September 2nd, 2010
03:19 PM GMT
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California produces about a quarter of America’s farm production with immigrants from south of the border doing the back-breaking work in the fields of the Salinas Valley, which was made famous by John Steinbeck. But the most visible “crops” sprouting up these days are For Lease or foreclosure signs in the real estate market.

Prior to a recent visit to what would be the world’s eighth largest economy on its own, I was wondering why there are concerns about a second dip into recession. Now I understand those concerns. During a two-week visit from San Diego to San Francisco, you can see what prolonged tough times look like and hear first-hand what business people are experiencing.

La Jolla, a picturesque seaside city of some 44,000 people, has basked in the light of being a bio-technology research hub with the University of California of San Diego providing a steady flow of government and private sector research and development funds.

What a wake up call as we drove through the village to see no fewer than one in four retail shops or office blocks shuttered with foreclosure or lease signs plastered across the empty spaces.

I had no problem driving up to any of La Jolla’s hotels and asking for a room without a reservation - this during peak season - or finding a prime-time dinner table at one of its fashionable open-air restaurants. It was a similar story 90 minutes up the coast in Newport Beach, where one retired industrialist who has lived in the area for nearly a half century said he has never seen anything like it.

It is difficult to ignore the numbers that paint a less-than-glowing picture for what has long been officially designated the “Golden State.” California had three of the top five metro-area slots in terms of real estate price gains nationwide as measured by S&P in the second quarter. Homebuyers rushed to close transactions before a federal tax credit expired. Prices then plummeted nearly 22 percent in July. Another alarming caveat tucked in the reports - more than a third of the sales have been generated from foreclosures, which means there is a great deal of pain being felt in the system.

Most alarming, perhaps, is the fact that unemployment at 12.3 percent is stubbornly high, and nearly three percentage points above the national average. As we finished our journey, we drove on Highway 280 through the heart of Silicon Valley to San Francisco and I realized, yet again, it would be difficult to find a more diversified economy on earth.

The state is home to hubs of high technology, bio-technology, defence and entertainment with leading universities providing the spark for entrepreneurs to pick up the ball and run. At this stage however, fewer and fewer are finding the means to jump into the game. State money is scarce, bank lending tight and signs of prolonged pain in abundance.

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soundoff (20 Responses)
  1. Haschina

    ALL THE BANKS TO EXTERMINATION, ALL THE MONEY TO INCINERATION, A WORLD FREE OF EXPLOITATION!!!...free world...free humans....
    THE ERA OF MONEY,MUST END NOW....

    September 3, 2010 at 11:13 am |
  2. sandra

    usa is 1 country broken,usa disasparing of face of wourld ,usa is wourst place of earth for life! hahaha,i like,usa

    September 3, 2010 at 12:45 pm |
  3. toddsaed

    There are those cyclical economists and historians, who say the depression and war cycles are all tied together, The danger is the old money East coast Rockefeller cliques will keep the upper hand, pursue wider wars in Iran, Saudi, Yemen, Syria, Afghanistan, Kuwait, and the Straits of Hormuz, oil lane territory, and Caspian Sea-Central Asia giant reserves, as they have begun ' anti terrorist " actions there now. The new money South and West wanting the quick buck might refrain, they were eliminated when Nixon was ran out, hard to see a come back there. Third wave economies a la the Tofflers could alleviate the worst case scenarios, the worst being escalation with Russia and China coming in. SO just hope and work for the best, like promoting the green energy, the helium 3 on the moon, ten times larger than all fossil fuels in the world, converted directly to energy, twenty five tons giving all the electricity in the US for one year. These and other amazing possibilities should give enough cause for hope, and inspiration to try ones best . We are all we have, fight for love, the future, the children, each other, it will be OK in the spirit world and dimensions whatever happens.

    September 3, 2010 at 2:19 pm |
  4. coderjones

    I still maintain a California License – but was forced to leave Newport Beach area... I had already dodged two wild fires – and after a home invasion that robbed me of every tool I use for work – I had nothing but a vehicle..... Which became home for a little while, thank goodness for state parks !!
    I found one of my computers online – traced it and reported it to the local police, but they would not act and the trace was lost – so was any hope of recovering my equipment.
    At that point, no home, no tools, no work, no money – I called for help from my family and got out of that hell hole.
    California may have been nice, once - but now, it should be called the survival state – because having a life, isnt possible there

    September 3, 2010 at 2:36 pm |
  5. Cytoman

    Having just moved out of California, I can tell you that it is even worse than the picture the article paints.
    If you have school aged children, they will be sharing the classroom with 38 other kids.
    Your house will never be worth what you owe for it and if you were counting on using your equity for retirement that is gone.
    And yet the legislature continues to argue over the budget and pass onerous laws that hamper every facet of your life.
    And Malibu still floods the ocean with sewer after every rain.
    Welcome to the Golden, Polluted, Crime Ridden, Gridlocked State.

    September 3, 2010 at 3:04 pm |
  6. RIchDad

    Capitalism is not so great after all...

    September 3, 2010 at 3:57 pm |
  7. Ruth in Ohio

    HOW IS THAT CHANGE THING WORKING FOR YA!

    September 3, 2010 at 8:18 pm |
  8. Ruth in Ohio

    THESE ARE PROBABLY THE SAME PEOPLE TRYNG TO BRING INCUBATORS INTO OHIO.......WHOOPPEE!

