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Real Estate

DataQuick: 1 of 3 homes bought with cash in 2012

Cash is king, especially when it comes to deep-pocketed investors looking to snatch lower-priced homes, including short sale properties.

Almost one of every three homes were bought with cash in 2012, a record for all-cash deals – and more than double the annual average, according to DataQuick.

The state had a record 145,797 cash deals last year, compared to 125,812 cash purchases in 2011. In 2007, the state had 39,731 cash purchases, DataQuick reported.

homes pleasanton 1

“It’s clear that a lot of today’s housing market recovery is being fueled by people putting their own money into homes,” says John Walsh, president of DataQuick. “Some cash buying is part of a normal housing market, but we’re at twice that normal rate. There are always some rich people, also buyers from abroad, but in a normal market the biggest single category would be retirees and empty-nesters who are downsizing. Today, a lot of buyers are chasing what they view as the deal of a lifetime.”

Cash deals accounted for 32.4% of home sales in 2012, compared to 30.4% in 2011 – and more than double the annual average of 15.6% since 1991, according to DataQuick.

Cash buyers paid a median of $205,000 last year, compared to $305,000 for those who financed their purchases. The state’s median-home price, whether financed or bought with cash, was $275,000.

Cash deals are more common as homebuyers face much-tougher mortgage requirements.

“Even a lot of well-qualified buyers can’t get loans,” Walsh says. “While the market overall is improving, sales levels are still below average and prices much closer to the bottom than to the peak.”

Southern California – paced by the 24,688 homes in Los Angeles County – had the highest percentage of cash deals last year at 20.2%, followed closely by the Central Coast at 20.1%. Cash deals accounted for 17.7% of Bay Area home sales in 2012.

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Sports

Forbes: California’s four NBA teams valued at $2.5 billion; Lakers at $1B

Big cable deals, an improved revenue-sharing pact for smaller-market teams and a strike-shortened season helped increase NBA team values by 30% to $509 million.

California’s four teams – the Los Angeles Lakers and Clippers, Golden State Warriors and Sacramento Kings – enjoyed a combined league-beating 35.5% gain over the past year, according to a Forbes magazine report in January. The four teams have a combined value of $2.51 billion, led by the $1 billion tag for the Lakers, the second-richest team, behind only the New York Knicks at $1.1 billion.

The Los Angeles Lakers are valued at $1 billion, making the 16-time champions the second-most valuable NBA team, behind the New York Knicks.
The Los Angeles Lakers are valued at $1 billion, making the 16-time champions the second-most valuable NBA team, behind the New York Knicks.

The 16-time NBA champion Lakers – led by Kobe Bryant and Dwight Howard — boast the biggest payroll in the league, thanks in part to a 20-year cable deal with Time Warner Cable valued at $3.6 billion. The Lakers had revenue of $197 million, with operating income of $47.8 million – both are the second-best in the NBA.

The Golden State Warriors finished at No. 8, with a value of $555 million, a 23% increase from a year ago. The Bay Area team had revenue of $127 million and operating income of $29.1 million.

The Golden State Warriors are worth an estimated $555 million, a dramatic increase from last season.
The Golden State Warriors are worth an estimated $555 million, a dramatic increase from last season.

The Sacramento Kings, currently the center of multiple offers for about $520 million, are valued at $525 million, a head-turning 75% boost from the 2011-12 season. The Kings had revenue of $96 million last year with a paltry $2.6 million of operating income – or about the equivalent of eight games played by all-star Bryant.

The Kings could move to Seattle if businessmen Chris Hansen and Steve Ballmer, president of Microsoft Corp., are the successful bidders, which should be known in the next several weeks. Or a competing group could purchase the Kings from the Maloofs and build a new arena in downtown Sacramento, the latest plan for the troubled team.

The Sacramento Kings, paced by second-year point guard Isaiah Thomas, are worth $525 million, a 75% increase from last season.
The Sacramento Kings, paced by second-year point guard Isaiah Thomas, are worth $525 million, a 75% increase from last season.

The Los Angeles Clippers – headed by Chris Paul and Blake Griffin – finished at No. 18 with a value of $430 million. The Clippers, longtime on-court disappointments, had revenue of $108 million last season, with operating income of $9.1 million.

Only the Clippers were the only California team valued at less than the league average of $509 million, a 30% increase over last year.

A new collective-bargaining agreement, which cut the cost for players from 57% to 50%, an increase in revenue from cable television deals, and new and renovated arenas are the primary reasons for the impressive one-year gain. The labor agreement also boosted the dollars that high-revenue teams must provide to low-revenue teams, such as the Los Angeles Lakers sending money to teams like the Sacramento Kings.

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Economy

Car sales gain for 15th-consecutive quarter, up 25% in 2012

A better economy, easier-to-find credit and higher trade-in values helped new-car sales increase for the 15th-consecutive quarter, the latest evidence of improving consumer confidence in California.

Fourth-quarter accelerated 22% compared to a year ago, and annual registrations reached 1.6 million vehicles, a 25.3% increase vs. 2011, according to the California New Car Dealers Association in Sacramento. Basically, registrations and sales are the same, since buyers must register their vehicles.

