"Chinatown" all over again...Badlands Journal editorial board
On June 6, 2008, Badlands Journal editors wrote an article comparing the 1974 movie classic, "Chinatown," with the campaign against the ecology of the Delta and for a peripheral canal and more dams fomented by Westlands Water District, finance, insurance and real estate interests and the Hun, our governor. At the time we were taking a measure of the rhetoric being used to frighten residents of the state already made anxious by the collapse of the speculative real estate bubble. This week, the California Sportsfishing Protection Alliance (CSPA) has discovered an internal Westlands memo showing that all the time last year that Westlands was crying DROUGHT!, it was storing hundreds of thousands of acre-feet of water, just as LA was – as was observed by the San Francisco Chronicle's veteran outdoors reporter, Tom Stienstra, on October 26, 2008. The Westlands memo is only the most recent evidence that begs the lie behind the high-priced propaganda campaign for a peripheral canal and new reservoirs on the San Joaquin River and in Colusa County.
Gov. Schwarzenegger is calling the year's lack of rain and snowfall a drought of epic proportions and points to the low lake levels to prove it. The answer, he says, is passing a $9.3 billion water bond next year to build a peripheral canal and several new reservoirs in a program designed to send more water to points south.
The facts are that the past two years are only the ninth driest two-year period in the past 88 years, and that California routinely experiences such periods once every 10 years, according to the Department of Water Resources.
What happened last year is that water managers were betting on a wet spring. When it didn't happen, many lakes were drained down to nothing in order to send water to L.A. and farmers.
Shastina, tucked on the north slopes of Mount Shasta, is a testament to this bad bet. In the past two summers, water was drained from the lake to irrigate hay fields in the Shasta Valley as if there was no end in sight to the water available. The lake hit bottom last month. So when you drive up to the boat ramp, all you can see is exposed lakebed. This isn't a drought. This is a created shortage.
True droughts are measured by soil moisture, and in some cases, water levels at wilderness lakes. In a true drought, soil moisture is so low that plants go into artificial hibernation to protect themselves, as in 1992, and that has not happened. Up in the high country, most wilderness lakes - outside the reach of water-grabbers - are full. Even more telling is that along Interstate 5 near L.A., Pyramid Lake, which gets water from Northern California, is 97 percent full right now. -- San Francisco Chronicle, "Drought, or water heist?", October 26, 2008
The campaign for more dams and a peripheral canal built up steam going into the Senate approval of the San Joaquin River Settlement, which, after three years of obstruction by Valley congressmen, was finally approved on January 15, 2009. This year we have been plagued by an aggressive astroturfing operation, the Latino Water Coalition, guided by the international PR firm, Burston-Marsteller (see details at the indispensable Chronicles of the Hydraulic Brotherhood/lloydgcarter.com, "The PR Firm from Hell," and "Thirsty Down in Nobama County").
All the while, Westlands Water District has been hording water in private while screaming drought and destruction in public.
Although there is a drought, it is relatively mild compared to others we've had in the last 30 years. But there has been a campaign going on for several years to get another $10-15 billion bond to build the canal and the dams. In "Chinatown," the private investigator discovers that LA Department of Water and Power has been hording water and releasing it around the county in the middle of the night while claiming there was a"drought," in fact manufactured for a real estate scam.
The contemporary "Chinatown" campaign stumbles blindly forward every day:
Sen. Dave Cogdill, R-Modesto, vice chair of the Senate Natural Resources and Water Committee, expressed frustration over missed chances at approving a water bond in recent years.
"All we continue to do is talk, and meet, and submit bills, and argue over them and get absolutely nowhere," Cogdill said. "And the problem isn't going away, it's not on hold. And today, as we speak, there are people in this state who are suffering because of our inefficient and inadequate water system." -- Capital Press, August 20,2009
Westlands Hoards Surplus Water While Farmworkers Suffer...Dan Bacher
The California Sportfishing Protection Alliance (CSPA) today called for an investigation into the hoarding of surplus water by the Westlands Water District while farm workers on the west side of the San JoaquinValley are struggling to pay their bills and put food on their table.
Over the past several months, the mainstream media and right wing demagogues such as Sean Hannity have reported "heart rendering" stories about the Westlands Water District having to fallow fields, putting farmworkers out of work and placing farms in jeopardy because of a lack of water.
Today the California Sportfishing Protection Alliance District (CSPA) countered the lies behind Westlands' cynical astroturfing campaign by revealing that the district has been "squirreling away" surplus water it can't use.
CSPA has discovered a Westlands' information bulletin dated 23 July 2009 revealing that the giant irrigation district, considered the "Darth Vader" of California water politics by fishing groups, Indian Tribes and environmental organizations, has been hiding considerable carryover storage from last year and is adding even more this year. The group is calling for an investigation into Westlands' surplus water and possible surplus water hidden away by other water districts.
“The idea that Westlands Water District has been hoarding surplus water it can't use while farm workers have been paid to hold vocal protests around the Central Valley accusing Congressman George Miller and federal agencies of starving farmers in order to protect Delta smelt is outrageous," said Bill Jennings, CSPA executive director. “Perhaps Congressmen Devin Nunes and Dennis Cardoza can use their influence to persuade Westlands to share some of their stored water wealth to benefit those less fortunate. Clearly an investigation is needed to see who else might be hoarding surplus water.”
At the end of 2008, Westlands had some 233,998 acre-feet (AF) of water stored in other facilities that it didn't need, according to Jennings. Some 93,700 AF of that stored water was used through June 2009. However, the export pumping restrictions caused by the Delta Smelt Biological Opinion ended 30 June and the State and Federal Projects have ramped up pumping.
Westlands has made firm commitments to acquire 141,522 AF of supplemental water and is requesting additional supplies. Consequently, Westlands staff projects that the District will end the water year with approximately 275,000 AF of water it is unable to use.
The disclosure of the hoarding of water by Westlands occurs as the water district and its front group, the Latino Water Coalition, has been campaigning to give a "human face" to corporate agribusiness by busing hundreds of farmworkers to "rallies" and "marches" in Fresno, Sacramento and Concord demanding increased pumping of water from the Delta. However, no farmworker organizations, including the United Farmworkers are supporting these efforts, organized by the public relations firm Burston-Marsteller, notorious for campaigns to cast a "democratic" image to dictatorships around the world for decades, and numerous corporate greenwashing campaigns.
Arturo Rodriguez, president of the United Farm Workers of America, the 27,000-member union founded by Cesar Chavez, blasted the Latino Water Coalition's so-called "March for Water" this April for being an event organized by corporate agribusiness.
"In reality, this is not a farm worker march, '' Rodriguez told the New Work Times on April 17. ''This is a farmer march orchestrated and financed by growers.''
