Sunday Reading – 07/24/2022


The following links are just news items and opinions that pass my desk throughout the week. I don’t necessarily support or advocate any of the items, they are just interesting reads.

Moving out: California cities are bleeding residents. How long will the trend last? – During the COVID-19 pandemic, it seemed like everyone knew a co-worker fleeing the Bay Area.

Now, a new report out of the Federal Reserve Bank of Chicago shows just how much the exodus is gaining steam.

Only Illinois ranked worse off than the Golden State when it came to moving vans heading for the border during the pandemic, according to the report, which focused on data from the moving company United Van Lines. In 2018-19, 56% of moves in California were families fleeing the state. In 2020-21, that figure jumped to nearly 60%.

The state that was by far the biggest draw of California residents? It was Texas, the destination for more than 7,500 California families during the four years in the study, perhaps little surprise given that Silicon Valley’s tech giants like Oracle, Tesla and Hewlett Packard Enterprise picked up and moved their headquarters there too.

California also continues to lose residents to Washington, Florida and Virginia while attracting consistently fewer movers arriving from those states.

California’s largest cities have been steadily hemorrhaging residents since the start of the pandemic. For the first time since 2013, San Jose’s population dropped below 1 million, and San Francisco’s population has dropped by more than 3% in the past two years. Even Los Angeles saw its population steadily decline during the pandemic. A continuing exodus from these cities, experts say, could eventually translate to a major shake-up across housing markets, demographics and corporate landscapes. Read More > in The Mercury News

California home sales see huge year-over-year drop, report shows – The number of home sales in California in June dropped a staggering 21% year-over-year, a report from the California Association of Realtors revealed this week. 

Outside of the early pandemic downturn in 2020, that plunge is the biggest since 2008, during the nadir of the Great Recession. 

The 345,000 home sales for the month of June represented a drop of 8.4% from May, and the median sale price was also down 4% from the previous month. The cost of a single-family home in California was $863,790 in June.

The dramatic downturn comes as mortgage rates soar, turning off buyers. After hitting record lows during the early pandemic, mortgage rates have almost doubled since the start of the year. The current average 30-year fixed rate is about 5.5%, up from 3.2% in January. 

The Bay Area has seen a similar trend to the rest of the state, with home sales down a whopping 29% over past year, according to the latest RE/MAX report. The cost of buying a home, however, hasn’t yet dropped in San Francisco. Zillow data shows that the average cost of a single family home in the city in June was $1.91 million, up 11.5% from $1.74 million in June 2021. Read More > at SFGATE

Real Estate’s Hottest Markets Reveal a Seismic Shift in Where Homebuyers Want To Live—and a New No. 1 – While the warmer months generally see a decline in homebuyers making the move to temperate Western regions, a new report by Realtor.com® reveals that westward areas are altogether missing from June’s 20 hottest real estate markets for the first time in the data’s history. (The rankings factor in a combination of demand—measured by the number of unique views per home listing—and how quickly homes are selling in that area.)

Instead, the East Coast dominates because it’s simply more affordable. In another first for the data’s annals, a new hottest market nabbed the top spot in June: Concord, NH.

This picturesque New England town saw homes linger on the market a scant 13 days before being snapped up by buyers. That’s almost a third less time than the already speedy national average of 32 days.

…Indeed, California’s fall from grace might seem sudden, given the Golden State had a whopping five metros in the top 20 hottest markets back in January. (Metros include the central city and the surrounding suburbs, towns, and smaller urban areas.)

By April, there were no California metros on the list. And now the homebuying sun hasn’t just set on California, but the entire Western region.

“When we look at the West Coast market, whether it’s Oregon, Washington, California, Arizona, or Nevada, their home prices have continued to rise even as mortgage rates jumped,” says George Ratiu, manager of economic research for Realtor.com.

Back at the beginning of this year, mortgage rates were 3.55% for a fixed-rate 30-year mortgage. That rate shot up to 5.3% for the week ending July 7, according to Freddie Mac. And still-rising mortgage rates (and home prices) might be the driving force behind the push to find a home in a decent price range.

