From DQnews.com:
The median price paid for a Southland home was $385,000 last month, the lowest since $380,000 in April 2004.
The weak start to the home buying season also saw another record dive in the median sales price, the result of depreciation, slow sales for higher-priced abodes and growing sales for discounted homes fresh out of foreclosure.
Developer foreclosures - Bakersfield Californian:
$74 million loan to Irvine-based developer SunCal Cos. for a major housing project in Shafter was foreclosed on Wednesday morning at a public auction on City Hall steps.
SunCal’s outstanding debt to national homebuilder Lennar Corp. had reached almost $86 million with interest and fees by auction time. Opening bids for the 515-acre site started at $10 million. No one made an offer, so the property went back to Lennar.
A pair of Wasco properties borrowed against by Eagle Meadows of Wasco companies operated by Stockton-based developer Kent Hoggan went back to lender Investment Grade Loans Inc. after no one answered the opening bid call at $100,000 apiece.
About 77 acres at Gromer and Magnolia avenues and 75 acres near Palm and Filburn avenues carried about $4.2 million in debt. Both are currently agricultural sites.
Foreclosures reach a new record, again, Bakersfield Californian:They live in one of eight homes completed before Sacramento developer Reynen & Bardis Communities Inc. halted construction here late last year, leaving idle partially constructed houses on many of the cul-de-sac’s dirt lots.
Hidden Grove’s future and that of at least seven other local Reynen & Bardis projects in Bakersfield, Wasco and Shafter are up in the air as the homebuilder’s finances teeter.
Still, Reynen & Bardis is among a dozen or so developers who have defaulted on Kern projects carrying loans of $2 million or more, according to an ongoing Californian survey.
It’s the first time metropolitan Bakersfield has seen such a spike in developer defaults and foreclosures, real estate professionals say, and it’s unclear what the final impact will be.
Foreclosures reached another new high in Kern last month, according to the latest report from the Kern County Recorder’s office.
The monthly tally shows 586 properties foreclosed in February, up from 512
the previous month and 107 in February 2007.
Default notices, meanwhile, arrived at a steady pace despite the short month, with 1,177 recorded. That’s just two more than January’s count, but more than double the 502 sent out a year ago.
The following was posted on the Counties website. Kern Assesors Website:
Kern Residence Values DeclineFrom the LA Times:
But it was a reminder, too, that the truly rural outposts of Los Angeles County -- the nation's top agricultural county not so long ago -- are withering away. And this one happens to abut the proposed site of the largest planned community in county history.Neenach -- and a smattering of other forlorn towns hidden between Lancaster and the Grapevine -- will be the subject of a fierce dispute in the coming year over when enough is enough in Southern California.
On one side, advocates will wave studies showing that there are 6 million more people headed this way in the next 20 years, people who will need roofs over their heads. On the other side, activists will point out that once construction starts here -- above the historical northern boundary of the region's development -- there will be nothing to keep "Los Angeles" from turning into a vast, broken metropolis stretching from Tijuana to Bakersfield.
It would all be very apocalyptic-sounding, if only it was the kind of thing that got Neenach bent out of shape.
When the abutting development is built -- if it is built -- it will be called Centennial. It would be the end, for all intents and purposes, of Neenach.
Billed as a "new town," Centennial would be constructed on a chunk of the 165-year-old Tejon Ranch. There would be 23,000 homes, eight elementary schools, three fire stations.
The Bakersfield Californian is running a story this week titled " Developers prepare for housing market surge". Please read the story, but before you do, please read what they said in January 2007. Please keep in mind what actually happened in 2007.
Local real estate insiders scoff at predicted 'nose dive'
Jan 8, 2007
By Ryan Schuster, Californian staff writer
Bakersfield's housing market is still healthy and is simply going through a market correction that was inevitable after its meteoric rise, according to several local real estate professionals."I don't think it's all doom and gloom," said Jon Busby, a real estate agent with Bakersfield Premier Realty. "We had the investors that came and the builders that came and drove the prices up. It's just correcting itself now."
In December there were 3,181 homes listed on the market, down 13 percent from the month before, according to a preliminary report on December sales compiled by local appraiser Gary Crabtree. The full report is due out next week.
