(Source: By Rachel Raskin-Zrihen Times-Herald, Vallejo, Calif.) – Solano County homeowners lost about half their property’s value since the housing bubble burst, which, like elsewhere, seriously impacted the area’s economy, experts say.
Four years after the recession hit in December 2007, five Bay Area counties have lost a collective $386 billion in home value, according to the real estate information gathering firm, DataQuick. Among those, Contra Costa County was hit the hardest, followed by Alameda, Santa Clara, San Mateo and San Francisco. There was a wide variation within counties, with some areas hit harder than others, and Solano County was among the hardest hit.
The median Solano County home price in December, 2001 was $355,000, but had fallen to $185,000 by last month, former Solano Association of Realtors president Todd Willis said. The damage was not as bad, although it was still significant, in Napa County, where the median house sold last month for $335,425 compared to $569,450 in December, 2007, Willis said.
The loss in property values resulted in a corresponding loss in property tax revenues for Solano County.
“Overall revenues for the county, basically since the start of 2007, we’ve lost a cumulative $6.6 billion, or 15 percent, in the value of the assessment roll,” Solano County Assessor/Recorder Marc Tonnesen and Assistant Assessor-Recorder Kathy Eodossa said. “That’s about $66 million in property taxes.”
And that translates into deteriorating roads and other quality of life issues, current Solano
Association of Realtors President Paul Winders said.
Solano and Napa counties are by no means alone in this.
The average home in Contra Costa County lost about $343,000 in value; followed by Alameda County with about $291,000. Santa Clara County homes on average lost 245,000 and San Mateo County $222,000, according to DataQuick.
During the boom, home equity loans helped launch small businesses, paid for kitchen remodels, new boats and trucks, vacations, college tuitions and was a kind of security blanket for those nearing retirement. Those have essentially dried up — new bank-originated home equity lines of credit have plunged in the Bay Area by nearly 90 percent — reducing confidence and crushing many of those same businesses. And making matters worse, while the equity went away, the debt remained, further hobbling those who hung on to their homes.
Vallejo’s Vigil Mechanical owner Cam Vigil said his business floundered at the start of the recession, but some strategic adjustments have pulled it through.
“It was bad for a couple years, but we fought through it and we’re doing fine, now,” Vigil said of his heating and air conditioning company. “We started aggressively going after the commercial clients when the residential dried up. We lowered our prices, and our workers are working for less than they ever have before and we’re working mostly out of the area. But last year was a banner year and 2012, looks good.”
Taxable sales, an indicator of business health and consumer spending power, were down by double digits in most Bay Area cities between 2007 and 2010, the most recent figures the Board of Equalization has available. There has been a recovery since a 2009 low, but some economists say consumer spending has undergone a permanent change.
“Consumer spending is going to be lower going forward for two reasons,” said Jon Havemen, chief economist with the Bay Area Council’s Economic Institute. “Consumers have waked up to the fact that ‘Wow, I need to save for retirement, and not only do I need to save, but I don’t have all this money in my house.”
No one can be sure what changes the new year will bring.
Benicia’s median home sale price continued falling as of last month, for which Willis could offer no explanation, although in Vallejo they seem to have steadily risen since August, he said. There’s good and bad news in this fact, he said.
“This tells me that Solano County is a very affordable place to buy a home now,” Willis said. “I believe that 88 percent of people who live here can afford a home here. The minimum income to qualify for a mortgage here is $24,180. Payment on that, with taxes and insurance, would be $810.”
The news is less positive for existing homeowners, although Willis said he “gets the sense in my daily work, that fewer homes are available and offers are coming in,” which may signal a reversal of fortunes.
“We’re going to see prices stabilize,” said Ken Rosen, chairman at the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “It’s already happening in pockets like Silicon Valley and San Francisco. If you want to buy a house, it’s probably the best time in California in 30 years.”
MediaNews Group’s Pete Carey contributed to this report. Contact staff writer Rachel Raskin-Zrihen at (707) 553-6824 or rzrihen@timesheraldonline.com.
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�2012 Times-Herald (Vallejo, Calif.)
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