The bulletin also points out that the Banks pumping plant of the State Water Project has been pumping about 1,000 AF of Central Valley Project daily. "Of course use of the 'Joint Point of Diversion' (JPOD) is illegal and violates D-1641, the State Water Resource Control Board's (State Board) order implementing the Bay-Delta Plan. D-1641 explicitly prohibits use of JPOD when south Delta salinity standards are being violated," noted Jennings.
Presently the running 30-day average for electrical conductivity, the measure of salinity, at Old River near Tracy is 1.02 umhos/cm. The water quality standard for this period is 0.7 umhos/cm to protect Delta agriculture. South Delta salinity standards have been continually violated the last seven months, imperiling Delta fish populations and Delta farms.
Jennings said the U.S. Bureau of Reclamation (USBR) and California Department of Water Resources (DWR) have been ignoring the Cease & Desist Order issued by the State Board in 2006 for violation of south Delta salinity standards. Recently, they requested an extension of the compliance schedule for that Cease & Desist Order beyond the 1 July 2009 deadline.
CSPA was a party in the June 2009 State Board evidentiary hearing regarding the DWR/USBR request. Even though the State Board declared in 2006 they would not again extend the compliance schedule, they are expected to shortly issue a decision extending the schedule and excusing past violations. CSPA is prepared to sue over the Board's continued refusal to enforce the Cease & Desist Order. However, the prohibition against using JPOD while standards are violated was neither raised nor discussed in that hearing.
"Earlier this year, the State Board held hearings to consider a relaxation of Delta outflow standards because they were being violated," Jennings state. "While April rains eliminated the need for relaxed standards, the Board refused to penalize the USBR and DWR for violating existing standards. In June, the USBR acknowledged that Vernalis flows were only about 59% of required flow. Again, the State Board took no action. Water quality standards in the southern Delta have been consistently exceeded since last December."
Jennings observed that, “the State Board continues to look the other way as virtually all of the standards protecting the Delta and its collapsing fisheries are ignored and DWR and USBR violate the law in order to supply Westlands with water they can't use.”
"CSPA remains concerned about the plight of unemployed farm workers, even as we note that data from the California Economic Development Department and annual reports from County Agricultural Commissioners reveal that both farm labor employment and the value of agricultural production has increased in the seven south-of-Delta counties over the course of the drought," emphasized Jennings.
WESTLANDS WATER DISTRICT
3130 N. Fresno Street, P.O. Box 6056, Fresno, California, 93703-6056
(559) 224-1523 FAX (559) 241-6277
July 23, 2009
This notice contains important information about the following:
· July 21 Board Report
· Biweekly Conference Call Regarding Water Supply and Operations
· Water Supply Update
· Supplemental Water Supply Update
· Surplus Vehicles and Equipment for Sale
July 21 Board Report
Biweekly Conference Call Regarding Water Supply and Operations
General Manager Tom Birmingham has begun holding a biweekly conference call on
Thursday at 8:00 a.m. to inform landowners and water users of developments regarding water supply and operations. To have your name placed on the participant list to receive call-in instructions, please contact Sarah Woolf at (559) 341-0174.
For those unable to call-in, the operations report provided during the call will be posted
on the District’s website,
www.westlandswater.org org, at the Water & Power – Water Supply –
Project Operations tab, no later than the following day.
Water Supply Update
, Water users’ demand for surface water have been at historic lows this year; 93,700 acre-feet of the 233,998 acre-feet rescheduled from 2008 have been used through June. Staff projects that the District will end the water year with approximately 275,000 acre-feet unused. This unused water will consist of the 2009 CVP allocation and 2009 District Supplemental Water purchases.
Approximately 60,000 acre-feet of non-Project Supplemental Water will be stored under Warren Act Contracts, while the balance will be stored under the Bureau of Reclamation’s CVP rescheduling guidelines. The District expects Reclamation to issue these guidelines around August 1, and water users will be notified when they are available for review.
The restricted pumping period under the Delta Smelt Biological Opinion ended June 30, and Jones Pumping Plant increased exports, which totaled 108,000 acre-feet as of July 15. Further, on July 9 the State received authorization to increase pumping capacity at Banks Pumping Plant by 500 cfs, up to 7,180 cfs. Since then, Banks has been pumping CVP water at a rate of about 1,000 acre-feet per day. Federal storage at San Luis Reservoir briefly went negative earlier this month, but has recovered to 2,000 acre-feet as of July 21. Total storage in San Luis is currently about 380,000 acre-feet.
Ex-Merced County D.A. Spencer disciplined by state Bar Court
Spencer is barred from practicing law for 30 days....JONAH OWEN LAMB
The former district attorney of Merced County, Gordon Spencer, will be barred from practicing law in California for 30 days starting Sept. 14 because of an ethical breach, according to State Bar Court filings.
Spencer was officially disciplined by the state Bar Court Jan. 13 for improper conduct while in office. The state Supreme Court later issued a disciplinary order, which put his punishment -- suspension -- into effect.
Spencer stepped down from office in 2007 after revelations surfaced of ethically troubling conduct, including impersonating a district attorney investigator, serving alcohol to a minor and the inappropriate use of a county vehicle.
Originally scheduled for a 30-day suspension starting Aug. 13, Spencer filed a request with the state Supreme Court to postpone his suspension for a month. That request was granted on Aug. 13, according to the State Bar Association.
The former district attorney was disciplined by the State Bar specifically for actions that took place in 2005. At the time Spencer was still the district attorney and called a cabinetmaker with whom his son, Nathan Spencer, was in a dispute. Spencer impersonated district attorney investigator Albert Flores in the call, according to bar filings.
In an interview with Spencer in February, he said that despite his suspension, the state bar and the attorney general's office were unable to prove he did anything other than impersonate someone. That was all they could come up with, he said. "I'm gratified professional investigators from both the state bar and attorney general checked out every allegation, and this is all the state bar is left with," he said.
In a separate settlement that ended an Attorney General's office criminal investigation, Spencer paid more than $26,000 to the county for inappropriate use of a county vehicle.
Spencer couldn't be reached for comment to explain why he asked to postpone his suspension.
Soon after the state Bar Association's disciplinary ruling in January, the association's supervising trial counsel, Donald Steedman, said the discipline was appropriate. "We thought the misconduct was serious, and we agreed to a discipline that reflected the seriousness of that conduct," he said.
Gripes rain down at Clovis town hall on health care
Visalia Republican gets a packed school auditorium...JOHN ELLIS, The Fresno Bee
CLOVIS -- Rep. Devin Nunes had planned an informational meeting Thursday morning to explain health care legislation pending on Congress. What he got instead was a massive gripe session.