The preliminary report also shows the median list price of existing homes declined from $289,000 in November to $288,000 in December.
"Listings are going down," Crabtree said. "Sellers have come to the realization that the party is over and they can no longer get the prices they were expecting before. We've reached a plateau and that plateau is holding. It is not taking this gigantic nose dive everyone was predicting."
After being one of the nation's hottest real estate markets in recent years, some have described local market conditions as a bubble and predicted Bakersfield's real estate market will be one of the nation's worst in 2007.
But local real estate experts disagree.
"They are crazy. We don't have one of the worst housing markets in the country," said Ray Karpe, the president of Karpe Real Estate Center and the incoming president of the Bakersfield Association of Realtors. "The market is not bad at all. The market has just slowed. It has gone from a ridiculously good market to a good market. We couldn't maintain that forever."
The real estate slowdown has led homebuilders to scale back their building pace locally.
In November, 120 building permits were pulled for single family residences in the city of Bakersfield, down from 225 a year earlier and 650 in August 2005.
Crabtree projects that home prices will decline by about 5 percent in 2007, but he says more dire national projections are off base.
"They don't see the whole picture," Crabtree said. "They're not here. They don't have their feet on the ground. They don't know what's going on."
Leslie Appleton-Young, the chief economist with the California Association of Realtors, anticipates a 7 percent drop in the statewide median sales price in 2007. She said areas like Bakersfield that had a wave of new construction during the housing boom, adding more supply, will experience greater price decreases.
But she said while the housing market is softening, she doesn't believe it is a bubble.
She said she doesn't foresee a real estate crash like the one in the mid-1990s unless the economy slips into recession, causing mass job losses.
"It's all relative. The housing market in general has been accused of being a bubble," Appleton-Young said. "There has been talk of a bubble for four years. In the last year and a half we have seen a significant decline in sales. But the actual decline in prices has been slower. What is protecting the market is we have an improving economy."
But increased foreclosures and a rise in interest rates could spell trouble for the housing market, Appleton-Young said.
Crabtree said last year he routinely saw between 20 and 30 notices of default filed a month. The numbers jumped to 41 in November 2005 and 179 in November 2006.
Local appraiser Jeremy Jans anticipates the local market will actually pick up a little this spring, despite a possible increase in home listings some are predicting.
"Although we will not get back to where it was, it will be a strong market this year," Jans said.
"We are a unique market. We always react a lot slower than everyone else. We are a lot more affordable than other places."
Bakersfield's relatively affordable housing market compared to the rest of the state has prevented a more dramatic market correction, according to Delores Conway, the director of the
Casden Forecast at USC's Lusk Center for Real Estate.
"It's slowing like all places are slowing because the speculators are pretty much gone," Conway said. "Bakersfield has been fairly strong, partly because of lower prices and the shift in population into central California.
"In Southern California we are pretty much land constrained. Bakersfield can still build. As long as the builders don't get crazy, there still is demand. It's just that the housing market is returning to more of a normal level."
THIS WAS MY REPSONSE - MY RESPONSE
If we are losing jobs who will buy all of these homes? If there are less people employed who will rent all of these homes that are available for rent? What will be the impact on prices?
Bakersfield Californian:
Kern County’s unemployment rate rose to 9.9 percent in January, up from 9.4 percent in December and 8.8 percent a year before, according to data released Friday by the state Employment Development Department.
Most of the 11,500 jobs lost countywide between December and January — 8,600 of them — were farm-related, data show. The second-largest category of jobs lost that month was that of trade, transportation and utilities, where 1,000 positions were eliminated. In no main category were jobs created in Kern that month.
Fremont stock is tanking after hours based on big news.
From Yahoo News:
Fremont General Corp., the holding company for Fremont Investment & Loan, said Thursday because it might have to record more write-downs than it originally recorded and is considering putting itself up for sale.
Fremont also said it faces a "significant liquidity risk" and has opted to defer some payments on its junior debt, sending its shares down in late trading.The company said in connection with ongoing reviews and as it prepared its year-end financial statements, it found it might have to record additional asset write-downs and reserves, which could require the bank to adjust its regulatory capital downward.
