Home Front

A blog about the economy and the Sacramento-area real estate market.

December 30, 2008
2008: Now that was a year for the books
A few moments of quiet here to recall some memories of this year that's coming to an end.

- Waking up New Year's morning for the first year of my life with a feeling that was something along the lines of business reporter dread. I knew 2008 was going to be a long scary haul. It absolutely was. Now it's almost over.

- A Sunday night in March: My wife and I are waiting for the Asian markets open with a feeling that the world as we knew it was about to end. Honestly, that day brought such a serious, raw feeling of fear. Bear Stearns was about to implode and take down everything with it. And then....the Federal Reserve stepped in to help JPMorgan Chase buy the giant investment bank. It also cut interest rates and we backed away from the precipice. For the moment. We'd be back to that scary feeling time and time again, obsessively watching CNBC as the stock market opened in the mornings.

- The parade of bankruptcies. Dunmore Homes went out of business. Then John Reynen of Reynen & Bardis Communities filed for personal bankruptcy protection. So did C.C. Meyers, owner of Winchester Country Club. And then so did Christo Bardis of R&B. I doubt ever in their wildest imaginings did they imagine it would all some day come to this.

The phone calls: I listened for hours and hours this year as people called in looking for help with their mortgage troubles. Anytime there was a story about loan modifications, about banks, about foreclosures, they called, five and six a day, with stories of banks not working with them, of not sleeping at night, of wondering who would rent to them when their nightmare came to an end. They were looking for any kind of help. These were just stories in one region in one state in a nation filling up with this kind of trouble. Heartbreaking stories. From January through the end of September MDA DataQuick counted more than 19,000 foreclosures in the capital region. More than 180,000 across California. Now, with so many people losing jobs in an economy pulled down by foreclosures, the risk is growing for thousands and thousands more foreclosures, the Mortgage Bankers Association tells us.

Plumas Lake: When gasoline hit $4.19 early this summer I took a drive up to the Marysville and Linda area to see those subdivisions that became home to thousands of commuters priced out of Sacramento during the housing boom. They were really feeling it now in their pocketbooks with rising gas prices. I was also struck by the sense of desolation in some of these neighborhoods of Edgewater and Plumas Lake. I saw a project that looked like it opened yesterday and nearly all the lawns were already unmowed. There were literally thousands of lots with utility lines sticking out, awaiting houses that won't be built for years. I saw weeds and tall grass as far as I could see. Model homes with dead lawns. It was like a  vision of Texas in the 1980s oil collapse. All I could think at one point was this: you could gather every player in the real estate, government, home building and mortgage sector that contributed to this scene of extreme overbuilding and they might say: What have we done?

Texas: A bright sunny day in May, traveling the interstate between Dallas and Fort Worth. The billboards showed new homes for $170,000. What planet was this?

A foreclosure bus tour: I think it was March, riding around Elk Grove for an entire Saturday on one of the first foreclosure bus tours. I live in Elk Grove and that's not the way you want to see your city. Dead swimming pools. Crayon drawings on the bedroom walls. Stuff left behind like the occupants left in 30 seconds. There were so many three-year-old houses where the owners never put in a back yard. What a weird adventure.

A call from The New York Times: It was October and the caller was from the newspaper's Sunday Magazine, asking questions about Dunmore Homes' Monterey Village in Elk Grove. They were scouting locations for a national picture essay tentatively called "Ruins of the New Guilded Age" or something like that. Las Vegas was on their list, too. I wonder if they actually came out and shot those photos.

Who are you banking with? By late fall the American banking landscape was so altered  it was impossible to remember what bank belonged to who. All year they fell like flies and were absorbed by others: Bear Stearns, Merrill Lynch, Countrywide, Wachovia, Washington Mutual, IndyMac, Citigroup. I must be forgetting someone. All you needed to remember anymore was Bank of America, Wells Fargo and JPMorgan Chase owned them all.

Whew, it was that kind of year, all right. Fear of financial collapse. An endless rolling wave of defaults and foreclosures. Layoffs, downsizings, bankruptcies. Huge mood swings in the Dow Jones Industrial Average. Crossing familiar names off my list of real estate industry sources as they disappeared into unemployment. Sacramento County's median price falling back below $200,000. (On the other hand I talked with a lot of happy new homeowners this year. That was the really cool side of the free-falling home prices).

Looking  back today, it seems that we packed 10 years of emergencies, suspense, and drama into 2008. And that didn't count the presidential election. I think I am ready, more than ready, for that crystal ball to drop in downtown Sacramento and tell me we made it through. Then, let's try this again next year.

Image courtesy of www.thevicenarian.com/2008/02 

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