The View from Sacramento

I've been in the Sacramento area for the past couple of weeks -- that's why I've been so quiet. The view from up here is significantly different from that of the Bay Area. I haven't had to spend much time here in the last 2 years. I'm shocked at how many small businesses are just... gone. There are check cashing places in areas where there didn't used to be check cashing places -- always a bad sign. My 2 favorite family owned cafes are gone, along with a Starbucks. A couple of chains, too: the local JoAnn Fabrics closed, as did (of course) Mervyn's, and Linens n Things. The only stores that seem to have any foot traffic are the grocery stores and the thrift stores.

The place is a forest of "For Rent" signs, both residential and commercial. Whole retail buildings, which used to have half a dozen stores, as part of a bigger complex, are vacant. You don't see much residential real estate for sale that isn't a short sale or foreclosure -- and believe me, I'm looking.

The most extreme case is some 2 bedroom/1 bath condominiums in an okay area, that were clearly remodeled with the intent to sell. They came on the market in 2006, and the first sales were for around $225,00. The high price was $245,000. Want to guess what they're going for now? Go ahead, guess.

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Ready? $50,000. Yes, that's an 80% loss for that poor bastard who bought at the top. And his payments are probably what, at least $1200/month if he put down 20% and had a good loan, plus HOA dues of $200, plus taxes of $204, unless he's petitioned to have them lowered (which is easy to do). So that adds up to what? In the best case scenario, about $1600/month. Want to guess what they rent for? $825 - 850. This is the heart of the foreclosure crisis. This is the essence of jingle mail. Even if you have a good job, you're going to walk away from this one -- and remember, Sacramento is the state capital of California, the home of the unbalanced budget, lawmakers who won't budge on raising taxes, which means cuts, cuts and more cuts. Everyone knows someone, usually more than one, who has lost a job and/or a home.

On the other hand, people are pretty sanguine. Most of those who have been displaced in one way or another are looking forward to the next chapter in their lives. That's very heartening.