Price Reduced: 08/29/07 -- $1,300,000 to $1,000,900
Price Increased: 09/14/07 -- $1,000,900 to $1,900,000
Price Reduced: 09/16/07 -- $1,900,000 to $1,095,000
Price Reduced: 02/14/08 -- $1,095,000 to $995,000
Price Reduced: 06/20/07 -- $1,250,000 to $1,225,000
Price Reduced: 08/08/07 -- $1,225,000 to $1,199,000
Price Reduced: 02/04/08 -- $1,199,000 to $949,000
Michael Jackson facing foreclosure:
Yahoo.com:
LOS ANGELES (Reuters) - Michael Jackson's famed Neverland Valley Ranch in California will be foreclosed and sold on March 19 unless the pop star pays a balance of nearly $25 million, property records showed on Tuesday.
FoxNews.com celebrity columnist Roger Friedman reported on the Web site http://www.foxnews.com/) that Jackson has been formally apprised of the foreclosure and that legal documents have also been filed with the Santa Barbara County Recorder's office.
"You are in default of a deed of trust ...," Jackson was told in the five-page filing, according to a copy of the document published by FoxNews.com. "Unless you take action to protect your property it may be sold at a public sale."
According to the documents, if Jackson fails to pay the outstanding balance, estimated at $24.5 million, Neverland would be sold to the highest bidder at a public auction on the courthouse steps.
The county recorder's Web site shows that a Notice of Trustees Sale was filed against Neverland Valley Ranch on Monday but no further details were available and a spokeswoman for the office declined to comment.
Jackson's publicist, Raymone Bain, did not return calls seeking comment on the foreclosure notice.
The onetime "King of Pop" has owned the 2,800-acre (1,133-ha) ranch in the rolling foothills above the California coast since 1988, naming it after the whimsical island where children never grow up in J.M. Barrie's Peter Pan stories.
UPDATE:
Rob Dawg's site:
Bakersfield Californain:3:09PM PST - Carl Cole is no longer associated with Keller Willams Camarillo. Praphrasing; "Bothe the distance and difference in markets, it just isn't a good fit." My brief conversation indicated that Mr. Cole was on premises and she asked if I wanted to talk with him. I declined. I expressed my sadness at his circumstance and made it clear I was sympathetic to his having been decieved but that I was not prepared to let happen to Ventura county what happened in Bakersfield. It was at this point that the K-W front office person made it clear he would not be joining the team
He is no longer affiliated with the company,” said Cristina Better, team leader of Keller Williams Realty’s branch in Camarillo, at about 4:50 p.m. Tuesday.
Earlier Tuesday, The Californian reported Keller Williams Realty recently hired Cole, 60, to work in its Camarillo branch as a broker/associate, according to a Feb 3. advertisement placed with the Ventura County Star newspaper
From Eyewitness News.com:
Carl Cole, of the former real estate duo, Crisp and Cole has a new job in a different real estate market.
29 Eyewitness News put a call into the real estate mogul this morning and before getting hung up on, we learned that cole got a job selling real estate on the coast in Camarillo. Keller Williams Reality recently hired Cole as a broker-associate according to its website.
Carl Cole is still under investigation by the FBI i and the Department of Real Estate for real estate fraud.
Carl Cole, the former Crisp & Cole Real Estate broker and the subject of an ongoing FBI investigation, has a new job selling real estate on the coast
Keller Williams Realty recently hired Cole, 60, to work in its Camarillo branch as a broker/associate, according to a Feb 3. advertisement placed with the Ventura County Star newspaper.
Cole is also listed as a sales associate on the branch’s Web site, which shows he has four homes listed for sale in Oxnard, Port Hueneme and Camarillo.
When reached by phone at his new office this morning, Cole hung up.
Looks like the rats are starting to leave the sinking ship. Former C&C realtor Scott Reynolds attorney speaks out for his client, as does Scott Reynolds and Ty Stewart.
From KGET.com: (BE SURE TO WATCH THE VIDEO)
Former Crisp and Cole real estate agent Scott Reynolds didn't want to talk with us on camera about his former employer David Crisp, but his defense attorney says Reynolds has been talking to the authorities.
