Post by unlawflcombatnt on Apr 11, 2007 4:22:53 GMT -6
In an LA Times article titled Antelope Valley struggles with memories of '90s housing crash, writt the decline in California housing is described once again. Below are excerpts from the article by Tims writer Kim Christensen.
"This is looking like 1990 all over again," he said.
For many in the high desert north of Los Angeles, those are chilling words.
The economic downturn that racked California in the early 1990s hit especially hard there. The mere mention of the time summons images of squatters taking over their neighbors' abandoned houses, of spiking crime rates and unprecedented gang killings, of hemorrhaging home values that took a decade to rebound.
With foreclosures on the upswing and a fresh crop of "For Sale" signs sprouting in frontyards, Rockey and others are bracing for a return trip to a decade they'd rather forget.
"A lot of people are panicking," said Jaimes Gumaro, a North Hollywood real estate agent who has a listing in a Palmdale neighborhood dotted with homes for sale. "They were expecting to have all this equity, and then it suddenly stopped. Now, they just want to get their money out of it. They're saying, 'I'm outta here.' "...
What's more, the Antelope Valley has attracted waves of first-time buyers and others with modest incomes and sometimes spotty credit who must rely on high-cost sub-prime loans. It's these borrowers who are now defaulting in record numbers, leading to a precipitous jump in foreclosures....
The numbers help tell the story.
Foreclosure sales in Lancaster and Palmdale rose to nearly 200 between Dec. 1 and Feb. 28, an eightfold increase in a year. That's still well below mid-1990s levels, however, according to DataQuick Information Systems, a La Jolla research firm.
Notices of default more than doubled over the same period a year earlier, totaling more than 1,000 from December through February.
Housing starts dropped nearly 33% from 2005 to 2006, from 5,076 total units to 3,565, according to the Construction Industry Research Board in Burbank.
Home sales, including new, resales and condos, fell nearly 40% this year over last for the three months ended Feb. 28, according to DataQuick. Home values, which shot up 25% a year earlier, rose a tepid 3% for the 12 months ended Feb. 28...
"Now, we have all these folks who can't afford their homes and their loans are adjusting, literally by the thousands," said Peter Terracciano, who founded his Palmdale brokerage, Re/Max All Pro, in 1990, as the housing boom began to go bust....
Brian Ludicke, Lancaster's planning director, said residential building permits for this fiscal year would number about 1,100 — down from a high of about 2,800 in 2005. Many builders are scaling back projects, seeking extensions on start times or not starting them at all, he said...."
Despite the obvious downturn in housing sales, new home continue to be built, as evidenced in the following passage:
"Although no major new developments have been announced lately, work continues on already approved projects such as the 7,000-home Ritter Ranch development in Palmdale.
Empire Cos. also is proceeding with Anaverde, a 2,000-acre development in west Palmdale that will have about 5,000 homes. About 900 have been completed, Gutierrez said....
Drywall contractor Rockey, who gets most of his work from large builders, has a dimmer outlook.
"Every customer has a different story every day," he said, "and they're not good stories."
He recently learned that the builder of 300 new houses he'd been lined up to drywall in Rancho Cucamonga abruptly halted the project, costing Rockey $4 million in work.
"We're getting killed," he said....
Homeowner Debbie Brown remembers the last time it got ugly in Palmdale, right after she moved there in 1991. When the size of their mortgages exceeded the value of their homes, she said, people simply walked away.
"Houses were getting dumped right and left," she said. "There were all these empty houses, and people were crawling in through the screens and living in them. It was really scary...."
Terracciano, the Palmdale real estate broker, fears that many homeowners will walk away from their properties, as they did before.
"Commuters are saying, 'Why am I driving four hours a day, getting up at 4 o'clock in the morning and getting home at 7 or 8 at night, when my home is $50,000 upside down? Why am I banging my head against this wall when I can go back to L.A.? I might not be able to own a house, but my quality of life will be better, and I'll be able to spend more time with my family.' "
He said his business was off 30% so far this year, on top of a 20% decline last year. One of five sales has fallen out of escrow in the last month, he said, as lenders have pulled back on sub-prime loans...."
