'The Night Has Been Too Lonely'

The words from Bette Midler's "The Rose" remind we families in Orange County and the Inland Empire of the foreclosure crisis that has thudded against our doorstep. Chapman University's midyear economic report released this morning paints a painful picture for our three counties – of homes and families in distress and home values dipping well into the double-figures. A recession in full bloom.

"The job market is the good news," says Chapman economist Esmael Adibi. "Orange County's should stabilize in the beginning of 2009. We shouldn't see further job losses, and that's a big deal. People who are having problems now are having them because of interest rates. If they lose the job, it's a double-whammy. That's the bigger problem, if they don't have a job. Everything else is irrelevant."

The Inland Empire this year is suffering its first job losses since 1964. And, according to Chapman's statistics, Orange County will lose 18,000 jobs this year.

"In the Inland Empire, because (home) prices are going down so rapidly, by late 2009, affordability will start showing up," says Adibi. "But I don't count any rebounding prices."

By the end of next year, Adibi expects home prices to drop by 37% from their peak in the Inland Empire, and by 31% from the peak median home price in Orange County. This will continue to have a dramatic effect on families trying to hang onto homes that may be worth less than the mortgage that is owed. That, of course, is a recipe for foreclosure, for disaster.

"Look at our consumer sentiment (the worst since Chapman started charting this ranking of optimism, or lack thereof)," says Adibi. "It's not a great time for families."

As Midler sings: "The road has been too long."