“Rising interest rates have pushed the cost of a monthly mortgage payment up about 60% above a year ago,” adds Ratiu. “And in, say, the [San Francisco] Bay Area, the effect is going to be magnified. If you buy a $900,000 home, all of a sudden you’re spending $1,600 more a month.” Read More > at SFGATE

Mortgage demand drops to a 22-year low as higher interest rates and inflation crush homebuyers – The pain in the mortgage market is only getting worse as higher interest rates and inflation hammer American consumers.

Mortgage demand fell more than 6% last week compared with the previous week, hitting the lowest level since 2000, according to the Mortgage Bankers Association’s seasonally adjusted index.

Applications for a mortgage to purchase a home dropped 7% for the week and were 19% lower than the same week in 2021. Buyers have been contending with high prices all year, but with rates almost double what they were in January, they’ve lost considerable purchasing power.

While buyers are less affected by weekly moves in interest rates, the broader picture of rising rates has already taken its toll. Mortgage rates moved higher again last week after falling slightly over the past three weeks.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.82% from 5.74%, with points increasing to 0.65 from 0.59 (including the origination fee) for loans with a 20% down payment. That rate was 3.11% the same week one year ago.

Demand for refinances, which are highly rate sensitive, fell 4% for the week and were 80% lower than the same week last year. Those applications are also at a 22-year low, but the drop in demand from homebuyers caused the refinance share of mortgage activity to increase to 31.4% of total applications from 30.8% the previous week. Read More > at CNBC

The next battle in California’s housing crisis: Should cities tax empty homes? – From San Francisco to Santa Cruz, Berkeley to Napa, politicians and residents frustrated by California’s housing crisis are turning to a tool gaining global popularity: taxing empty homes.

While the details of recently proposed residential vacancy taxes vary, they’re already headed for the November ballot in San Francisco and the beach town of Santa Cruz. Berkeley, Napa, Los Angeles and areas of the Monterey Peninsula are debating similar measures.

The efforts are backed by tenant advocates and some longtime homeowners worried about affordability, but opposed by many Realtors and questioned by groups more focused on new housing development. Along with ballot campaigns to strengthen eviction rules in Oakland and expedite housing approvals in San Francisco, the battle brewing over empty home taxes is one of several reform efforts emerging from the housing turmoil of the pandemic.

…Part of the challenge for voters will be understanding the scope of the problem, since calculating vacancy isn’t as straightforward as it might seem. Earlier this year, San Francisco’s Budget and Legislative Analyst’s Office prepared a vacancy report at Preston’s request using 2019 Census data. It identified 40,458 vacant homes — about 10% of the city’s total number of homes — including temporary reasons like more than 7,200 units for rent and 2,400 units that were rented but currently unoccupied.

In the book “Homelessness is a Housing Problem,” the University of Washington researchers contend that San Francisco’s rental vacancy rate was more like 3.9% in 2017, when adjusted to show only vacancies that “a given renter might actually be exposed to.” Read More > in the San Francisco Chronicle

This Bay Area city is cracking down on sideshow spectators – Recognizing sideshows have evolved into dangerous problems throughout the region, Oakley joined in with other nearby cities to crack down on those watching or participating in such activities.

In a move aimed at curbing illegal racing and stunts that could cause injuries, the City Council has unanimously agreed to write new rules that would impose misdemeanor fines of $1,000 and up to six months in jail for spectator violators. Under current state law, drivers who participate in illegal street races could lose their licenses or face other penalties, while sideshow drivers could have their vehicles impounded for a month and face stiff fees to get them back.

A new law, AB3, was passed last year that will stiffen penalties. Beginning July 1, 2025, a judge could suspend a person’s driver’s license between 90 days and six months if the person is convicted of speeding as part of a sideshow.