Among the crowd of around 225 who packed a Clovis East High auditorium were doctors, nurses, pharmacists, health care professionals, business owners, farmers and everyday people.
There were those who were clearly from the political left.
More leaned to the right. A few had questions, but many more preferred to give their opinions. Few seemed happy.
Nunes, a Visalia Republican, called the meeting to walk people through HR 3200, which he says is the most likely bill to emerge from the Democrat-controlled House of Representatives as President Barack Obama and Democratic leaders push for an overhaul of the nation's health care system.
Nunes had broken down the 1,000-page bill into eight parts, but the rapid-fire Power Point presentation served mostly as a quick break between long interludes highlighted by long statements from people in attendance.
Unlike other health care forums held across the nation, Nunes' was far more tame, with virtually no outbursts and only one incident of a person talking over another.
One reason may have been the political makeup of the crowd, a clear majority of whom were Republican and in agreement with Nunes, who made it clear that he opposes the current legislation.
Loose Lips: Town hall troubles
Rep. Dennis Cardoza, D-Maryland/Merced, may not be holding town hall meetings, but that hasn't kept some local politicos from convening to discuss the congressman's performance.
The grade? D-isappointed.
Sources tell Lips a meeting of frustrated farmers met with a political consultant in a Modesto hotel to discuss challenging Cardoza. Just this past week, another meeting of Merced business leaders was called to discuss Cardoza's standing.
Names were floated around of who could be the next rep -- Republican or Democratic. Obvious ones include state Sen. Jeff Denham, R-Merced, or Assemblywoman Cathleen Galgiani, D-Livingston. Both of them have their sights set on other offices.
The sense is that Cardoza's no longer connected to the area and its issues, said one person at the meeting, who didn't wish to be named.
Another person noted that plenty of other people are disappointed with Cardoza for not holding town halls to discuss health care or other pressing national issues. None of them would go on-the-record with Lips.
Cardoza has pointed to his telephone town halls as a viable alternative to in-person meetings because he can reach far more people, as many as 4,000 at a time.
Too bad Norman Rockwell's not around to paint another version of "Freedom of Speech." Rather than a man standing up for what he believes, it could show a voter -- living in a neighborhood surrounded by foreclosures -- holding a phone to his ear, talking to his elected official living thousands of miles away. Lips would hope Cardoza would have freedom from fear.
Letter: Cardoza's family...DIANA HELLER, Merced
Editor: As the godparents of two of Rep. Dennis Cardoza's children we feel that it is necessary to express our feelings concerning the question of his residence.
For his first six years in office, Dennis traveled back and forth almost every weekend to be with his young family here in town.
He and his wife Kathie made the decision early on not to disrupt their children's schooling by staying in the family home and attending local public schools.
As the two older children entered high school, it became apparent that it would be best for the family to be together full time.
Accordingly, Dennis moved his family back to the Washington, D.C., area as the majority of the other legislators with children from the West have traditionally done. Now, Dennis is able to dedicate his time completely to the needs of his district while he is here.
Dennis has been a member of this community for more than 40 years. He is a former business owner and knows the needs of his district. He has not lost that knowledge and experience.
We are fortunate to have such a dedicated public servant, and he deserves credit for not only representing us and our needs but also supporting his family.
Letter: We need debate...JOCELYN THELEN, Merced
Editor: Dear Rep. Dennis Cardoza, "The First Amendment's function is to create the uninhibited, robust and wide-open public debate necessary for the exercise of self-governance." (112 Yale Law Journal 2415 (2003)).
In that spirit, we citizens of your district request a meeting with you in person. Though Sen. Claire McCaskill, D-Mo., just successfully navigated a town hall meeting, we understand you intend to join those Congress members who abandon personal contact with constituents at this crucial moment.
However, it's times like these that true leadership presents itself.
After declaring a new era of transparency, this administration has rushed bill after bill past the American people.
Now our health-care system is threatened by an unprecedented and intrusive government takeover. We fail to see how avoiding your constituents provides the information and contact we need. During this pivotal moment we deserve to hear directly from you and you from us.
(This letter was sent with 128 signatures attached)
Thursday, reader Kent Amberson wrote that he wanted people interested in starting a citizen's watchdog group to monitor the voting records of elected officials. His phone number is (209) 358-6854.
Letter: Sounds of silence...JACK MOBLEY, Merced
Editor: Rep. Dennis Cardoza, your silence is deafening.
Your constituents want to hear your views and the justification for your votes from you ... in person. You were elected on the promise that you are our congressman and cared about the Valley and us. Really? Where are you? Why won't you talk to us?
Your office says you have no plans to have town hall meetings on the historic legislation pending in Congress.
We deserve to be able to look you in the eye before you vote on the health-care bill.
Letter: New congressman...TOM HUFTY, Merced
Editor: I am seeking an individual to become a U.S. congressman or congresswoman.
This job pays $174,000, has many benefits including full retirement vested after only five years, and a health-care system that is the envy of the world, and only available to a select few.
It involves fully paid travel with stipends for meals, housing and other incidentals. This job includes a large staff, multiple offices and access to the national news media.
There are also many other fine benefits too numerous to mention.
I seek an individual who is honest, of average intelligence or higher and who has the ability to do the right thing for his or her constituents in the face of party pressure.
The individual selected to fill this position must make themselves available to listen to their constituents.
The applicant works for and is responsible to the citizens of this district, has no other bosses and can be removed at any time for failure to uphold the responsibilities of this position -- two-year probation.
Letter: Genuine concerns...DONNA BEARDSLEY, Merced
Editor: I have genuine concern about President Obama's proposed health reform just as I have concern about his many other proposals.
It is inaccurate to claim that those asking questions at town meetings are all members of some unidentified political movement intent on hindering Obama's progress. The audiences at these events represent cross sections of Americans who are afraid of increased taxation, legislation and indebtedness.
They are not an "astroturf" movement, as House Speaker Nancy Pelosi quipped, implying that any fiscally conservative group could not possibly be genuinely grassroots.
If our representative had a town meeting, I would be attending to find out just what this bill will do in actual practice. Having read portions of the bill, I have no assurance that it would "be paid for without adding significantly to the nation's deficit," a claim made by Obama.
These sorts of questions need to be asked. What if the program does require a significant influx of money? Where will this money come from? Those expressing concern are not necessarily out to "scare and mislead the people." They could just be asking sensible questions.
Too bad we have no forum available in Merced County.
13% late, on path to losing home...Alan Zibel, The Associated Press. Bee staff writer J.N. Sbranti and Associated Press writer Christopher S. Rugaber contributed to this report.
