No Spillover - No Contagion - Not...(sarcasm from Mish)..."Inland Empire sales down 50%+ with a 15%+ increase in the number of projects. San Diego sales down almost 40% with a staggering 45% increase in the number of projects. These are horrible numbers, but ground zero reports are much worse"...
"1 – Too much inventory.
2 – Not enough buyers.
3 – Buyers that can’t qualify.
4 – Desperate sellers dropping prices.
5 - #4 adds to #1
6 – Sellers that can’t sell existing homes.
7 - #6 adds to #3
8 – Did I already say, too much inventory.
9 – Buyers waiting for the bottom.
10 – Rising foreclosures hitting the market.
11 - #10 adds to #1
12 – Flipper inventory coming on the market.
13 - #12 adds to #1"
I just spent the the last four days in Orange County, and I my impression is that based on the size and design of existing homes in the Anaheim area, the asking prices are simply absurd.
Update: the New Century bankruptcy is going to hit the OC hard, since they are canning 3,200 people immediately and they were headquartered in Irvine. Those folks will probably have a hard time making their own mortgage payments, unfortunately.
Great quote referring to New Century from the linked LA Times article: "They were big, strong, gigantic -- and arrogant too, cocky," said analyst Matthew Howlett at the investment firm Fox-Pitt, Kelton. "
The bankruptcy filing will "enable it to break leases on its offices in 35 states"...that sounds like spillover to me. In the end, this company will cease to exist entirely, in my opinion.