More warning signs on the economy , lamenting Halloween and a celebration at Chain, Cohn and Stiles law firm

 * ... A NEW  CHILL IN HOME SALES: In this dour market we're all looking for signs of hope that the economy is on the rebound, but it can be misleading (and reckless) to latch onto a headline and jump to conclusions. Take some recent housing statistics, for example, which showed improving sales and stabilizing prices, leading some to decry the rebound under way. The real truth always rests in the details, and as the New York Times noted recently, we may be looking at a new chill in home sales, not a rebound. Why? Here's a salient passage from the Times): (you can read the entire piece here):

 "Artificially low interest rates and a government tax credit are luring buyers, but both those inducements are scheduled to end. Defaults and distress sales are rising in the middle and upper price ranges. And millions of people have lost so much equity that they are locked into their homes for years, a modern variation of the Victorian debtor’s prison that is freezing a large swath of the market.
 "... The only hot sector of the real estate market has been foreclosures. Investors and first-time buyers have been competing for these, often creating bidding wars. But with the economy still weak, many analysts expect more foreclosures."

 Locally some 70 percent of our home sales come in the "distressed" category, so while that's a good thing in terms  of moving inventory, the larger threat (as the Times notes) is coming in the mid-to higher-end homes where folks with excellent credit are now getting into trouble because of job losses or simply being upside down in their mortgages. As the story noted, in California defaults are "beginning to migrate from the subprime inland areas to the more exclusive coastal region" in cities like Santa Barbara (defaults up 25 percent) and San Luis Obispo (defaults rose 46  percent). The truth is always in the details and we need to pay attention to it.

 * ... CHAINLAW CELEBRATES 75 YEARS: I stopped by the recent celebration of the 75th anniversary of the founding of the law firm of Chain, Cohn and Stiles, the plaintiff's "slip and fall" law firm formerly known as Chain-Younger. Dave Cohn, a principal in the firm and a personal friend, held the event in the outdoor, shaded annex  next to the downtown Bank of America building where the firm is headquartered. The event was catered by Lisa Borda of Bord A Petite and among those attending were Carla Musser of Chevron, former Cal State Bakersfield development officer Mike Chertok, Colleen McGauley and Teresa Fahsbender of CASA and Jim and Beverly Camp of the Camp farming families. Conspicuously absent from the soiree was Milt Younger, Cohn's uncle who was one of the founders and driving forces behind Chain-Younger for decades, who left the firm and has continued law practice with his old partner Tim Lemucchi.

 * ... SWINE FLU UPDATE: I noted here recently that the folks over at Preferred Family Physicians on Truxtun Extension had seen a spike in swine flu cases, up to as many as 20 a day. (previous post here) Dr. Raj Patel, who owns the place along with Dr. John Heidrick, told me Thursday the numbers had now declined significantly. "We don't know why but it's quite a relief," he said. "This week we've had two or three cases a day, much better than last week." Patel said it was puzzling why he had seen such a dramatic change but warned "we shouldn't celebrate" or let our guard down. Like other medical providers across town, Preferred Family has yet to receive more shipments of the swine flu vaccine.

 * ... A SCROOGE'S TAKE ON HALLOWEEN: Accepting my own Scrooge-like tendencies, I have to wonder if I am alone in dreading Halloween and the carnival-like atmosphere it creates in Bakersfield. In many neighborhoods Halloween is marked by hundreds - seems  like thousands - of strangers showing up at your door, some pushing strollers with infants and holding a sack hoping for a large Snickers. It's a never-ending stream of total strangers who leave a trail of candy wrappers up and down the street until the supply runs out. When the Californian posted a question about Halloween and out of neighborhood kids on Facebook Thursday (the question was: Should parents be driving their kids to different neighborhoods to trick or treat?), a couple of responses that caught my eye. (go to the Facebook link here) Enough said.

 "NO. Leave the van and baby in strollers (who obviously can't eat candy) and accept the neighborhood you live in."

 "The bus loads of kids is why I don't give out candy anymore. I want to see my neighborhood kids, interact with them and their parents. When I see a bus or van unload of 10 plus kids I turn off my lights."

 "Children don't get to decide which family or neighborhood they are born or live. If the neighborhood is unsafe, then by all means, visit a SAFE neighborhood. All children deserve a fun and safe night of trick-or-treating."

Lost jobs, lack of insurance and a struggling real estate market: taking the economic pulse of our community:

I don't pretend to be an economist, but I do listen when I'm out and what I'm hearing these days indicates an economic stagnation of a depth unseen in our generation. Some snippets of where we are:

* ... THE ECONOMIC CRISIS ON TRUXTUN EXTENSION: Had a chance last week to visit with Dr. Raj Patel of Preferred Family Care Physicians over off Truxtun. Patel has been our family doctor for years and I'm an unapologetic fan of his practice, which teams him with Dr. John Heidrick and office manager Teri Reyes. I was there getting my semi-annual allergy shot, and Patel shared with me that his practice is off 10-plus percent because of this economy. Why? First, many folks have simply lost their jobs and with that their health insurance. So they're gone. Second, many companies have pushed their employees to high deductible plans where the employee pays the first $2,000 or $2,500 in health care out of their own pocket. With money as tight as it is, folks simply aren't showing up at the doctor's office for every ailment. And lastly - and this was a tad surprising - Raj said even some folks with insurance are delaying visits because they are so strapped for cash. The result: fewer people in the waiting room and no doubt some folks who should be there are not. (Patel is third from right in this group photo taken when Preferred Family was honored by the Red Cross as one of our community heroes last year)



* ... VIEW FROM A CUSTOM BUILDER: Got a nice email from Dave Turner, owner of Turner Custom Homes, giving me his take on the real estate market. Dave is one of the high-end builders who has been sucker-punched by this downturn. I had cited Dave in an earlier post (read it here) and he wanted to clarify a few points. In his words:
a)The upturn in new home construction is mild, and mostly in the entry level due to the stimulus.
b) The market locally seems in balance between buyers and sellers, which should stabilize prices somewhat. The foreclosures may keep values down for quite a while, but banks seem to be metering out their REO’s (Real Estate Owned, i.e. foreclosures) so they don’t flood the market and push prices lower;
c)The study I cited from San Diego was from a builder publication noting that the head of the Dept. of Real Estate at a San Diego university (don’t recall which) predicted that values in the San Diego market would not return to 2005 levels until 2016. Real estate is local, and what is true elsewhere may or may not be true in Bakersfield. I cited it only as an indicator of what we might expect “value-wise.” I don’t expect our activity level will ever get back to where we were during the giddy days.
d)Regarding the higher-end, I don’t think I mentioned a National Assn. of Home Builders publication that predicted the higher-end market won’t return until 2012. Again, that is a national prediction, and may or may not be true here – just another indicator.

* ... LOCAL BOY PUNTING FOR THE HUSKIES: It was good to see Will Mahan, a product of Bakersfield High School and Bakersfield College, on the field and doing well as a punter for the University of Washington Huskies this weekend. Thanks to retired endodontist Dr. Bob Smith, himself a Driller dad, for pointing this out to me.