"We have been in contact with the FBI and in contact with the prosecutors, I think that's an open fact right now," said defense attorney Carl Faller
Reynolds bought the property from David Crisp and Carl Cole in July 2006 for $414 thousand with 100-percent financing from SunTrust mortgage. The house went into foreclosure in December, and eventually sold for $240 thousand. That's a loss to the lender of at least $174 thousand.
"David Crisp involved a lot of folks: employees, friends, old high school friends in some land deals that he represented to be totally legitimate," Faller said. "But in retrospect they might have been a little sketchy."
Not so, says former Crisp and Cole broker Ty Stewart.
Crisp is now living with Stewart at a Southern Oaks home.
"I have worked for David and Carl from the very beginning. And I wasn't taken advantage of," Stewart said. "But I can only speak for myself."
"Everybody thinks that his situation is funny, and it's just desserts, so they are having a good time with it. You know, but he's gotta live his life," Stewart said
For now, Crisp is staying with stewart at a home in Southern Oaks.
"They are not bad people. And, I think that helping someone out or trying to put someone's life back together with them is not a bad thing," Stewart said
January 2008 Numbers. All California county loses are significant - no area was has been spared.
Bakersfield down 17.87% YOY. The median price is now $224,000. The median price peaked at around $310,000. We are now down 28% from the peak.
What does the future hold? Look at inventory and defaults/foreclosures, from the Bakersfield Californian:
The number of bank-owned properties listed on the Bakersfield Multiple Listing Service, an index of properties for sale, topped the 1,000 mark Wednesday, according to Jon Vaughn, a real estate agent with RE/MAX Magic and the host of a morning real estate radio show, Real Estate Today.
The MLS showed 1,017 bank-owned properties out of a total of 5,023 as of Wednesday, Vaughn said.
“It’s going to make it really difficult for sellers out there who are trying to sell properties,” Vaughn said. The increasing inventory will continue to drive prices down, he said.
Half Moon Bay is wrestling with unpleasant options for responding to a court ruling that officials say threatens the "very existence of our city government" - a $36.8 million judgment against the city for turning a proposed housing development site into wetlands.
Under the worst-case scenario, officials say, Half Moon Bay would become the first Bay Area city forced to dissolve, and the coastal town's land would become an unincorporated part of San Mateo County.
Coming to a city near you?
NBC11.com:
The city of Vallejo is on the brink of becoming the first California city ever to declare bankruptcy, City Council members said Tuesday.
Vallejo may run out of cash as early as March, council member Stephanie Gomes said.
"We've spending more than we've been making for 20 years and it's to pay the piper."
Council members Joanne Schivley and Gomes have announced they will host a town hall meeting this Thursday to discuss the very real possibility of bankruptcy.
Be sure to watch the video at the KRAB link.
From KRAB Radio :
As you'll see in the video, I tried to be civil for the most part. But I did call him a name at the end. But I did it for all the right reasons. It's sad that this guy is eating out and cruising around in an expensive Mercedes, while former customers of his are getting put out on their asses because they trusted this guy.
Many of the people he screwed were good, working-class Bakons like you and I. Just people who thought they could buy a house to raise their families in. But really, David Crisp slammed them into unrealistic deals just so he could go on playing Bakersfield's version of Richie Rich.
Quick math - 1,834 foreclosures times 12 = 22,008 foreclosures. In a county with 140,000 families in homes, this is going to get UGLY!
From Central Valley Business Times:
Homes plunging into foreclosure in Southern California in January increased by 433 percent over January 2007, according to figures compiled by Default Research Inc. of Mt. Pleasant, Pa., which markets foreclosure real estate data.
There were 9,885 homes in Los Angeles County alone that were in one of the stages of foreclosure last month, compared to 6,979 in December, according to Default Research.
Based on population, Riverside County was the hardest hit in Southern California in January 2008 with 8,554 new foreclosures for a foreclosure rate of 6.34 percent.
Kern County is also included in Default Research’s report Thursday. There were 1,834 homes in foreclosure in Kern County last month, a rate of 4.09 percent.
