Czar Nicholas II of Russia
Car Czar Consulting says: When you’re in the middle of a economic storm, you better find some place to hunker down and ride it out if you can. If not, move to higher ground, however you might define it, in this economic tsunami.
The effect on the car business is somewhat obvious. Certainly, there’s a need to consider offering buy-here, pay-here pay plans and lower priced vehicles for this segment of the market that still needs reliable transportation. Super Sales may also offer a way to accelerate sales and profits.
If you need more “thrills” in your life, you might want to try the “Scream Ride” (see the video at the bottom of the page).
Please buckle up!
California, Vegas Home Prices Drop on Foreclosures
June 25 (Bloomberg) — Home prices throughout California and in the Las Vegas area fell from a year earlier in May as a glut of foreclosed property pushed down the value of single- family houses and condominiums.
The median price for an existing, single-family detached house in California declined 30 percent to $267,570, the California Association of Realtors said today in a statement. In the Las Vegas area, the median price for houses and condominiums fell 44 percent to $135,000, San Diego-based MDA DataQuick said in a separate statement today.
About 73 percent of all existing houses and condos sold in the Las Vegas-Paradise area were foreclosures last month, up from 56 percent a year earlier, and such sales accounted for 51 percent all existing-home transactions in California, MDA DataQuick said. Foreclosure sales represented 40 percent of California resales a year ago, the research company said.
“In California and the West and, really, a lot of the country, we have to be ready for more waves of foreclosures coming through for at least the next year,” Andrew LePage, an analyst with MDA DataQuick, said in an interview. “And no one really knows how big those waves are going to be.”
California is on target for 556,590 home sales this year, based on May’s pace of transactions, the state’s Realtors association said. That’s up from a 411,770 pace in May 2008. May’s sales were up 2.9 percent from April.{##34##}
Inventory Shrinks
The median number of days it took to sell a California house was 53.5 in May, up from 49.2 days a year earlier, the association said. The group’s unsold inventory index for existing, single-family homes was 4.2 months in May, down from 8.7 months a year earlier. The index shows the time needed to deplete the supply of homes on the market at the current sales rate.
May was the third consecutive month that the median price for California single-family homes rose from the previous month. The May median was up 4.2 percent from April, according to the Realtors group.
“Nearly all regions in the state reported positive month- to-month changes in median price,” Leslie Appleton-Young, chief economist with the California Association of Realtors, said in the group’s statement.
The median condominium price in California dropped 34 percent from a year earlier to $236,660, the Realtors association said. The median was up 5 percent from April. The number of condos sold rose 35 percent from a year earlier and 5.2 percent from April.
In the Las Vegas area, the median price has dropped on a year-over-year basis for 25 consecutive months, MDA DataQuick said. May’s median was 57 percent below the November 2006 peak of $312,000, the research company said.
MDA DataQuick, a unit of Richmond, British Columbia-based MacDonald, Dettwiler and Associates Ltd., compiles surveys using county records and supplies real estate information to customers.
SACRAMENTO, Calif., June 14, 2009
Calif. Imposes Foreclosure Moratorium
New Law Taking Effect Monday Blocks Housing Foreclosures For 90 Days
(WSJ) California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday.
The law is expected to make lenders try harder to keep borrowers in their homes. Loan companies must prove they tried to modify the delinquent loans before they can begin foreclosing.
But supporters acknowledge the California Foreclosure Prevention Act won’t stop thousands of foreclosures from eventually happening.
There have been more than 365,000 foreclosures in California since early 2007, with many more already scheduled.
The bill passed in February is similar to the Obama administration’s Making Home Affordable Program that began in March.
Both encourages lenders to cut interest rates or rewrite loans to affordable levels.
California’s Rating Cut to A- by Fitch Amid Deadlock
June 25 (Bloomberg) – California’s general-obligation credit rating was cut by Fitch Ratings as state officials struggle to close a $24 billion deficit, Fitch said in a release today.
Fitch cut the rating one level, to A- from A. The new grade is four steps away from high-risk, high-yield junk-bond status and is the seventh-highest of 10 investment grades. Fitch, which put the bonds on a negative watch, expects the state’s finances to “continue to be strained” through fiscal year beginning July 1 as revenue declines. California had $59 billion of general obligation bond debt outstanding on May 1.
If lawmakers don’t address the state’s deficit, California’s “cash will be depleted by the end of July,” Fitch said in its release. If the state balances its budget for fiscal 2010, which begins July 1, the state will still struggle with revenue 20 percent less than in the current fiscal year.
“The delay in getting a balanced budget influenced our decision,” said Douglas Offerman, an analyst with Fitch, in a telephone interview. “We don’t foresee the budget situation getting better anytime soon.”
The rating cut came a day after state controller John Chiang warned he will start paying bills with IOUs next week amid a looming cash squeeze.
Ratings can affect the interest cost of borrowing as investors demand higher yields as creditworthiness declines. Fitch’s rating reduction affects $79 billion of total debt, including general obligation economic recovery and veterans bonds, also cut to A- from A, and lease appropriation debt, which was reduced to BBB+ from A-.
California 5 percent tax-exempt bonds due in 2037 sold to a customer in a $1 million-plus block today at about 83.5 cents on the dollar to yield 6.25 percent, according to Municipal Securities Rulemaking Board trade data. That’s down from 87.3 cents and 5.93 percent on June 9.