WASHINGTON — With the recession throwing thousands of people out of work daily, more than 13 percent of U.S. homeowners with a mortgage have fallen behind on their payments or are in foreclosure.
The record-high numbers published Thursday by the Mortgage Bankers Association are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis.
As of June, more than 4 percent of all borrowers were in foreclosure, and about 9 percent had missed at least one payment.
The percentage of homeowners in serious mortgage trouble is twice as high in the Northern San Joaquin Valley as elsewhere in the nation.
In Stanislaus County, 14.3 percent of homeowners with mortgages are three months or more behind on payments. Nationally, 6.7 percent of mortgages are that delinquent, according to First American CoreLogic statistics.
It's worse in Merced County, where 17.9 percent are three months delinquent. In San Joaquin County, 15 percent are that late.
A big part of the valley's foreclosure crisis stems from crashing home values and soaring unemployment.
About two-thirds of the valley's homeowners with mortgages owe more on their loans than their homes are worth, according to First American. Compared with the nation as a whole, the valley's homeowners are twice as likely to be "underwater" on their loans.
Unemployment, meanwhile, was 16.6 percent in Stanislaus, 15.5 percent in San Joaquin and 17.6 percent in Merced during June.
As banks unload foreclosed properties at deep discounts, they are attracting buyers back to the market. Today, the National Association of Realtors will release July home sales data, and economists expect it to show the fourth-straight monthly sales increase.
While there have been signs that prices are stabilizing, some economists say that's a temporary respite. "We don't think we've seen a bottom yet in home prices because of the foreclosure problem," said Michelle Meyer, an economist with Barclays Capital.
The worst of the trouble remains concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.
Loan delinquencies among borrowers with prime, fixed-rate mortgages grew from the first quarter to the second in all 50 states, with the biggest jumps in Wisconsin, Illinois, Utah and West Virginia.
Jobless rate falls in Fresno, Kings Cos.…Tim Sheehan
Unemployment rates fell last month in Fresno and Kings counties, but rose in Merced and Tulare counties.
Fresno County's jobless rate in July was 15%, down from 15.3% in June, according to figures released today by the state Employment Development Department. The rate fell despite a drop in the number of people working because the estimated labor force in the county also shrank.
In Kings County, the unemployment rate fell to 14.5%, down from 15.4% in June. Madera County's unemployment rate held steady at 13.9%, unchanged from June.
But in Merced County, the rate ticked up to 17.6% compared to 17.4% in June, while Tulare County's jobless rate climbed to 15.3%, up from June's figure of 14.7%.
California's statewide unemployment rate was up for the month, climbing to 11.9%, compared to 11.6% in June. The state jobless rate is estimated from a federal survey of 5,500 California households, while the county employment figures are based on a statewide survey of 42,000 businesses to measure jobs in the economy.
Health goal set for chromium in California drinking water...Susan Ferriss
More than five years after a state deadline, California officials released an initial public health goal Thursday for how much of the carcinogenic chemical chromium 6 can exist in drinking water without significant health risk.
A public health goal is a step toward setting a drinking water standard. The next step includes a period of public comment.
"This draft public health goal document is the first in the nation that identifies a health-protective level of chromium 6 in drinking water," said Joan Denton, director of the California Office of Environmental Health Hazard Assessment, in a news release.
Chromium 6 is a heavy industrial metal also known as hexavalent chromium, or more popularly as the "Erin Brockovich chemical."
Brockovich was a legal aide featured in a Hollywood movie who exposed how drinking water in the southern California city of Hinkley had been tainted with chromium 6.
Well testing has found chromium 6 to be pervasive in California, with high levels in some wells – not necessarily active drinking wells – in many major cities. The city of Davis and UC Davis also have found high levels in wells.
The draft public health goal for chromium 6 is 0.06 parts per billion. A public health goal is reached after rigorous study, which in this case found that the substance caused tumors in mice ingesting it in water.
The draft goal is based on an estimate that for every 1 million people who drink two liters of water with that level daily for 70 years, one person would be expected to develop cancer.
Drinking water containing levels exceeding a public health goal can still be considered acceptable for public consumption, according to the news release.
California currently has a drinking water standard for what's called total chromium. But after the Hinkley problem was exposed, the Legislature ordered that a standard also be set for chromium 6 by January 2004.
A drinking water standard does not have to be as strict as a public health goal, but by law it is supposed to be as close as feasible. Chromium 6 can be removed through treatment.
California unemployment: 11.9 percent...Jim Wasserman, Dale Kasler...Home Front
California's unemployment rate continued climbing to 11.9 percent last month but there was encouraging news as the pace of job losses moderated.
The Employment Development Department said the state's unemployment rate jumped three-tenths of a percentage point during the month. But the state lost just 35,800 jobs during the month. That's the smallest loss in months and may suggest an easing of the downturn. The state has been losing at least 60,000 jobs a month for the past several months.
Sacramento's unemployment rate rose to 11.8 percent, up a tenth of a point from a revised 11.7 percent in June. The region lost 8,000 jobs during the month, with much of the job loss coming in education as summer schedules kicked in. In a year's time, the region has lost 45,700 jobs, or 5.1 percent, and unemployment has risen 4.6 percentage points.
California was tied with Oregon for the fourth-highest unemployment rate in the nation. Michigan was No. 1 at 15 percent, followed by Rhode Island (12.7 percent) and Nevada (12.5 percent).
The news came amid further signs of easing of the national recession. The stock market soared after the National Association of Realtors announced better-than-expected home sales for July and Federal Reserve Chairman Ben Bernanke said the economy is about to begin a recovery.
Home Front: Prime borrowers become new focus of foreclosure crisis...Jim Wasserman
There once was a time in Sacramento when well-educated people had two good jobs per household, a safe fixed-rate mortgage, and easy assurances that the mortgage crisis was someone else's problem.
Not so much now in 2009.
Suddenly, these are the new people in trouble as 11.6 percent unemployment and 14 percent wage cuts across state government take a toll. Their prime fixed-rate 30-year loans – the benchmark of responsibility and reliability, the sign of a college degree with the same payment every month year in and out – are buckling under pressures of a nasty economy.
Sacramento-area lenders, loan counselors and credit attorneys say they've seen it for months as thousands get pink slips, which ripples outward into lost earnings for area business owners. Thursday, the Mortgage Bankers Association spotlighted the trend nationally, saying "prime fixed-rate loans account now for one in three foreclosure starts."
The old subprime adjustable-rate loan problem that started the crisis in 2007 continued to wane in 43 states in April, May and June, the MBA said. But the new prime fixed-rate problem rose in 41 states, including California.