“The word recession has been all over the news for the past few weeks and it is vibrating off the mountains in several California counties,” says Serdar Bankaci, founder of Default Research. “Southern California foreclosures will continue to rise as more adjustable rate mortgages reset and people are unable to make their payments. Combine that with declining home values, the rising unemployment rate and the economic slowdown, and there are sure to be more foreclosures in the coming months.”
DR Horton Website Details
Press Release with details
To all those who already own in these neighborhoods, you have just been fucked! You might want to consider walking away, as you are now 50% underwater on your "investment".
Allied Van Lines Files for Bankruptcy
Moving company Allied Van Lines Inc., along with its corporate parent Sirva Inc., filed for bankruptcy protection Tuesday, the latest victim of a heavy debt load and the downturn in the U.S. housing industry.
In addition to its heavy debt load, the company's relocation services business has been slammed by the downturn in the U.S. housing market.
"Specifically, declining home prices have increased the number of homes the debtors have been required to purchase and subsequently sell for a loss," Sirva said in court papers
Developer stops making interest payments on $500 million in land-backed loans
Focus Property Group, one of the largest developers in Southern Nevada, has stopped making interest payments on $500 million in loans secured by 4,800 acres in the Las Vegas Valley, Pahrump and Victorville, Calif., company executives said Monday.
The company said 2,100 acres of the land involved is in metropolitan Las Vegas, 1,700 acres in Pahrump and 1,000 in Victorville. The company started notifying lenders late last week that it would not make its February interest payments.
Hat tip fred hooper.
December 2007 numbers based on price per square foot are posted at Kerndata.com.:
The following data is a historic representation of average price per square
foot for single family residences sold between July 1994 and December 2007 in
Kern County.While average home price is an interesting barometer, price per
square foot is more accurate in determining sales trends. Please keep in mind
that the numbers are derived from currently "worked" sales by the Kern County
Assessor's office and may not reflect recent activity
For Countrywide Purchase Loans:
Soft Market Category 4-5 loans: Maximum financing will be reduced by 5%
Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.
For Countrywide Home Equity Loans:
Soft Market Category 5 loans: Maximum financing will be reduced by10%
Soft Market Category 4 loans: Maximum financing will be reduced by 5%
Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if
the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.
Popular imagination has the Great Depression opening with a bang in October 1929. We forget that even by December of that year, the market had no idea what was really in store. After a period of wild, bipolar volatility, stocks had taken two big tumbles (a 12.8% drop on Oct. 28 and an 11.7% fall the next day) while the top bankers and "captains of industry" rushed to shore up the market. By November, the Dow had hit its low for the year at 198, down from the giddy September high of 381.
But, the financial pundits and government leaders of the day insisted, the economy's fundamentals were still strong. Mass unemployment was, some months after the crash, still just something that went on in Germany and Britain. America was strong and merely needed a push to keep the financial markets from harming the broader economy.
With that in mind, Herbert Hoover -- only nine months into his presidency -- assembled leaders from the public and private sectors to create an economic-stimulus package. Among the measures, Time magazine reported at the time, was a promise from Congress to offer bipartisan support for a tax-cut package. The proposal called for $160 million in tax relief -- only about $22 billion if adjusted against the gross domestic product at the time, and therefore much smaller than the plan under consideration here in 2008. Read Time's original coverage of the plan.Also on the table was an assurance from the Federal Reserve that it would provide cheaper credit.
None of this worked. What was first seen as speed bump to the expansion of American finance became something much larger.
Within the new stimulus package is an attempt to raise the limit on loans Fannie and Freddie can buy. Good idea? No way! Fortunately, with all the massive fraud going on around the country during the speculative run up, a significant portion of the toxic waste was held by lenders like New Century and over a hundred other lenders that went bust. The losers there were the shareholders of those public companies.
What happens when FNM and FRE take on this toxic waste and a new round of unchecked fraud and massive speculation begins? This time the bag holders will be the taxpayers of the United States! You might want to save your $600 check so you can send it back when the bill comes due for the bankruptcy of FNM and FRE.