    September 3, 2010 at 8:19 pm |
  9. sam

    what can be expect from a country that was once the global leader, the most economic and powerful situation, had a full respectful towards the global, and so many good things about US, now take a look at this time, the unemployment rate is 9.6 %, most of the houses are in forclosure, many big companies got the bankrupcy, and other bad thing, but on the other hand we have sepnt $1 tri for Iraq and still spending $x m for afganestan daily. failur after failure. when we wake up and look at our country as the most priority

    September 4, 2010 at 3:49 am |
  10. Haschina

    ALL THE BANKS TO EXTERMINATION, ALL THE MONEY TO INCINERATION, A WORLD FREE OF EXPLOITATION!!!...free world...free humans

    September 4, 2010 at 10:48 am |
  11. Spock_rhp, Miami, FL

    a crisis made in Sacramento. With all the good intentions in the world, the state signed huge pay raises for unionized workers. It also restricted land development [restrictions cause higher prices -- profit in the pockets of existing owners and thus very popular with middle class owners], and has taxed the daylights out of industry.

    [so much so that Intel, founded in Silicon Valley, said point blank several years ago that it would cut jobs in CA for the foreseeable future while adding jobs elsewhere. HP is doing the same without making a big noise about it.]

    The good folk of CA have also provided many expensive social benefits to undocumented immigrants out of their pockets and thus has one of the highest ratios of such immigrants to citizens of any state.

    whoops! time to change course.

    September 5, 2010 at 4:22 pm |
  12. Oladipo Akinyemi Omole

    John,
    Are you saying it's a buyer's market? If it is, that would be good news wouldn't it ? Especially for would-be home owners like......
    Cheers.

    September 6, 2010 at 5:44 pm |
  13. Elberta Chapman

    Is walmart in financel trouble I work for them and they have been cutting alot of hours thru out the company and the hours that are being cut are full time longtime employees should i be worried.I thought that they was a stable company to work for but right now im not for sure when employees are looseing 10-15 hours a week thats a lot of cuts and its not just a few emploees in a store its all but mgmt.
    concerned employee

    September 6, 2010 at 6:02 pm |
  14. Evan

    Corporations are finding they don't need many people to generate profits. If you had the omnipresence of God to do a "virtual fly through" of silicon valley corporate office facilities, you could spend weeks flying through countless millions of square feet of office space with oceans of empty cubicles, conference rooms, many square miles of empty parking lots... almost as if a plague had left an apocalyptic landscape of barren infrastructure. Many corporate glass cathedrals are nearly empty, with a relative few wealthy multi-million dollar salaried executives representing these corporations working in slippers at their estates in Silver Creek and other posh gated communities. There's just no incentive to factor people into the business equation anymore. The real wake-up call will be when corporations realize they can bulldoze these skyscrapers and turn them into golf courses for their executives.

    September 7, 2010 at 2:13 am |
  15. TARIQ YAQOOB

    NO DOUBT CALIFORNIA ECONOMY IS DOWN THE TUBE,BUT SEEMS LIKE THE ECONOMY OF CALIFORNIA WILL START PICKING UP FROM FOURT QUARTER 2010.REAL ESTATE MARKET IN LA HAS NOSE DIVED,BUT NEWTON LAW OF MOTION IS ANYTHING WHICH GOES UP HAS TO COME =======?
    REAL ESTATE MARKET HAS PLUMETTED TO GREAT EXTENT BECAUSE OF HIGH RATE OF UNEMPLOYMENT IN CA,BUT BELIEVE IT THIS IS THE RIGHT TIME TO BUY ,YES &YES, DO U WANNA BET CONTACT ME IF ANYONE HAS ANY QUESTIONS 954-246-9688

    September 7, 2010 at 9:36 am |
  16. Steve Thompson

    If you want to see a real estate market that makes California's look bouyant by comparison, look no further that Detroit Michigan where nearly 1300 houses are listed for under $10000. Here's an article on Detroit's real estate:

    http://viableopposition.blogspot.com/2010/08/100-house-fact-or-fiction.html

    September 7, 2010 at 11:46 am |
  17. Knightarm

    Sorry ladie and gentlemen, many of the jobs that have been lost are no longer relevant; which means they ar gone and will not return. The jobs that have openings are for truly skilled labor and in some cases require creativity and skill. We baby boomers will at some point all retire. I'm not certain the positions will be filled. Good luck to you younger folks. Again, my advice...become truly skilled and get totally committed to that which you choose to pursue, then you might have a shot.

    September 8, 2010 at 10:34 am |
  18. SanDiegoResident

    I live in San Diego and while times are tough those who were paying attention and developed new skills as the economy changed are doing just fine. The world changes faster these days, continuing to do the same thing no longer works for very long and the school system hasn't yet adjusted (nor does it have an incentive to) so don't trust in the schools with your future. Take responsibility for your own future and _always learn_, _always build_, and you will likely thrive.

    For those of you who were flipping homes, pushing MLM packages, etc; what did you produce? Exactly, you produced nothing but consumed much, this 'crisis' is as much on all of you as it is on the banks.

    Homes should have never been thought of as an investment, they are a place to live and everyone should have access to an affordable one. This could have been the case had not greedy individuals and businesses pumped up the real-estate market with irresponsible money. Do you want to live in a world where its hard to just get by? If not then give the proper feedback to friends and associates who profit from such operations, no tolerance for flippers, mass accum. and renters, or pyramid schemes & MLMs...

    September 10, 2010 at 2:48 pm |
  19. catalyst

    hey you wanted the "terminator" for governor...you got TERMINATED MORONS!!!!

    September 11, 2010 at 2:51 am |
  20. atechsocial

    Same thing happening over here @Sandiegoresident. We are struggling here with half built buildings across the entire city, waiting for house pricing t jump so it worth continuing the development! Found this blog post about moving offices across the city too which is pretty revealing of the stresses involved... http://blog.atechsupport.com/corporate-office-relocation-london-guidelines/

    December 23, 2013 at 5:29 pm |

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