"This is further confirmation of what we've seen in the past year, one that's increasingly driven by fundamental issues in the economy," MBA Chief Economist Jay Brinkmann told reporters during a conference call. Brinkmann has long said that early-recession layoffs hit renters first, many in construction. Then it hit manufacturing-dependent homeowners. Now, it's moved up the food chain to the professions with good educations and prime-rate "safe" loans.
The MBA doesn't provide region-specific numbers. But California has 3.3 million prime fixed-rate loans. They are 56 percent of mortgages in California. In the second quarter, 4.64 percent were delinquent to some degree. That's up from 3.95 percent the first quarter, and more than double the delinquencies of the same time in 2008. Nationally, it's worse – at 5.23 percent.
As a percentage, this may not sound like much. But it's adding to the pileup of two years of foreclosures – 43,000 in the capital region so far. It's contributing to falling values, even in higher-value neighborhoods financed with prime mortgages. Falling values block refinancing options and lead to more foreclosures, widening the circle of economic distress.
Brinkmann said delinquencies related to job losses put lenders at a tremendous disadvantage for solutions. Many people, even with prime loans, have financed homes to the edge of their two incomes. When one of those vital jobs is gone it's difficult, he said, to restructure a mortgage.
The economist said he expects unemployment nationally to peak in mid-2010 and prime delinquencies with it. Sacramento may have longer to contend with prime pressures as state government follows the other pillar of the regional economy – real estate and construction – into an apparent prolonged contraction.
What rebound? Foreclosures rise as jobs and income drop...Kevin G. Hall, McClatchy Newspapers
WASHINGTON — Delinquency and foreclosure rates for U.S. mortgages continued to rise in the second quarter, with loans to the most qualified borrowers going bust at an unnerving clip, especially in hard-hit states such as Florida and California.
The numbers reported Thursday by the Mortgage Bankers Association show clearly that rising job losses are worsening the nation's housing troubles and threaten the Obama administration's efforts to keep owners from losing their homes.
The quarterly National Delinquency Survey showed that almost one in 10 homeowners with a mortgage was at least one payment late, and thus delinquent, while another 4 percent had entered the foreclosure process on their loan.
Nowhere is there less sunshine in this picture than Florida. The survey found that from April to June, 12 percent of all Florida mortgages were in the foreclosure process and about 23 percent of all Florida mortgages_ almost one in four_ were late on payments or under threat of foreclosure.
In California, 10.8 percent of all mortgages were 90 days or more past due or in foreclosure. While the Golden State accounts for 13.3 percent of U.S. mortgages, it's also the site of almost 20 percent of foreclosure starts from April to June.
More worrisome is a trend emerging deeper in the numbers: Subprime loans given to the weakest borrowers are now a declining portion of delinquency and foreclosure rates, while prime loans, given to the most highly qualified borrowers, are a rising share.
"The rise in prime delinquencies . . . is a clear indication that employment is the driver of mortgage performance, with the worst performance coming in those areas that are combining jobs losses with large drops in home values like California and Florida," Jay Brinkmann, the group's chief economist, told McClatchy. "We won't see a turnaround in delinquencies until we see improvements in employment, most likely the middle of next year."
Forty-one states notched a rise in their foreclosure rate for prime fixed-rate mortgages in the second quarter, and prime fixed-rate loans accounted for one in three foreclosure starts. A year ago they were one in five starts.
Prime fixed-rate loans are 65 percent of all U.S. mortgages outstanding, but more than 32 percent of foreclosure starts from April to June. They also constitute 27 percent of all U.S. loans now in foreclosure, up from 17 percent in the comparable 2008 period.
The rising delinquency and foreclosure rate for prime loans creates new problems for the Obama administration, which inherited a complicated housing situation.
The administration has unveiled a number of incentives for lenders and mortgage servicers, who collect mortgage payments on behalf of investors, to modify distressed mortgages by refinancing into lower rates or lowering monthly payments.
The Making Home Affordable effort, however, is geared toward borrowers who have jobs and income. The increased rate of delinquency and foreclosure on prime fixed-rate loans reflects massive job losses occurring nationwide. Workers losing jobs won't qualify for housing help.
"The reason people are defaulting on these (loans) is they simply don't have income, and there aren't any loan modification programs for someone who does not have income," said Rick Sharga, the vice president of the Irvine, Calif., firm RealtyTrac, which specializes in foreclosure research.
The trend will grow worse.
"The rising levels of unemployment will probably, over the next nine to 12 months, become the primary impetus for foreclosure activity," Sharga said. "That's the wave that is just starting to hit and we're just starting to see the problems now."
There was more bad news on the employment front Thursday, with the Labor Department reporting for a second consecutive week an unexpected rise in initial jobless claims. The 576,000 claims last week, following 561,000 the week before, likely sets up a bad employment report for August after a July reprieve.
The unemployment rate stood at 9.4 percent in July but is expected to peak above 10 percent. That means more foreclosures, which will put a drag on recovery.
"It will definitely slow down the housing market a bit, which will have a corollary effect on the overall economy coming back" to life, Sharga said.
Trinitas owner vows golf will go on
Despite Calaveras votes, he says course to stay open...Dana M. Nichols
SAN ANDREAS - The owner of the Trinitas Golf Course south of Wallace vowed Thursday to keep golfing after the Calaveras County Planning Commission upheld a county ban on the sport on agricultural land.
Planning commissioners and county planning staff noted that daily commercial golfing has continued on the 280-acre site on Ospital Road since May 5, when the Calaveras County Board of Supervisors rejected a proposal to legalize the business by changing the land's zoning from agricultural preserve to recreation.
"The property is being used illegally based on the decision by the Board of Supervisors," said Suzanne Kuehl, chairwoman of the commission.
The commission rejected an appeal by Trinitas owners Michael and Michelle Nemee of the county's ban on golf on agricultural land. It then voted to uphold an appeal by a group of neighbors known as Keep It Rural Calaveras who opposed a county official's determination that the golf course could be considered "landscaping" and allowed to remain in place as long as it wasn't actually used as a golf course.
Both votes were 4-1, with Commissioner Steve Kearney opposed.
Kearney said he believes the commission has within its power to interpret the county's zoning laws so as to allow golf as a form of "agritourism," similar to what might happen if a farmer set up a "volleyball net" or "archery range" on his or her property.
That argument also was made by Christine Griffith, the attorney who spoke on behalf of the Nemees at the Planning Commission hearing. Griffith said the Nemees are primarily olive growers and that the golf course is a secondary use that generates money to support the farm operation.
Nemee himself vowed after the commission's vote to continue golfing and olive growing.
"We are going to continue operating our lawful agritourism operation that we've been taxed on since 2005 by the county of Calaveras," Nemee said.