Having originated in Oakland as car shows and barbecues, sideshows have evolved into dangerous events, Oakley Police Chief Paul Beard told the council on July 12. Such events often include large crowds, the shutting down of roads and streets, and sometimes police pursuits, assaults on officers, hit-and-runs and other criminal activity, he said.

In the past several years, more sideshows have come to East Contra Costa County – especially Antioch. Oakley joined in with other nearby cities to create a task force to deal with them, lending assistance when needed, he said. Read More > in the East Bay Times

Brentwood Cracks Down on Illegal Pot Grows. Is Prohibition the Problem? – The City of Brentwood in Contra Costa County has seen a rise in illegal home cannabis grows. The problem is so bad that city leaders have passed a new ordinance imposing hefty fines on anyone caught growing more than six plants.

The new rules consider each illegal plant to be its own separate violation. For a first violation, each plant could carry a fine of $100 per day. For the second violation, it would jump to $200 and then $500 for the third.

The measure was approved 4-0, with Vice Mayor Johnny Rodriguez absent from the vote.

“Having seen some of these grow houses in our community, not only is there immediate danger to the neighboring houses of fire and there are health concerns from the mold, but there also have been some violent interactions from criminal activity,” said Brentwood Mayor Joel Bryant as quoted by High Times Magazine. “Not only from the growers but people that are criminals that found out that that grow house was there.”

In nearby Antioch, city leaders aren’t seeing anywhere near this level of illegality. Unlike Brentwood, which prohibits all commercial marijuana, Antioch allows both cultivation and retail.

“As crazy as it sounds,” the availability of dispensaries seems to “mitigate the need for people to want to try and erect a weed house or weed grow because they don’t have to do that,” Antioch Interim Police Chief Steve Ford told the Santa Cruz Sentinel.

To legalization advocates, that doesn’t sound crazy at all. They’ve long argued that stricter rules on commercial activity bolster the black market. Read More > at California City News

Two-thirds of Americans are cutting back on restaurants and movies, 61% are driving less, four in 10 say they are spending less on restaurants and a third are using more credit cards as record 40-year high inflation hits home – Nearly two thirds of Americans have cut back on restaurants, movies and other fun nights out, according to a survey offering the latest snapshot of how 40-year-high inflation is causing widespread economic pain.

Some 65 percent of respondents said they were spending less on concerts and other types of entertainment, while another 61 percent said they were driving less — with the average cost of a gallon of regular gasoline still above $4.50.

More than 4 in 10 are spending less on groceries, according to the CNBC All-America Economic Survey of 800 people earlier this month, and about a third are using their credit cards more often to make it through the crunch.

Shoppers are spending less on everyday basics like bread, eggs and milk as well as processed goods like juice boxes, according to another study by NielsenIQ. Cereals alone have risen in price by a jaw-dropping 15.1 per cent.

Inflation reached a 40-year high of 9.1 percent last month, according to the government’s consumer price index, as people across the U.S. struggled to make ends meet and complained about the painful cutbacks they had to make. Read More > in the Daily Mail

Gender activists push to bar anthropologists from identifying human remains as ‘male’ or ‘female’ – As soon as ancient human remains are excavated, archaeologists begin the work of determining a number of traits about the individual, including age, race and gender.

But a new school of thought within archaeology is pushing scientists to think twice about assigning gender to ancient human remains.

It is possible to determine whether a skeleton is from a biological male or female using objective observations based on the size and shape of the bones. Criminal forensic detectives, for example, do it frequently in their line of work.

But gender activists argue scientists cannot know how an ancient individual identified themselves.

…“Labelling remains ‘male’ or ‘female’ is rarely the end goal of any excavation, anyway,” wrote Palladino. “The ‘bioarchaeology of the individual’ is what we aim for, factoring in absolutely everything we discover about a person into a nuanced and open-ended biography of their life.”

She is not alone. Gender activists have formed a group called the Trans Doe Task Force to “explore ways in which current standards in forensic human identification do a disservice to people who do not clearly fit the gender binary.”