"This is looking like 1990 all over again," he said.
For many in the high desert north of Los Angeles, those are chilling words.
The economic downturn that racked California in the early 1990s hit especially hard there. The mere mention of the time summons images of squatters taking over their neighbors' abandoned houses, of spiking crime rates and unprecedented gang killings, of hemorrhaging home values that took a decade to rebound.
With foreclosures on the upswing and a fresh crop of "For Sale" signs sprouting in frontyards, Rockey and others are bracing for a return trip to a decade they'd rather forget.
"A lot of people are panicking," said Jaimes Gumaro, a North Hollywood real estate agent who has a listing in a Palmdale neighborhood dotted with homes for sale. "They were expecting to have all this equity, and then it suddenly stopped. Now, they just want to get their money out of it. They're saying, 'I'm outta here.' "...
What's more, the Antelope Valley has attracted waves of first-time buyers and others with modest incomes and sometimes spotty credit who must rely on high-cost sub-prime loans. It's these borrowers who are now defaulting in record numbers, leading to a precipitous jump in foreclosures....
The numbers help tell the story.
Foreclosure sales in Lancaster and Palmdale rose to nearly 200 between Dec. 1 and Feb. 28, an eightfold increase in a year. That's still well below mid-1990s levels, however, according to DataQuick Information Systems, a La Jolla research firm.
Notices of default more than doubled over the same period a year earlier, totaling more than 1,000 from December through February.
Housing starts dropped nearly 33% from 2005 to 2006, from 5,076 total units to 3,565, according to the Construction Industry Research Board in Burbank.
Home sales, including new, resales and condos, fell nearly 40% this year over last for the three months ended Feb. 28, according to DataQuick. Home values, which shot up 25% a year earlier, rose a tepid 3% for the 12 months ended Feb. 28...
"Now, we have all these folks who can't afford their homes and their loans are adjusting, literally by the thousands," said Peter Terracciano, who founded his Palmdale brokerage, Re/Max All Pro, in 1990, as the housing boom began to go bust....
Brian Ludicke, Lancaster's planning director, said residential building permits for this fiscal year would number about 1,100 — down from a high of about 2,800 in 2005. Many builders are scaling back projects, seeking extensions on start times or not starting them at all, he said...."
Despite the obvious downturn in housing sales, new home continue to be built, as evidenced in the following passage:
"Although no major new developments have been announced lately, work continues on already approved projects such as the 7,000-home Ritter Ranch development in Palmdale.
Empire Cos. also is proceeding with Anaverde, a 2,000-acre development in west Palmdale that will have about 5,000 homes. About 900 have been completed, Gutierrez said....
Drywall contractor Rockey, who gets most of his work from large builders, has a dimmer outlook.
"Every customer has a different story every day," he said, "and they're not good stories."
He recently learned that the builder of 300 new houses he'd been lined up to drywall in Rancho Cucamonga abruptly halted the project, costing Rockey $4 million in work.
"We're getting killed," he said....
Homeowner Debbie Brown remembers the last time it got ugly in Palmdale, right after she moved there in 1991. When the size of their mortgages exceeded the value of their homes, she said, people simply walked away.
"Houses were getting dumped right and left," she said. "There were all these empty houses, and people were crawling in through the screens and living in them. It was really scary...."
Terracciano, the Palmdale real estate broker, fears that many homeowners will walk away from their properties, as they did before.
"Commuters are saying, 'Why am I driving four hours a day, getting up at 4 o'clock in the morning and getting home at 7 or 8 at night, when my home is $50,000 upside down? Why am I banging my head against this wall when I can go back to L.A.? I might not be able to own a house, but my quality of life will be better, and I'll be able to spend more time with my family.' "
He said his business was off 30% so far this year, on top of a 20% decline last year. One of five sales has fallen out of escrow in the last month, he said, as lenders have pulled back on sub-prime loans...."