The Trinitas project for years has sparked conflict over the fate of the western edge of Calaveras County. Opponents see it as an effort to lift protections on agricultural land and open the area to intensive development. Trinitas supporters say it is a much-needed economic boost.
Two former county officials - ex-Supervisor Victoria Erickson and former Chief Building Official Ray Waller - spoke in favor of Trinitas at Thursday's hearing, saying that in the years before 2005, when the golf course was built, county officials believed it was legal.
Critics point to documents showing that the Nemees were warned multiple times that a golf course was not legal in an agricultural preserve. When construction began, the Nemees were receiving a Williamson Act tax break that is intended to serve as an incentive to keep land in agricultural production.
The Trinitas tax break was among the problems noted when the California Department of Conservation in 2007 audited Calaveras County's compliance with the Williamson Act.
The commission voted to reject an appeal by the Central Sierra Environmental Resource Center.
Among other things, that appeal objected to the county's position that Trinitas wouldn't be removed if it was not being used. Since the Nemees continue to use the golf course, that stance is now moot.
George White, director of the Planning Department, said that code abatement work is under way. He referred questions about the next step in that abatement to Jeff White, no relation, who is director of the Building Department and who oversees code enforcement.
Jeff White did not immediately respond Thursday afternoon to inquiries.
San Francisco Chronicle
Vegas water planners say keep working on pipeline...AP
Las Vegas, NV (AP) -- Regional water planners voted Thursday to continue work on a massive water project to tap groundwater in eastern Nevada and pipe it to Las Vegas.
The unanimous confidence vote by the Southern Nevada Water Authority board came after four hours of testimony in a crowded meeting room pitting proponents who call the pipeline essential to the future of a growing region against opponents who call it too costly. They call for controlled growth instead.
The decision did not represent final approval for the pipeline, which is projected to cost $3.5 billion and would relieve the region's reliance on the drought-stricken Lake Mead reservoir on the Colorado River. The pipeline plan still needs federal permits and environmental clearances.
The SNWA vote came the same day a newspaper poll reported that about half of southern Nevada residents who said they regularly vote in state elections favored continuing plans for the pipeline.
But in rural parts of the state, support was just 13 percent, according to the telephone survey conducted statewide Monday and Tuesday for the Las Vegas Review-Journal.
Fifty-two percent of respondents in Clark County, which includes Las Vegas, said they remained behind the plan.
However, the survey of 400 Nevadans by Washington, D.C.- based Mason-Dixon Polling & Research Inc. had a sampling error margin of plus or minus 6 percentage points for Clark County and 9 percentage points for the rest of the state, pollster Brad Coker said. Statewide, the margins were 5 percent.
"The fairest thing to say is the state is pretty much split," Coker said.
The pipeline would stretch to the Snake River Valley in White Pine County, more than 250 miles north of Las Vegas along the Utah state line, and tap other aquifers in other counties. Officials say it could supply enough water for almost 270,000 homes.
With Utah residents and officials concerned about the amount of water that would be drawn from an underground aquifer straddling the border, the two states recently reached a draft agreement to wait until at least 2019 to start pumping.
In Nevada, 26 percent of residents polled said they were undecided about the project. Just 19 percent in Clark County said they were undecided.
The pipeline project was initially proposed to supply water for the rapidly growing region. Now, water authority officials warn that without a secondary source, the region could face water shortages due to a reliance on the drought-stricken Colorado River.
The Las Vegas area draws about 90 percent of its drinking water from the Lake Mead reservoir behind Hoover Dam, which has seen water levels fall more than 100 feet during the past decade, leaving a white mineral "bathtub ring" on lakeside rocks.
If the reservoir drops another 19 feet, Nevada and Arizona will be forced to reduce the water they take from the river. More severe cuts could follow.
University leader warns of more steep budget cuts...SAMANTHA YOUNG, Associated Press Writer
Sacramento, Calif. (AP) -- University of California President Mark Yudof warned Thursday that more budget cuts were in store for the 10-campus system when federal stimulus money runs out next year.
Yudof predicted there would be about $600 million less to run one of the country's largest university systems.
"When the stimulus package disappears next year, that's when our budget will go back into the hole again," he said during a speech to the Sacramento Press Club.
State lawmakers in July slashed nearly $3 billion from California's 110 community colleges, the 23-campus California State University and the 10-campus University of California systems.
In response, the UC system, which has about 222,000 students, raised student fees by 9 percent, reduced freshman enrollment by 6 percent and cut at least $300 million from individual campus budgets, among other measures,
California State University, the nation's largest four-year university system with 450,000 students, intends to cut enrollment by 40,000 in the next two years and has increased student fees 32 percent.
It will lose about $640 million in federal stimulus funds next year, which could led to more cuts if the money isn't made up elsewhere, CSU spokesman Claudia Keith said.
Yudof said Californians must find a way to pay for higher education if they want to preserve the quality of state schools. He suggested higher taxes but did not elaborate.
"It's a question of being a great university or a crummy university," Yudof said.
Democrats in the state Legislature have proposed taxing oil produced in California to raise money for higher education. But the idea has faced united opposition from Republican lawmakers.
Yudof declined to endorse an oil tax in California.
Meanwhile, state Sen. Leland Yee, D-San Francisco, has proposed limiting executive compensation at UC and CSU during tough budget years.
He has been critical of compensation packages exceeding $9 million given to top executives in the UC system while other cost-cutting measures were imposed on faculty and students.
Yudof has repeatedly defended the salary packages. On Thursday, he said UC chancellors are paid about $200,000 less than leaders at other top tier universities.
Contra Costa Times
Oakland truckers face lengthy process to qualify for retrofit grants
Red tape frustrates port truckers...Cecily Burt, Oakland Tribune
Mamdoh Ibrahim applied in early June for grant money to install diesel filters on two trucks he owns and uses to haul cargo from the Port of Oakland. After more than two months, he's still waiting.
Starting next year, all diesel trucks hauling cargo from the port — at least 2,000 of them, based on conservative estimates — must comply with state air regulations concerning diesel emissions or get locked out at the gate.
Trucks manufactured from 1994 to 2003 will need new filters. Older trucks will be banned. Newer trucks have a few more years to comply.
There's a $22 million pot available to help truckers buy the new diesel filters, which have been shown to reduce by 85 percent the deadly particulate emissions that can cause cancer and other serious health problems.
The filters vary in price, but a typical unit for a long-haul truck can run $14,000 to $16,000, including installation. But the sales tax and annual maintenance cost are the truck owner's responsibility. Part of the fund will be used to award $50,000 grants to help some drivers buy new trucks.
But the process is long and arduous, often taking nearly three months or more from start to finish. Time is running out, and the truckers are getting nervous.