“We propose a gender-expansive approach to human identification by combing missing and unidentified databases looking for contextual clues such as decedents wearing clothing culturally coded to a gender other than their assigned sex,” the group’s mission statement reads. Read More > at The College Fix

Why Incarceration Matters – Law enforcement and academics agree that three factors are involved in deterring crime: certainty of apprehension, swiftness of apprehension, and severity of sanctions—in other words, how likely you are to get caught, how quickly you get caught, and how long you spend in prison if you get caught. The two groups disagree, however, about which of these is most important for deterrence. Modern academics insist that length of prison sentences is not crucial, while law enforcement officials believe that the length of incarceration time actually stops people from committing crimes in the future. In a recent report, the United States Sentencing Commission put this question through a rigorous statistical testing procedure involving thousands of inmates over multiple decades and came up with a clear result: length of incarceration matters for recidivism—a lot.

Academics take a negative view of stiff sentences. Some argue that longer sentences have no effect on recidivism. Other scholars argue that longer sentences are criminogenic—that is, they cause people to be more likely to commit crimes when they are released. Liberal advocacy groups claim that shorter sentences would actually reduce future offending. But a thorough review of the literature by separate groups of respected scholars in 2009 and 2022 concluded that much of the academic research regarding the effect of length of incarceration on recidivism suffered from serious methodological flaws, including too-small study sizes and ill-advised attempts to judge the impact of minor differences in incarceration.

The United States Sentencing Commission, using its access to massive amounts of data about thousands of federal criminal defendants over many decades, decided to test the effects of incarceration on recidivism. The commission chose to study 32,135 federal criminal defendants released in 2010. The study divided the defendants into five groups based on length of sentence: 24–36 months, 36–48 months, 48–60 months, 60–120 months, and more than 120 months. The commission then checked to see which of the released defendants committed new crimes during an eight-year follow-up period.

The results were compelling. For defendants receiving a sentence of more than 60 months (five years), the odds of recidivism were 18 percent lower than a matched group of prisoners receiving shorter sentences. For defendants with sentences of more than 120 months (ten years), the odds of recidivism were 29 percent lower. These conclusions were statistically significant at p<0.001—a statistical measure that shows profound reliability. No statistically significant difference in recidivism was found for defendants serving less than 60 months. Read More > at City Journal

California’s fire season is so unusually quiet that it resembles a ‘normal summer’ – Despite fears that California could see its “absolute worst fire season, it’s been a relatively quiet fire year — so far.

State and federal data show that the massive blazes Californians have become accustomed to aren’t as massive this year. So far in 2022, wildfires have scorched 35,135 acres, according to combined data from Cal Fire and the U.S. Forest Service. That’s less than 20% of the acreage burned over the same time frame last year, and it’s significantly lower — roughly 10% — of the 5-year average over that time period.

The state has also seen 858 fewer fires compared with this time last year, according to the data. Firefighters have fought 4,409 fires so far in 2022, compared with 5,267 in 2021. Generally, it’s been a large number of small fires, plus a few more significant blazes such as the Washburn Fire still burning in Yosemite National Park.

But the peak months are still to come. Wildfires typically ramp up in mid-July, as vegetation gets even drier in the rainless summers and heat waves create the potential for large blazes. Read More > in the San Francisco Chronicle

Study: Too little salt may worsen outcomes for common type of heart failure – Restricting salt intake too much actually may worsen the prognosis for people with a common form of heart failure, a study published Monday suggests.

The research, published online in the journal Heart, suggested the possible benefit of adding salt to cooked food for certain heart failure patients.

And researchers said the association between too much salt restriction and poor outcomes was more pronounced in patients age 70 or younger and in non-White people.

“Over-strict dietary salt intake restriction could harm patients with [heart failure with preserved ejection fraction] and is associated with worse prognosis,” the Chinese researchers said in a news release.