WSJ.com
One important provision temporarily raises the dollar limit on mortgages that can be bought or guaranteed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. The current limit of $417,000 would rise above $600,000 and perhaps as high as $730,000 in the most expensive areas, congressional leaders said.
December 2007 numbers are out for California homes. Don't believe the numbers you hear on Kern 1410 on the Saturday morning cheer leading show - where they claim its a good time to buy and prices are very reasonable now and all kinds of other crap. Unfortunately for them(and you) they have been calling the bottom for two years now. They also told listeners to buy in 2004, 2005 and 2006. Anyone who listened to that advice is now underwater by thousands of dollars and will be for many years.
Keep in mind these numbers from DQ don't include the incentives. Also, the sales price numbers include foreclosures which are included as a sale at the overvalued loan amount. If both of these items were excluded and we had just the actual homes sold to individuals; prices would be down 25% or more from their peak.
From DQ News.com
Bakersfield down 15.25% (not including incentives or foreclosure price adjustment)
SF Chronicle:
An executive of a collapsed subprime mortgage lender jumped to his death from a bridge Friday, shortly after his wife's body was found inside their New Jersey home, authorities said.
The deaths of Walter Buczynski, 59, and his wife, Marci, 37 — the parents of two boys — were being investigated as a murder-suicide, according to the Burlington County Prosecutor's Office.
Walter Buczynski was a vice president of Columbia, Md.-based Fieldstone Mortgage Co., a high-flying subprime mortgage lender that made $5.5 billion in mortgage loans and employed about 1,000 people as late as 2006.
However, it has since filed for bankruptcy and now has fewer than 20 employees. The company had recently filed court papers seeking approval to pay about $1.1 million in bonuses that would be divided among Buczynski and other staffers so the company could wind down its lending operations and go out of business.
From the LA Times.com:
California's jobless rate jumped to 6.1% in December, up from 4.8% a year ago, prompting Gov. Schwarzenegger today to take steps to combat rising unemployment.
The steep rise in joblessness from 5.6% in November showed that the ongoing housing slump, the fallout from the sub-prime mortgage debacle, and widespread production shutdowns amid the Hollywood writers strike took their toll on the state's economy in December.
Schwarzenegger called an emergency meeting of state officials Thursday. The governor instructed agency directors and department heads to immediately recommend ways to speed the release of $29 billion in unallocated funds from the 2006 infrastructure bonds. He said he wants to speed up construction of roads and schools and levee repairs to stimulate economic growth and "keep more people working."
"The people of California are feeling the hit of the sub-prime mortgage
crisis and housing slump," Schwarzenegger said in a statement today.
From the WSJ.com:
Las Vegas Default Highlights Commercial-Property Crunch
The credit crunch that roared through the residential real-estate market is starting to bite commercial projects, too.
Yesterday, Ian Bruce Eichner, the developer of a twin-tower casino resort in the heart of Las Vegas, defaulted on a $760 million loan from Deutsche Bank AG after he failed to get refinancing. The default on the loan supporting the $3 billion Cosmopolitan Resort Casino is a signal of trouble for Mr. Eichner, who gained notice during an earlier real-estate downturn in the early 1990s when he lost several projects in New York City.
Remember when the "Shark" came to Bakersfield? Things looked so promising for McAllister Ranch, if you believed all the hype. This project is out in the middle of nowhere. What were these people thinking? Chalk this one up to another developer who believed the hype and is now in deep trouble.
Also, look for Standard Pacific (according to numerous report), to file for bankruptcy protection very soon. The smartest guys in the room, in this case were from Probuilt Homes. They shoved all this land up SPF's back side and walked away with millions. Meanwhile SPF's stock has gone from $50 to $1. More out of town developers who thought they were the smart money, who turned out to be pretty dumb! Notice these guys are also from Orange County.
Bakersfield Californian:
The developer, Irvine-based SunCal Cos., is “adjusting” its construction plans,
a company spokesman said Friday.When homes will appear — and when McAllister’s showcase golf course will open for public play — remains up in the air amid a lawsuit and a smattering of liens filed against the developer. “We previously had a very aggressive, accelerated construction schedule, but with the current challenges of the housing market, it has become necessary to adjust our timelines,” SunCal spokesman Joe Aguirre said.