New-car sales are critical to the California economy, especially since cash-strapped state and local government depend heavily on sales-tax revenue. However, industry analysts warn the double-digit gains of the past few years are likely over, predicting a more modest 8.2% increase to 1.75 million vehicles in 2013.

But automakers should celebrate a rather impressive 2012.

Korean automaker Kia enjoyed the biggest gain last year, selling 59,557 vehicles – up 53.3%, the best performance among the 15 top-selling brands. Subaru followed with a 44.2% increase, while Toyota/Scion at 39.1% and Volkswagen at 37.9% finished in third and fourth place, respectively.

A Honda dealership in the auto mall in Elk Grove, a suburb of Sacramento.
A Honda dealership in the auto mall in Elk Grove, a suburb of Sacramento.

American, European, Japanese and Korean manufacturers reported at least 17% increases in 2012, according to the state trade association. Korean automakers – think Hyundai and Kia – led the race at 35%, followed by Japanese manufacturers at 30.3%. American automakers enjoyed a 17.6% boost in sales from a year ago.

Toyota remained the state’s best-selling brand last year with 296,141 vehicles compared to the 212,888 in 2011. Honda finished at No. 2, with 181,382 vehicles, a 30.2% gain, while Ford finished in third place with 176,408 vehicles, a 13.2% increase. Chevrolet was a distant fourth with 133,445 cars and trucks sold, but a still solid 12.5% improvement from 2011.

Chrysler (78.8%), Lexus (31.0%) and Acura (29.2%) also reported good sales volume in 2012. But the three brands are not listed among the 15 best-selling brands in the state.

Only four automakers went in reverse last year, paced by Mitsubishi and Lincoln with declines of 18.6% and 13.7%, respectively. Volvo and Jaguar also slid in 2012.

Higher gas prices and thinner pocketbooks played a major role in the best-selling model race, with 60,688 hybrid Toyota Priuses selling in 2012, followed close behind by second-place finisher Honda Civic with 57,124 vehicles. Toyota sold 50,250 Camrys, a previous top-seller, followed by the Honda Accord at 49,420 for third and fourth place, respectively.

The Ford F-150 remains the best-selling full-size pickup – and one of the best-performing models overall – in the state, with 25,434 hitting the street, about 7,400 more than the Chevrolet Silverado. The Dodge Ram finished in third with 11,299 units.

Car-crazy California easily outpaced new-car sales in the rest of the nation, which had a 13.4% increase in 2012.

Categories
Economy

San Jose economy best in California, Sacramento the worst

San Jose boasted the best economy during the past three years, largely because of the booming tech industry and fast-paced hiring by companies such as Apple Corp., Google Inc. and Facebook Inc.

Silicon Valley’s economy grew 18% from 2008 to 2011, easily the largest in the state and 50% better than second-place Oxnard, according to the U.S. Bureau of Economic Analysis. Silicon Valley’s GDP climbed to $177 billion in 2011, the most recent figures available.

San Jose had the best economic growth during the past three years, easily beating the national average.
San Jose had the best economic growth during the past three years, easily beating the national average.

Ten cities in California beat the average national economic growth of 5.0% during the three-year period. Only San Jose, Oxnard and Madera (11.6%) had more than double the national average, according to the annual report.

Sacramento – a region dominated by government employment – had the smallest economic growth during the three-year period. Stockton, El Centro, Santa Rosa and Vallejo were also among the five worst cities in the state.

The federal report did not include metropolitan regions with flat or a decline in GDP, including Los Angeles-Riverside, Redding and Santa Cruz.

Beaumont, Texas, had the highest growth rate at 34% in the three years, while Casper, Wyo., endured the largest decline at 14%.

Categories
Agriculture

Record grape crush, prices in 2012

California grape growers enjoyed their largest-ever crop and record prices, as red and white grapes continued with double-digit growth.

The state’s grape crush climbed to a record 4.39 million tons, a 13% increase from 2011 – and 1% larger than the previous record in 2005, according to the California Department of Food and Agriculture.

A grape cluster in Sonoma County.
A grape cluster in Sonoma County.

Red and white grapes accounted for the record crush, with red grapes – which account for 52% of overall production – increased 19% to 2.92 million tons. White grapes jumped 21% to 1.73 million tons. The grapes, used largely for winemaking, comprised 92% of the crop last year.

They also helped offset the dramatic decline of raisin grapes and table grapes, which plummeted 28% and 36%, respectively.

The combined price for all varieties – wine, raisin and table grapes – reached a record $737.61, up 25% from 2011. Across the board, grape growers enjoyed healthy increases in prices, with red wine grapes soaring the most at 25% to $883.62.

Raisin grape prices improved 20%, while table grapes increased 20%.

Central California grape growers – Fresno, Tulare and Kings counties – produced the most at 1.46 million tons, but their price of $369 pales compared to leader Napa County at $3,565. Sonoma County’s price per ton was the second highest at $2,183.

Categories
Government Social

California has fourth-highest tax rate; Arizona, Nevada among lowest

California has the nation’s fourth-highest state and local tax burden as a percentage of personal incomes in 2010, and that was before voters favored Proposition 30 that increases sales and income taxes last fall, according to the latest national survey by the Tax Foundation.

