BAKERSFIELD BUBBLE MARKET CALL - The bottom is in!

Former housing bubble BEAR and the man (ME) whole predicted this financial mess says the following:

I am officially calling a bottom in the local housing market and saying its a good time to buy a house, IF you can afford the payments (no more than 30% of monthly income), put down at least 10%, have good credit to afford a low FIXED RATE interest loan and have 6 months of cash reserves (to cushion the blow of the unexpected, job loss, medical bills, etc..).

Will the house prices continue to drop...probably another 5-10%. But if you put down 10% you will be able to cushion the blow.

Right now median house prices are less than 2.6 times median income..during the boom we were at 8.1 times, clearly unsustainable

Final post

Thanks to all the visitors who come to this site daily.

I have decided to do something else with my free time. I have enjoyed posting on the collapse of our local bubble economy on this site and on the bubble blogs for nearly 4 years. Its time to move on. The economy will suck for sometime and so will the housing market.

I especially want to thank those who emailed me with comments thanking me for saving them hundreds of thousands of dollars (by not purchasing a home) and saving them from financial ruin (I truly appreciate those comments!!).

Good luck and best to all!

Gottchalks to file for bankruptcy?

Gottchalks update:

Gottschalks employees have been told to quickly cash pending paychecks and to expect a bankruptcy filing as soon as today, the Business Journal has learned.

Employees say the department store chain may also announce the closing of about 15 stores.

Meanwhile, Gottschalks executives have also made contact with at least one major liquidation firm that specializes in going out of business sales for distressed retail operations.

On a more hopeful note, Women’s Wear Daily, a retail trade publication, reported on its website today that Gottschalks has been in negotiations with Everbright and El Cortes Ingles that would call for both to put up $25 million for a $50-million infusion into the company and that a vote on the proposed investment could come as early as today.

El Cortes Ingles is Spain’s largest department store chain and owns about 16 percent of Gottschalks through the Fresno-based retailer’s 2000 acquisition of Harris Co.

Valley dairy industry in bad shape

Let me be the first to say I have no sympathy for these greedy dairyman!

They are partly responsible for driving up our land and home prices during the boom with their 1031 money. In addition they receive massive goverment subsidies and most of them are very wealthy because of it. Finally, they are horrible polluters of our air and water. I hope 100% of them go out of business and leave town!

Local Bloggers comments:

Comment by takingbets
2009-01-08 07:48:05
my husband talked to a local dairyman yesterday. He said in the 40 years he’s been in business he’s never seen anything like what’s happening now. His pricing for milk and cheese is the lowest he’s ever charged and yet the grocery stores are not passing the lower prices down to their customers. Business has virtually stopped, he is not able to move his products because the end users are not buying like they used to.

Ny Times.com:

FOWLER, Calif. — The long economic boom, fueled by easy credit that allowed people to spend money they did not have, led to a huge oversupply of cars, houses and shopping malls, as recent months have made clear. Now, add one more item to the list: an oversupply of cows.

And it turns out that shutting down the milk supply is not as easy as closing an automobile assembly line.

As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen must deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse.

Mr. Van Groningen’s company does not own the surplus milk powder, but merely stores it for the new owners: the taxpayers of the United States. To date, the government has agreed to buy about $91 million worth of milk powder.

Dairy scum in a dispute:

The Borba cousins — Kern’s leading dairy luminaries — are suing each other over fallout from a $42 million-plus deal they made last year.

In brief, cousins George Jr. and James each seek roughly $3.5 million from the other and lob some nasty allegations along the way, court documents show. The dispute concerns a lease agreement for land used to grow feed.

Dick Cheney is a blind idiot!

Bush and Cheney start re-writing history:

WASHINGTON – Vice President Dick Cheney says that his boss, President George W. Bush, has no need to apologize to the American people for not doing more to head off the financial calamity, saying no one saw the crisis coming.

During an interview Thursday with The Associated Press in his West Wing office, Cheney defended the administration's performance on an economy that is growing weaker daily and which recently collapsed in spectacular fashion. Cheney said that "nobody anywhere was smart enough to figure it out."

He said Bush doesn't need to apologize because he has taken "bold, aggressive action."

Notices of default set a new record.

County of Kern Link

1,553 NOD's for December. The highest ever!


I recall one of our posters saying that the bottom was in for NOD's. Not sure if we should have believed him...just saying!

Former real estate moguls luxury HQ sold...blogger (me) nails the FMV!

The former HQ for the Twin Towers project was sold in late December 2008. The price was $1 million dollars. See the comments from the orginal listing in May 2007:

Bakersfield Bubble said...
10,000 sq ft x 2.00 x 12 = $240,000 expected gross rent. Since the project is not improved and has no tenants I will use a cap rate of 12% = $2,000,000. Then discount 50% = $1,000,000 MAX!

Here are a few stories on this building:

Crisp HQ listed for $4.5 million (5-1-07)

Crisp defaults on HQ (8-28-07)

Crisp building foreclosed (12-27-07)

Padre Hotel Partnership Launches $18M Renovation

Globe St.com:

BAKERSFIELD, CA-A group called Padre Hotel Partners LP has launched an $18 million renovation of the Padre Hotel. The renovation of the 10-story, 80-year-old hotel at 1813 H St. will rehab the interior in a plan designed to restore the property to its previous popularity.

Graham Downes, principal of San Diego-based Graham Downes Architecture, has partnered with Brett Miller, CEO of Eat Drink and Sleep, also based in San Diego, to form Padre Hotel Partners. Located in the historic area of Bakersfield, the hotel has been redesigned by Graham Downes to “bring life back to this once-popular attraction,” according to the architects. Built in 1928, the Padre was long known as one of the most popular gathering places in Downtown Bakersfield. Elements of the hotel’s 1928 origins will be incorporated into the redevelopment to blend past and present and reestablish the Padre Hotel as a landmark, the developers say.

The completed project will feature 112 guest rooms and suites, a restaurant, a bar, nightclub lounge and a 24-hour café. The renovation will include meeting rooms and event space, fitness and business centers, and other amenities to position the hotel as a business and leisure destination.