Housing Crisis Hits California Economy Like Ton Of Bricks
Author: Charles Feldman • URL: http://www.thefeldmanblog.comNovember 6th, 2007 •
Anyone living in California knows that it is the aftermath of an earthquake that reveals its true intensity, not the numbers generated by some graph at a university. An earthquake is really measured in dishes broken, windows smashed or, in the worst cases, houses destroyed.
And so it is that in California, the aftermath of a housing fiasco, is now being felt in lost revenue and painful decisions to slash state budgets—something bound to be repeated in other states as the aftershocks from the mortgage/credit crunch continue unabated.
California governor Arnold Schwarzenegger is now asking state departments to come up with plans for drastic spending cuts on the order of 10 percent and maybe more–this because of the housing market which, in California, is not so much a market as it is a cemetery of dead American dreams.
Education, transportation, health care, among the things to be directly impacted, says the Los Angeles Times.
And, reports the Times, economists are warning of more bad news ahead.
“We are among a handful of states that has a lot of exposure to the housing crash,” the Times quotes one former state economist who says that property, income and sales taxes are all off.
California prides itself on being in the vanguard of many movements–sadly, it is in the vanguard once again. But for once, it would probably prefer to be at the back of the pack on this one.
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Tags: california, crunch, Economy, housing crisis, recession, Schwarzenegger
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
It has hit everywhere. Some homes in Kansas City are taking 9 months or longer to sell. I have a seller who is leaving a new convertible BMW for the buyer at closing.
Well this is the way I see it, right now is the buyers market, sometimes is the seller’s market. Hopehully one day we will get thrue this.
Chris is right. The market has effected everywhere. In Michigan we are having long waits for people to sell as well. What will it take to turn things around?
Rick Marnon, Howell
It’s unreal. The reason we’re having the crisis is because prices appreciated too fast and part of that was partially artificially created by:
Real Estate Investors - purchased places they weren’t even going to live in, just to sell again for more driving prices up.
Interest Rates were too low. Housing prices went up, but as interest rates went down (especially with arms and interest only loans) The monthly payments were still affordable.
I HOPE IT CRASHES AT KEAST 75% (MORE LIKE 50% IS REALITY) BUT I DO HOPE THE HOME MARKET PRICES ARE DEVISTATED. I CAN’T AFFORD A HOME DUE TO THESE CRAZY PRICES … LET IT BURN. I’LL BUY AFTER THE FIRE. A DEEP CRASH MEANS I CAN AFFORD A HOME FOR ME AND MY KIDS.