Californians’ tax burden was 11.2% in 2010, the latest information available from the nonprofit group. The Golden State was only better than first-place New York at 12.8%, New Jersey (12.4%) and Connecticut (12.3%). And on a per-capita basis, California’s state-local tax burden was the sixth highest at $4,934.

Arizona and Nevada – bordering states that aggressively advertise and recruit companies from California – were among the lowest in the nation, at 8.4% and 8.2%, respectively. Arizona finished at No. 40, while Nevada ranked No. 42, or two of the states with the lowest rates.

And Californians agreed to boost the state’s sales tax rate by a half-cent and increase additional income taxes on the highest-income residents in the state. Prop. 30 is expected to raise about $6 billion per year, though the state would still remain lower than third-place Connecticut, according to the Tax Foundation.

California’s high tax burden is largely based on high sales, income, gas and corporate taxes, while property taxes are relatively low, thanks to Proposition 13.

Nevada has the nation’s lowest corporate and personal income tax rates, while Arizona finished at No. 24 and No. 17, respectively.

Alaska had the lowest overall state and local tax burden at 7.0%.

Check the complete report at http://taxfoundation.org/article/facts-figures-handbook-how-does-your-state-compare-0

Categories
Agriculture

California wine producers help U.S. wine exports reach record

U.S. wine exports – with 90% from California – reached a record $1.43 billion in 2012, the third-consecutive annual increase.

The nation’s wine producers, from high-end makers to bulk operations, shipped 47.2 million cases to international markets last year, according to the Wine Institute in San Francisco.

“California wine exports continue to increase because of our quality, diversity and value, despite a highly competitive global market, significant trade barriers and a still-recovering economy,” says Bobby Koch, president of the Wine Institute. “We’ve worked to create more opportunities to export our wines by supporting our government in opening markets with Free Trade Agreements and other negotiations.”

A wine vineyard in Sonoma County, the center of the state's largest wine region. Photo courtesy of Patricia Snider.
A wine vineyard in Sonoma County, the center of the state’s largest wine region. Photo courtesy of Patricia Snider.

The 27-member European Union received the most shipments at $485 million, a 1.7% increase from 2011. Canada was close behind, at least when it comes to shipments, at $434 million, a 14% gain.

The fast-growing China economy has allowed more Chinese to enjoy California wines. China was the fifth-largest destination for the state’s wines at $74 million, up 18%.

Hong Kong was the third-leading destination at $115 million, but was down 30%. Japan had $111 million in shipments. Vietnam and South Korea – both small overall markets with a combined $43 million – reported 25%-plus gains from 2011.

“Wine’s prominence is growing throughout Asia as consumption remains buoyant and forecasts estimate continued growth,” says Eric Pope, regional director of emerging markets for the Wine Institute. He adds Hong Kong’s dramatic decline was largely due to the country’s elimination of an 80% import duty a year earlier, which affected the export revenue tally.

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About

About Calonomics

Welcome to Calonomics, a different look at economics in the Golden State.

The website crunches data, grabs reports and looks at the numbers that shape one of the world’s largest economies.

California is home to the entertainment industry and Silicon Valley, where iDreams become iReality. Californians enjoy higher incomes compared to residents in many other states, historically better home appreciation, a hard-to-beat climate and the opportunity to downhill ski in the morning and surf in the afternoon.

But it’s also a tale of two states.

California boasts some of the globe’s richest entrepreneurs but overlooks a farm-rich area where poverty rules. The state has some of the brightest minds but many often-failing public schools. The state has beautiful beaches and breathtaking national parks, all within a couple hours from some of the most violent neighborhoods in the nation.

Calonomics editor Ron Trujillo at the west side of the state Capitol. Photo courtesy of Patricia Snider.
Calonomics editor Ron Trujillo at the west side of the state Capitol. Photo courtesy of Patricia Snider.

Certainly, the Golden State can do some bragging and chest thumping, but some head hanging is needed, too.

We have many challenges but also numerous opportunities, from highly skilled employees to numerous natural resources. We also enjoy one of the most-diverse populations in the world, where new ideas are developed and shared – and often exported.

The goal of Calonomics is to take a different look at the companies, the people and data that make California. It’s not about replacing traditional media – read your daily newspaper, please – but combining the basic report with the more obscure to establish an easy-to-read economics website.

Sure, the basics – such as home sales and the monthly jobless report – are part of the site, along with some fun and harder-to-find stories. Another goal is to share facts that might have been overlooked or were merely a casualty of limited space and time by often-overworked journalists in traditional media.

I’m a two-decade business journalist and most recently editor of the Sacramento Business Journal. I’ve also served as the business editor with The Fresno Bee and Press-Enterprise in Riverside. My career includes working as a business reporter at USA TODAY, the Santa Barbara News-Press and Visalia Times-Delta. I’m currently a vice president for a public relations firm in the Sacramento region.

If you have comments about the site or would like to suggest topics, please send an email to info@calonomics.com.

Thank you for reading,

Ron Trujillo
Sacramento
March 2013