"I'm still two steps away from accomplishing this mission, and I'm really starting to get nervous now," said Ibrahim, 37, of Alameda, during one of his many visits to the OT411 Trucker Information Center on Burma Road in Oakland to drop off more documentation for his application. "If I don't work, I won't be able to eat. I have to be able to feed my family. This program is good, but it's bad timing (with the economy)."
The Bay Area Air Quality Management District is overseeing the retrofit program and has contributed $5 million to the fund, along with $10 million from the state Air Resources Board, $5 million from the port and $2 million from the U.S. Environmental Protection Agency.
Since early May, representatives from the port and the air district have spent afternoons at OT411 answering questions and helping truckers fill out applications.
The reps are also making sure the truck owners have collected all the additional documentation required for the application, such as proof of ownership and insurance, vehicle inspection records, driver manifests or logs showing the locations of each pick up and drop off for a three-month period, and mileage records, said Tim Leong, a port environmental scientist.
But that's not all. Before applications are accepted drivers must shop around for a price quote from one of several filter vendors who are vying for their business. Trucks require different types of filters depending on how hot the exhaust system gets. A temperature probe is installed in each rig's exhaust pipe, and the results checked via computer after a week's worth of driving.
Trucks that do long hauls outside the Bay Area usually qualify for passive filters because the exhaust system gets hot enough to reduce to ash the dangerous soot captured in the filter. Once passive filters are installed, the driver has to have the unit serviced only once or twice a year.
But trucks that log fewer miles or idle for long periods require active filters to reduce the soot buildup. Trucks with the most common type of active filter have to be plugged into a stationary heat regeneration unit for a few hours every couple of weeks — or days, depending on the manufacturer. That can be a major inconvenience for most drivers because they don't own their own regeneration units, and none are located close to the port entrance.
Few actual filters have been installed so far, but those numbers should start to climb in the next month or so. For example, a week ago Peter Tuckerman, president of Emissions Retrofit Group in Sacramento, one of 20 or so companies offering filters, said he had 35 contracts in the works and expected to install two filters this weekend, his first for the Oakland port program.
Sense of urgency
The OT411 center has gotten much busier as the deadline nears and word spreads among the drivers. Thirty to 40 truckers stop by after work each afternoon and wait patiently in line to talk to a live person about the program, Leong said.
From May 4 to July 31, approximately 1,600 drivers visited the center and 343 completed applications were accepted, said Marilyn Sandifur, a port spokeswoman. Slightly more than $5 million of the fund has been committed so far, she said.
As of Monday, about 400 retrofit grant contracts had been issued and signed, meaning the vendors have the green light to order the filters and do the installation, said Damian Breen, grants manager for the air district.
Drivers who applied for the retrofit program last year and were left hanging when state funding never materialized were not required to reapply. About 300 of the grant contracts issued are carry-over applications from last year, he said.
Breen estimated the $22 million fund will be pay for about 800 filter retrofits and about 200 grants for new trucks at $50,000 each.
When it's done, it's done. And they are running up against the clock.
It takes on average six to eight weeks to get an application approved so the vendor can install the filter. Depending on the model, it can take several weeks to manufacture and ship, he said. Once the filter is installed, trucks have to be inspected by the air district one last time.
Breen said at some point they will reach a natural deadline.
"The drivers are being told that we are getting close to that point," he said. "We haven't set a deadline yet, but it is going to be the next step in the process. Understand, this isn't a new program. We've been working with truckers for two years now."
Bill Aboudi, operations manager for AB Trucking, said he's doing everything he can to convince truckers they have to get it done, although he understands why they are confused given what happened with the application process last year. Some drivers have heard the deadline will be extended, but Aboudi said that's not true.
"(The state) could have done this so much better," Aboudi said recently. "It has cost more than $22 million in time wasted and uncertainty and stress. People don't know what to do."
Breen agrees it's an exhausting process, but the result will mean much healthier air for residents and truck drivers. Breen said recent data has shown that the port may be responsible for up to 25 percent of the cancer risk in West Oakland, up from 16 percent cited in earlier studies.
"The toxics from transportation is a big health risk, and (this program is) guaranteeing 85 percent emissions reduction in 1,000 trucks," Breen said. "So there is a corresponding health benefit to the community."
Carmel Valley water study ready for September Ranch subdivision
Report analyzes use for proposed September Ranch...JIM JOHNSON, Herald Salinas Bureau
September Ranch is back again, with a new water study in hand.
Last week, a revised water demand analysis was released for the controversial Carmel Valley subdivision, for which an environmental impact report has been rejected twice by the courts. The new 168-page water study will be available for public review and comment until Sept. 28.
In May 2008, Superior Court Judge Susan Dauphine overturned the long-delayed project's revised environmental review, finding that the analysis of its water demand was inadequate.
A few months later, county supervisors hired Brandman and Associates, which had done the previous environmental review on the project, to do the new $26,575 water study paid for by developer Jim Morgens.
In July, the supervisors finally rescinded their previous approval of the 891-acre, 95-home project, which was first proposed in 1995.
According to county planner Laura Lawrence, the new water study employs more data, focusing largely on water demand from similar subdivisions such as Monterra Ranch, Tehama/Cañada Woods and Pasadera, but reaches similar conclusions.
"Really, what the difference is, we did more analysis of like subdivisions and what their demand was," Lawrence said, pointing out that the new data doesn't fundamentally change the estimated water demand for the project contained in previous environmental reviews.
According to the study's summary, it found only a "slight increase in estimated water demand for each category of home, and a slightly reduced demand for water treatment, which together have a marginal effect on the overall water demand forecast."
Michael Stamp, the attorney for project opponents who sued over the EIR, said he hasn't had an opportunity to review the new water study and it will likely be next month before he could do so. Stamp noted that the environmental review has been a lengthy process.
"This is where we are after 10 years of lawsuits," Stamp said. "Funny thing is, we're right back where we started with looking at the water demand and the effect on the (nearby Carmel) River."
Originally approved as a 109-home subdivision by the Board of Supervisors in 1998, the project was challenged successfully in court in 1999 based on the EIR's failure to properly assess the water demand and traffic impact.
During that court battle, a public records lawsuit by The Open Monterey Project claimed that the county allowed the developer's attorney to "ghost-write" official documents.
The court ultimately ruled the county would have to release certain documents it had previously refused to provide, and pay $245,000 in legal fees to the plaintiffs in the suit.
In the project's second go-round, the supervisors again approved the proposal — albeit a smaller alternative — by a 3-1 vote in December 2006. But project opponents again filed suit, challenging the EIR.
In the meantime, a Carmel Valley incorporation effort aimed largely at preventing large developments, such as September Ranch and Rancho Cañada, is headed to the ballot Nov. 3.