With this type of heart failure, which accounts for half of all cases, the heart’s left ventricle can’t fill properly with blood, so less blood is pumped out into the body, the scientists explained.

Salt restriction is frequently recommended in heart failure guidelines, the scientists said.

But the optimal amount in patients with heart failure, especially those with heart failure with preserved ejection fraction, remains controversial.

The American Heart Association recommends no more than 2,300 milligrams a day and an ideal limit of no more than 1,500 mg. per day for most adults.

But the researchers said the optimal restriction range and its effect on patients with heart failure with preserved ejection fraction isn’t clear because these individuals often have been excluded from relevant studies. Read More > at UPI

California’s Port of Oakland shuts for a THIRD day in a row due to trucker protest over law forcing them to become employees: Supply chain crisis is now set to WORSEN – Truckers protesting a looming California labor law shut down one of the busiest seaports in the United States for the third day in a row.

Operations were halted at the Port of Oakland on Wednesday as hundreds of independent big-rig truckers picketed gates and blocked other drivers from hauling cargo in and out of terminals at the port. 

The truckers are protesting Assembly Bill 5, a gig economy law passed in 2019 that sets tougher standards for classifying workers as independent contractors.

The protesters worry that the law, which could soon be put into effect, will impose hefty costs on them that will slash their earnings. 

Demonstrations began on Monday and have grown larger and more disruptive with each passing day, exacerbating supply-chain issues that already have led to cargo ship traffic jams at major ports and stockpiled goods on the dock. 

Protest organizers say their actions will continue until Governor Gavin Newsom agrees to meet and discuss the issue.

The protests in Oakland followed actions last week at the nation’s top two seaports, at Los Angeles and Long Beach in Southern California. The three California ports handle about half of the nation’s container cargo volume. Read More > in the Daily Mail

The State Of The US Consumer: AT&T Crashes As Americans Can’t Afford To Pay Their Phone Bills – Shares of AT&T fell on Thursday after CEO John Stankey said that customers are starting to put off paying their phone bills – which resulted in the wireless carrier cutting this year’s forecast for free cash flow by $2 billion, Bloomberg reports.

Shares fell as much as 11% in early trading, the company’s largest slide since 2022 which erased the stock’s YTD gains.

A weakened consumer adds to pressure facing AT&T, which has already taken hits from deeply discounting new phones and capital outlay on network equipment. The company now expects 2022 free cash flow of $14 billion – with around $1 billion of the reduced amount tied to the “timing of customer collections.”

The news, which overshadowed second-quarter results that beat on profit and wireless subscriber growth, also hit peers Verizon and T-Mobile, sending shares lower.

“I’m not surprised to hear consumers are paying bills more slowly; they are already struggling with higher food and energy prices,” said Wolfe Research analyst Peter Supino. “I’m not worried so much for AT&T as I am for the broader consumer economy. You wonder if this is the canary in the coal mine.” Read More > at Zero Hedge

Depression is likely not caused by a chemical imbalance in the brain, study says – A recent review study is pushing back against long-held views in medicine that depression is caused by a serotonin imbalance in the brain.

Researchers from University College London conducted an umbrella review of past meta-studies and systematic analyses of depression’s relationship to serotonin activity that included tens of thousands of participants.

The study published this week in the journal Molecular Psychiatry concluded that there’s “no clear evidence” that serotonin levels or serotonin activity is responsible for depression. 

Serotonin is a neurotransmitter that plays a key role in governing mood, sleep, digestion and other body functions. For years, a chemical imbalance of serotonin has been widely viewed as the culprit for depression, resulting in the widespread use of antidepressants like selective serotonin reuptake inhibitors (SSRIs), which boosts serotonin in the brain. 

Researchers say the review calls into question the basis for the use of antidepressants. Read More > in The Hill

About Kevin

Manager of Mainframe Operations and Optimization – USS-UPI, Co-Founder and Board Member - Friends of Oakley A Community Foundation, Trustee RD 2137, Advisory Board – Opportunity Junction
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