Financial Analysts on Thursday. “And it has turned out to be worse than was expected.”

On the other hand, Roth said that because San Diego was one of the first areas of the nation to experience a slowdown, it will be one of the first to stage a comeback. By 2008, the statewide market should recover, he said.

There was some good news about local employment yesterday. A survey of small businesses in the county released by Union Bank showed that 98 percent do not anticipate cutting their payrolls in 2007 and 29 percent plan to increase their staffing levels. But the number of businesses planning to hire new workers was 9 percentage points lower than last year.

“Given the optimism expressed by respondents, I am a little surprised that more businesses are not planning to add employees,” said Union Bank economist Keitaro Matsuda. “The extremely tight labor market and rising wages are perhaps making small businesses rely more on technology for productivity gains.”

Marney Cox, economist for the San Diego Association of Governments, said the county's diverse employment base will keep job growth steady, even if it is significantly slower than in previous years.

“When some pieces of our economy turn down, they're able to pass the baton to others,” he said.

He pointed to job growth in telecommunications, which reversed previous declines with the addition of 800 jobs last year, as one hopeful sign.

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

Mortgage Execs see further dip int he market

North County Times article below describes the worrisome situation that the mortgage industry finds itself following the decline in housing prices and the rise in foreclosures.

Many who continue to minimize the dire situation that real estate is in will find it harder as evidence like this surfaces. Just as the mortgage boom fueled the rising real estate prices from 200- to 2005, a mortgage bust will further draw down prices and limit the the pool of buyers that can buy the homes available.

If you are selling, focus on pricing right, but weight offers from sellers with more money down over those with closer to 100% financing. Realize that the fledgling mortgage industry will also effect your buyers and that of course, effects you. Time is not on your side, so don't waste it by holding on to a price that isn't getting any offers.


If you have tried to sell you home and haven't yet or you need to sell quickly and would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.




Prominent mortgage exec sees further dip in market

By: ANN PERRY - Staff Writer

SAN MARCOS -- The nation's troubled housing and mortgage markets will decline even further before they rebound, a prominent mortgage executive told a gathering of real estate agents at Cal State San Marcos on Friday.

Robert A. Camerota, Sr., senior vice president and manager of GMAC's Mortgage group in Coast Mesa, sketched a bleak forecast for the housing industry: falling home prices, increased foreclosures, more failed mortgage companies and increased revelations of mortgage fraud.

"We're all going to be struggling, struggling more than we are today," he said. "We're headed halfway down the mountain, and we've got a ways to go."

Camerota, who is also chairman of the California Mortgage Bankers Association, was one of seven real estate experts participating in a panel discussion called Conversations '07, sponsored by the North San Diego County Association of Realtors and the university. More than 100 real estate professionals attended the half-day event.

Some members of the panel and the audience said the real estate market in North County was relatively strong because of continued demand from buyers wanting to live in the area. In most parts of the country, housing prices have fallen since hitting a peak in 2005.

Camerota said that guidelines proposed Friday by federal regulators to tighten mortgage lending requirements and reduce problems in the "subprime" mortgage market were necessary. But, he added, they would dramatically decrease the number of new mortgage loans issued, as well as mortgages refinanced.

Subprime loans are made to borrowers, considered high risk because of their poor credit, at interest rates higher than those made to borrowers with good credit.

Camerota's company, GMAC, is one of the nation's largest subprime mortgage lenders. The increasing failure of the company's borrowers to repay subprime mortgages has cost the company more than $1 billion already and could cause General Motors, part-owner of GMAC, to take a major financial hit, according to an article distributed Friday by Dow Jones Newswires.

Revelations of mortgage fraud, the use of bogus income and tax documents by borrowers to obtain large loans, will increase, Camerota predicted. He said that, contrary to what some legislators propose, no new laws are need to combat mortgage fraud.

Instead, he said, "We need to go to the attorneys general and the district attorneys. We don't need more laws. We need more enforcement."

Camerota and other mortgage experts said they would like to see lenders be able to change the terms of existing mortgages to stave off foreclosures by the borrowers. "We're all looking for an opportunity to adjust our guidelines, to go to customers and ask what we can do to help you," he said.

He also predicted more subprime mortgage lenders would fold. He noted that New Century Financial Corp. of Irvine, one of the nation's largest, was laying off hundreds of workers on Friday. The company disclosed Friday that a federal prosecutor and the New York Stock Exchange are investigating the trading of its stock.

Realtors in attendance noted that the booming real estate market of recent years created a "perfect storm" for problems now surfacing: low interest rates, rising property values and lenient lending standards led to buyers taking on larger homes and bigger mortgages than they could afford.

One Realtor said that buyers contributed to the problem, by wanting to "keep up with the Joneses," and to buy their dream homes: "Our clients were saying, 'Supersize Me!' "