As proposed, the project would include 73 market-rate homes, 15 "inclusionary" units and seven "workforce" houses, as well as about 817 acres of open space, including both public and private land. An existing equestrian center and buildings would remain.
Lawrence said public comments on the new water study will be compiled and responses written by staff for inclusion in the project's EIR. She said the supervisors could consider the project — with the study and public comments — as early as late October.
The water study is available for review at the county Resource Management Agency in the County Government Center in Salinas, at the Monterey County Library's branch on West Carmel Valley Road and at Harrison Memorial Public Library in Carmel.
Los Angeles Times
Birds must take a back seat to planes, lawmakers decide...Patrick McGreevy in Sacramento...August 20, 2009 | 6:44 pm
Worried that geese and jets don’t mix, the state Senate passed a measure today that would give airports greater authority to kill birds that might interfere with airplanes -- without being cited by state wildlife wardens.
The legislation, previously approved by the Assembly, now goes to the governor’s desk.
It was introduced by Sen. Dave Cox (R-Fair-Oaks), months after a US Airways jetliner ditched in New York's Hudson River after striking some Canada geese.
State wildlife officials have threatened to cite California airport operators for shooting birds near flight paths.
``The Federal Aviation Administration requires airports to keep birds away from airplanes as much as possible,’’ Cox said. ``This bill gives airports the tool to do their job without interference from the state Department of Fish and Game,’’ Cox said.
Traffic noise could be ruining sex lives of frogs...ROD McGUIRK, Associated Press http://news.yahoo.com/s/ap/20090821/ap_on_re_au_an/as_
CANBERRA, Australia – Traffic noise could be ruining the sex lives of urban frogs by drowning out the seductive croaks of amorous males, an Australian researcher said Friday.
A well-projected and energetic croak is the male frog's most important asset in the quest to attract mates to his pond, Melbourne University ecologist Kirsten Parris said.
But competition from traffic noise in Melbourne could be a reason why frog numbers have declined in Australia's second-largest city since her survey of more than 100 ponds began in 2000, she said.
"If there are a number of different males calling, the one that sounds the best often gets the girl," Parris told The Associated Press. "You have to be pretty clear about your assets if you're a male frog."
"Generally, if he's putting a lot of energy into calling — if he's calling loudly or quickly or for a long time or all those things combined — it shows he's fit and strong and generally those things tend to correlate with female choice," she added.
Parris found the distance at which a frog suitor can be heard by a potential mate is slashed by city noise.
"This makes it much harder for frogs to attract mates and this could then mean that their breeding success is reduced," Parris said.
Frog species with low-pitched croaks are most disadvantaged because they are competing against the low-pitched rumble of traffic and machinery such as air conditioners, she said.
The southern brown tree frog has adapted by raising the pitch of its croak in areas where there is traffic din, she found.
In the noisiest parts of Melbourne, the frog's usual pitch cannot be heard by other frogs beyond 21 yards (19 meters). At the higher pitch, the croaks carry an additional 16 feet (5 meters).
The popplebonk frog's call can be heard by females from 875 yards (800 meters) without background noise. That range shrinks to only 46 feet (14 meters) near busy roads.
Parris presented her research on Thursday to the 10th International Ecology Congress in the eastern city of Brisbane.
Ken Thompson, a University of Sheffield ecologist who edits the British journal, Functional Ecology, described Parris' findings of reduced mating because of traffic noise as "highly plausible."
"There is accumulating evidence that noise in urban habitats is having an effect on the behavior of animals," Thompson said.
He said his own university's research found British birds were singing at night because their habitats had become too noisy during the day.
Existing homes selling fast - record fast
The volume of home re-sales has been on the upswing for four consecutive months...Les Christie
NEW YORK (CNNMoney.com) -- Sales of existing homes rose in July for the fourth consecutive month, lending support to economists who argue a recovery is near.
Sales of previously owned single-family homes were up 7.2% compared with June and 5% from July 2008, The National Association of Realtors (NAR) reported Friday. The monthly gain was the largest on record for existing-home sales, which NAR has tracked since 1999.
"The housing market has decisively turned for the better," said Lawrence Yun, NAR's chief economist. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."
July home sales hit an annualized rate of 5.24 million proprieties, marking the first breach of the 5 million annualized rate mark since last September, when they hit 5.1 million. Since then, they have stayed in a very narrow range, bouncing between between January's low of 4.49 million and October's high of 4.94 million.
The July performance far exceeded expectations: A consensus of real estate experts had forecast sales of 5 million.
Of course, homes should be selling. Prices have fallen more than 32% from their peaks, set in the summer of 2006. Plus, mortgage rates near historic lows makes the cost of purchasing a home lower than they've been in nearly 20 years.
"In some recovering markets like San Diego, Las Vegas, Phoenix and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," Yun said.
Overall though, the national inventory rose by more than 7% to 4.09 million units. That will continue to keep prices low, according to Mike Larson, a housing analyst with Weiss Research.
"There's a bifurcation of the market," he said. "There's excess supply putting downward pressure on prices and people respond to the lower prices by buying homes."
Housing is its most affordable in many years, he pointed out. "Falling prices is not part of the problem, they're part of the solution," he said.
Hurting home sales have been stubborn increases in job losses. More than 6.7 million jobs have been lost since the beginning of 2008.
That's one reason why Robert Dye, a senior economist for PNC Financial Services (PNC, Fortune 500), is keeping his optimism in check.
"I wouldn't go overboard on this number," he said. "The economy is still healing and will continue to run into some bumps. But it does bode very well for the future and shows buyer confidence is increasing."
There is one potential bump, however: The looming end of the first-time homebuyers credit. The credit gave first-time homebuyers an up to $8,000 refund on their taxes if they close on a deal before Dec. 1. That credit has been motivating buyers, and when it expires, demand could dry up.
"Just like with the cash-for-clunkers program, we run the risk of a letdown as the program runs its course," Dye said.
Where homes are selling
Regionally, the strongest market was the Northeast, where sales soared by 13.4% to an annualized rate of 930,000. That was 3.3% higher than last July. The median price of homes sold during the month was $236,700, off 15% from last year.
Midwest sales rose 10.9% to a 1.22 million rate, 8% higher year-over-year. Prices there have sunk 5.9% over the past 12 months to a median of $157,200.
In the South, sales were up 7.1% from June and 5.4% from last July to a rate of 1.95 million. Price have dropped 7.1% to $164,500 over the past 12 months.
The only region reporting a slip in sales was the West, where they fell 1.7% to a rate of 1.13 million. That was ahead of last July, however, by 1.8%. The median price there was $202,300, a whopping 28% below what is was a year ago.