Two years ago, SunCal predicted residents might move into the planned 6,000-home community by the end of 2006. As recently as September, the golf course was slated to open in the first three months of 2008.
The Greg Norman-designed golf course at McAllister Ranch is now at the center of a lawsuit seeking to recover $830,530 in allegedly unpaid bills.
As of Thursday, contractors, subcontractors and building supply companies involved with work at the McAllister Ranch property had filed at least 24 mechanic’s liens against SunCal and its affiliate, seeking more than $2.2 million for construction services and supplies, Kern County Recorder’s office records show.
“I understand the developer has shut down the whole project,” said Mike Garcia, owner of Garcia Roofing. Garcia’s company was hired by Bakersfield’s Klassen Corp. to do the roofing for McAllister Ranch’s golf clubhouse, he said.
Garcia finished the roof, but is out $61,980, he said.
“I’ve never lost out on anything this big,” said Garcia, who said he has been in the local construction business for 32 years.
He said he believes the developer failed to pay Klassen Corp.
Click to read Public Opinion of the Govenator.SACRAMENTO -- Facing the worst fiscal crisis of his tenure, Gov. Arnold Schwarzenegger today proposed a $141-billion spending plan that would reduce healthcare programs for the poor, close 48 state parks, release tens of thousands of nonviolent inmates early and make substantial changes in almost every area of the state's budget.At the same time, he proposed expanding the state's debt load by more than $40 billion to finance more construction at public schools, colleges and other major institutions.
Schwarzenegger said the reductions were essential to close a $14.5-billion deficit created by the slumping housing sector and other economic factors.
The golf course in Arvin is for sale. The sale is no big deal to me, not sure who will pay $8.5 million for a bad golf course. Does anyone think the development potential is really there for this project? From the listing:
Property Description:
The golf course was opened in 1992 as PGA 18 hole golf
course.The course is 160 acres and 7,300 yard championship course with 300 yard
driving range. The course embrce 9 lakes which flows around 13 holes.World
ranking PGA golfer, Jim Furyk, played Sycamore Canyon golf course for1993 PGA
Qualifying First Rounding Course.The golf course has extra land to be developed for 49 single house and 55 townhomes also 111 unis resort style hotel site within the golf course.The surrounding area is being developed by major developer for 3,000 residential units with community style shopping center and much more.
The weak hands are folding, just as the first wave of weak handed homeowners have done. Most of the "developers" (speculators) listed here are from out of town - Sacramento appears several times - soon this contagion will spread to the "stronger" hands. 2008 will make 2007 look like a game of musical chairs, without the chairs - if you are standing right now, when the music stops on your developments finances, there will be no one to take your place. These foolish speculators were paying $100k to $200k for raw land that only 6 years ago was selling for $10k-$20k per acre - what were they thinking?
From the Bakersfield Californian:
BY GRETCHEN WENNER AND VANESSA GREGORY,
Homeowners aren’t the only ones defaulting on property loans these days.
While not unprecedented in California, the sudden crop of developer defaults are apparently a first for the metro area.
“Never in Bakersfield,” said Bakersfield appraiser Gary Crabtree of Affiliated Appraisers.
In the early 1990s, Crabtree said, the Palmdale-Lancaster real estate market cratered because of layoffs in the aerospace industry.
Tom Cook, general manager of Bakersfield paving and grading firm Burtch Construction, said Burtch is owed money by Dunmore Diamond Ridge LLC for work at a southwest Bakersfield project touched by a complicated November bankruptcy filing.
“We haven’t been paid anything at all,” Cook said Thursday about a $900,000 bill submitted in mid-May.
