EDITOR’S NOTE: The Obama Adminstration is jawboning signs of economic stability as hopeful indications that recovery is just around the cornerPersonally, I think things will get worse before they get better but here’s a report from the Realtors at yesterday’s CSUN/San Fernando Valley Economic Alliance Summit on the economy.
Worst of the Reccession is Past, Home Sales Up
By ANA MARIA COLON, president, and David Walker
Southland Regional Association of Realtors®
The San Fernando Valley appears to be through the worst of the
economic recession and may show signs of recovery sooner than other
parts of the state and the nation, speakers at the fourth annual
Economic Summit said on Wednesday.
economic recession and may show signs of recovery sooner than other
parts of the state and the nation, speakers at the fourth annual
Economic Summit said on Wednesday.
With foreclosures down and home sales up dramatically over year
ago levels, the speakers agreed that the economy appears to be in a
holding pattern.
ago levels, the speakers agreed that the economy appears to be in a
holding pattern.
Businesses, which did their heaviest cutbacks last year, and
consumers are unsure if another wave of foreclosures is on its way. Or,
they wonder, if today’s relative calm suggests that the perfect storm
that battered the economy in 2008 – lead by a decline in home sales, a
plunge in prices and a lockdown in credit – has passed with brighter
days ahead.
consumers are unsure if another wave of foreclosures is on its way. Or,
they wonder, if today’s relative calm suggests that the perfect storm
that battered the economy in 2008 – lead by a decline in home sales, a
plunge in prices and a lockdown in credit – has passed with brighter
days ahead.
“The housing market is no longer the driver of our economic
condition. The wind is out of that sail,” said Dr. William Roberts,
director of the Economic Research Center at California State
University, Northridge.
condition. The wind is out of that sail,” said Dr. William Roberts,
director of the Economic Research Center at California State
University, Northridge.
“We’ve moved from an economy in recession to one that is sitting back waiting to see what happens,” Roberts said.
CSUN and the Valley Economic Alliance co-presented the 4th Annual
Economic Summit which drew 400 attendees for a daylong look into
multiple facets of the economy. The Southland Regional Association of
Realtors was a major sponsor of the summit, providing information on
the ongoing improvement in home sales and the apparent bottoming out of
resale prices.
Economic Summit which drew 400 attendees for a daylong look into
multiple facets of the economy. The Southland Regional Association of
Realtors was a major sponsor of the summit, providing information on
the ongoing improvement in home sales and the apparent bottoming out of
resale prices.
Keynote speakers included Earvin “Magic” Johnson and Dale Bonner,
secretary of the California Business, Transportation and Housing
Agency. Johnson, the L.A. Lakers’ basketball legend and business
entrepenuer, was introduced by Los Angeles Mayor Antonio Villaraigosa.
Reports on each of their presentations will appear on this page in
coming weeks.
secretary of the California Business, Transportation and Housing
Agency. Johnson, the L.A. Lakers’ basketball legend and business
entrepenuer, was introduced by Los Angeles Mayor Antonio Villaraigosa.
Reports on each of their presentations will appear on this page in
coming weeks.
Roberts said that the Valley’s strength is in its diversity, both
in terms of the many faces of its residents and the wide variety of
businesses serving the community. That suggests, along with multiple
indicators, that recovery may appear here sooner than in other parts of
the nation. Economists generally agree that recovery won’t gather full
force until 2010.
in terms of the many faces of its residents and the wide variety of
businesses serving the community. That suggests, along with multiple
indicators, that recovery may appear here sooner than in other parts of
the nation. Economists generally agree that recovery won’t gather full
force until 2010.
“Trust your instincts” when it comes to making economic decisions
such as buying a home, Roberts said, “but then look for confirming
data.”
such as buying a home, Roberts said, “but then look for confirming
data.”
A survey of local businesses found that only one-quarter of
businesses believe they will lay off workers this year. Twenty-three
percent of local companies plan to hire more workers while 51 percent
of Valley businesses think their workforce will be stable.
businesses believe they will lay off workers this year. Twenty-three
percent of local companies plan to hire more workers while 51 percent
of Valley businesses think their workforce will be stable.
That reflects a breath of optimism in what has been until now a rather bleak economic outlook.
Dr. Robert Kleinhenz, deputy chief economist for the
175,000-member California Association of Realtors, agreed that home
sales statewide are improving ahead of the rest of the nation.
175,000-member California Association of Realtors, agreed that home
sales statewide are improving ahead of the rest of the nation.
“Real economic growth is not likely to happen until we get into
2010,” Kleinhenz said. “Nationally, the housing market is dead in the
water, but California home sales are up 143 percent over 2008.”
2010,” Kleinhenz said. “Nationally, the housing market is dead in the
water, but California home sales are up 143 percent over 2008.”
“The question is whether sales will be sustained through the
year,” he said, “and there is concern about what may be a false bottom
in home prices.”
year,” he said, “and there is concern about what may be a false bottom
in home prices.”
Based on sales and inventory, prices should be rising, but the
presence of what some call a “shadow inventory” – distressed properties
held by banks but not yet on the market – has some experts wondering if
today’s calm will continue.
presence of what some call a “shadow inventory” – distressed properties
held by banks but not yet on the market – has some experts wondering if
today’s calm will continue.
This is quite good news! Since the San Fernando Valley appears to be through the worst of the economic recession and may show signs of recovery sooner than other parts of the state and the nation. But unfortunately, more of us suffer still in economic downturns. Just like Sunshine Dodge, was among the dealership closed by Chrysler as they entered bankruptcy. The owner, George Joseph, has posted an open letter to Chrysler, in which he explains his situation. His inventory will be taken and redistributed, including vehicles and parts, and he won’t be getting any compensation. The company won’t pay off the guaranteed loans he got to renovate the dealership at Chrysler’s request, and he’ll be left holding the bag. This only means bankruptcy for him and his family, unemployment for his employees, and no debt consolidation for Sunshine Dodge. This is what we called big bad luck! Let’s just hope that this recession comes to its end.
What about GM going bankrupt? That means many more people here who sell GM cars and anything related to cars will be out of a job.
What about how home buyers who want to buy anything over about $1,000,000, which is the price many homes start at, even in the Valley. They find it extremely difficult to get a loan for 80% of that.
I’m not buying the happy-happy-joy-joy forecast. Sorry.