Defaults:
• Paladino Hills LLC
Loan amount: $10 million
Location: 80 acres near the northwest intersection of Highway 178 and Alfred Harrell Highway• Dunmore Westport LLC
Loan amount: $20 million
Location: 79 acres at the southwest intersection of Morning and Paladino drives• GSJ Co. LLC
Loan amount: $5.5 million
Location: 147 acres at the northwest intersection of Paladino and Morning drives.• Reynen & Bardis (Cal Kern) LP
Loan amount: $6.8 million
Location: 58 acres near Morning Drive between 178 and Paladino Drive• Canyons LLC
Loan amount: $3.3 million
Location: Nearly 847 acres south of Hart Park and Alfred Harrell Highway.• Other
Loan amount: $5.1 million
Location: 33 acres on the north side of Paladino Drive east of Morning Drive.• Dunmore Diamond Ridge LLC
Loan amount: $30.6 million construction loan
Location: 77 acres on the south side of McCutchen Road between Ashe and Stine roads.• BVGG LLC
Loan amount: $4 million
Location: About 72 total acres on several parcels near Cottonwood Road around Casa Loma Drive and Watts Drive, including former golf course land switched to residential use.• Cottonwood Villas LLC
Loan amount: $2 million
Location: 40 acres north of Cottonwood Road between Planz and Pacheco roads.• Poplar Pointe LLC
Loan amount: $9.9 million construction loan
Location: 10 acres on the northwest corner of Filburn and Poplar avenues.• Eagle Meadows of Wasco 77 LLC; Eagle Meadows of Wasco 75 LLC
Loan amounts: Two loans of $2.1 million apiece
Locations: 77 acres of ag land at the southeast corner of Gromer and Magnolia avenues; 75 acres of ag land near the southwest corner of Palm and Filburn avenues.• SunCal Mission Lakes LLC
Loan amount: $74.3
Location: About 515 acres north of 7th Standard Road northwest of the intersection with the Calloway Canal.• Desert Star Communities LP and related companies
Loan amount: $11.4 million construction loan
Location: 23 acres at the northwest corner of 35th Street West and Orange Street.
1) Builder reality check:
Before we review the rosy BS forecast from the California Building group (aka building spin machine), lets look back at their 2007 forecast which turned out to be nothing but hot air :
The new home market will slowly return to what the CBIA says are historically normal levels.CBIA Chief Economist Alan Nevin forecasts that housing starts for single-family homes, condominiums, and apartments should total between 155,000 and 170,000 this year, about the same or slightly lower than in 2006.
He says it will be a “perfectly tolerable year” for builders.
That’s well short of the 220,000 new housing units the state says are needed to meet population growth, according to the CBIA.“I see a nice stable market, certainly not anything like the craziness of 2005,” Mr. Nevin says of the Central Valley north of Bakersfield.“But the market is growing. I look at places like Modesto and Merced and I see a stable growth there because the employment base is growing,” he says. “So you’ll see a nice steady type of market in the northern Central Valley.”
2) 2008 Predictions (hat tip Lander):“By mid-2008 the housing industry will show signs of growth,” says Mr. Nevin. “Continued population growth, a reduction of existing inventory and a return to normalcy in the credit markets are a recipe for a more positive 2008. As a result, we are projecting a slight increase in new home sales over last year.”
We project that the home building business will improve modestly in 2008 as smaller homes are once again produced. We project 17,000 units of single-family housing for 2008 in the San Joaquin Valley,” he says.
Multifamily production has traditionally been negligible in the San Joaquin Valley, typically accounting for no more than 10 percent of output. “We see no change in that picture and project 3,000 units of multifamily units permitted in 2008,” Mr. Nevin says.
Statewide, Mr. Nevin predicts that new-home sales will increase in the second half of 2008, leading to the construction of more than 80,000 new single-family homes this year, up from about 70,000 last year. He also expects production of condominiums, apartments and town homes to increase to about 46,700, compared to about 44,000 in 2007.
Based on what? The need to make a sale?I don't think it's as lousy as everyone puts on," said Ray Karpe, the immediate past president of the Bakersfield Association of Realtors, a local trade group....
And, he predicted, home prices will reverse direction, and start an incremental climb. "I think home prices, home values, will creep up," Karpe said.
FORECLOSURES
Foreclosed properties also hit annual and monthly highs. A total 3,007 properties foreclosed last year compared to 408 in 2006. The next closest year was 1998’s total of 2,683. December’s count of 421 foreclosed properties set a new monthly record and continued a quickening pace since the beginning of the year, when 103 foreclosures were recorded.
