I thought this article would offer hope to many of us out there.  It can only get better.

On the Path to a Housing Rebound

By Shawn Tully, CNNMoney.com

Jul 2nd, 2008   

“The pain that homeowners and homebuilders are feeling now is a sign that things are going to get better.

NEW YORK (Fortune) — The news that housing starts have fallen to their lowest level in 17 years sounds like one more reason to be depressed about the shrinking value of your home. In fact, it’s an almost certain sign that the path to a housing recovery is finally in sight.

If prices are going to stabilize, let alone rebound, the United States needs to produce far more first-time home buyers than new houses. That’s the only way to tame the glut of “For Sale” signs dotting front yards from the Inland Empire of California to the Gold Coast of Florida.

Builders constructed far more homes from 2002 until 2006 - the peak bubble years - than could possibly be absorbed by the normal growth in households.

Slideshow: Summertime poolside living

As a result, the market is now swamped with one million new and existing homes for sale that aren’t occupied, and hence need to sell quickly. That’s a multiple of the figure in most downturns, and it testifies to the duration and girth of the bubble.

“For the recovery to begin, builders need to eliminate the standing inventory of finished, unoccupied new homes,” says Mike Castleman, founder of Metrostudy, which assembles sales data on four million subdivisions across the U.S.

The massive overhang of unsold inventory has remained stubbornly high. Sure, builders cut back, but sales dropped just as quickly.

Now that excess supply is finally beginning to shrink. In April, the number of new homes for sale stood at 456,000 according to the U.S. Commerce Department, still a big number, but 93,000 below the mountainous figure a year ago.

The return of the first-time buyer

The key player in any recovery scenario is the first time buyer. The housing market operates with a pronounced laddering or ripple effect. When entry-level buyers flood the market, they not only stimulate production of new homes, they purchase existing homes. Those purchases, in turn, allow the sellers to move up to bigger houses.

But when the first-timers are absent, the entire buying chain gets frozen.

Today, newbies are coming back. Why? For the first time in years, entry-level homes are affordable. Builders have slashed prices, and what they’re building tends to be far smaller than the McMansions of the boom, selling for far lower prices. KB Home’s average selling price dropped to $248,0000 in its February quarter, versus $267,000 a year earlier. In 2006, KB’s basic model in Victorville, Cal., a former boomtown east of Los Angeles, took up as much as 3,800 square feet and sold for $328,000. Today, its stripped down offering goes for $220,000, at less than half the size.

So the first time in a decade renters can carry the mortgage payments and taxes on a new house for what they’re paying a landlord. Call it the New Affordability.

Here’s how the numbers play out: Single-family housing starts are now running at fewer than 500,000 a year. The normal demand for housing, based on immigration and household formation, is around one million units.

We won’t get back to that figure for a while because so many people rushed to buy homes during the boom.

But with first timers returning, sales should rise to almost 700,000 units by the end of next year, according to Bernard Markstein, senior economist for the National Association of Home Builders. That means sales will soon exceed new production by as much as 250,000 units a year.

That margin forms the foundation of the housing revival that comes in four steps.

Step 1:

First, the return of first-time buyers will shrink the overhang of new houses for sale.

Step 2:

Second, because so few new homes are being built, first-timers will start buying existing homes from owners who want to move up but have been trapped by the dearth of buyers. Their improved fortunes, though, come with a big caveat: The prices of new homes are now lower than comparably-sized existing homes. It’s as if used cars are selling for more than new ones. That can’t last. So move-up buyers are going to have to accept less than they had hoped to get for their current homes.They’ll get a big break as they trade up, however. Unless they bought at the height of the boom, they’ll still sell at a profit. They can then use that equity to buy bigger homes at bargain prices. During the bubble, homebuilders started pushing up home sizes to 3,500 square feet or more. It’s those behemoths that are selling for the steepest discounts today.

Step 3:

Next, housing starts should start rising, probably next year. The increase, however, will be slow and gradual. For the next two years at least, homebuilders will compete ferociously with existing home sellers for customers.

Step 4:

Eventually, the glut of existing homes will disappear as well. The excess of new-home buyers over new homes being built makes that inevitable. But the oversupply is so enormous that the healing process could take as much as three more years. Only then will prices in former bubble markets start rising again.

What could go wrong?

One event has the potential to slow or even derail the recovery: A sharp rise in interest rates. Right now, the first-timers are gorging on 6% loans guaranteed by the FHA. But rates may not stay there.

If they rise to 8% or higher because inflation rebounds, it would take a far bigger drop in prices to make new and existing homes affordable.

The New Affordability is now in place. But if rates rise, we’ll have to establish a New New Affordability - at even lower prices.”

Some of you may wonder—what exactly does a planning department do? What is it that they are planning? Sometimes it seems as if everything in an area has already been earmarked for something, so what is there left to plan?

This department serves to map out what happens in the unincorporated part of Madera County. They oversee land use to ensure that is falls within zoning regulations. This means that a huge superstore cannot just come in to build their next location in an area that has been slated from residential use only.

Not only do they have to look at zoning, they must consider traffic flow and other factors that will affect the area once a new structure is built or whenever an element is added or taken away from a neighborhood.

When someone needs a building permit—this is where they do because the planning department reviews and approves these permits.

They issue zoning and conditional use permits and they are the ones who call people to task when they misuse these permits.

The planning department has charge over are programs that have been adopted at the state level. These programs cover areas like affordable housing, surface mining and land conservation.

Plan to return on Thursday to read more about the work of this department.

Earlier this year the developers of the Running Horse complex in Fresno declared Chapter 11 bankruptcy. They owed millions of dollars to their creditors and faced lawsuits.

Donald Trump showed interest in the property, but negotiations stalled over the summer.

Just yesterday the Fresno city council had a special meeting with the mayor to go over the mayor’s proposed plan for partnering with Trump. The vote was unanimous: the city will go ahead with the plan. There will be another vote in December to iron out more of the details.

There was some concern that the deal would be too risky for the city, but in the end, they decided to go for it. Trump will buy the majority of the property, leaving the city to procure the rest.

As I’m sure you know, the Trump brand is strong and Donald Trump has holdings all over the world. A deal with his company could really be a big boost for the area.

Jack Nicklaus and Jack Nicklaus II helped to design this gem of a golf course that sits on 220 acres. The course was planned so that the holes would challenge and the surrounding scenery would enchant. The complex includes a set-up to host elegant weddings and parties. Of course nobody wants to see such a beautifully appointed natural space go to waste.

Donald Trump appears to have his eyes on the central valley and Running Horse may be the perfect development in need of such a name and reputation. The failed Running Horse development was auctioned off this last week and purchased by La Jolla Loans whom originally financed the project. The City of Fresno will negotiate the purchase of Running Horse and would like to sell it to Donald Trump. Mr. Trump is now in process of organizing his team to build and complete the project. I am excited to hear of the Trump organization showing an interest in the Central Valley and hope to see Mr. Trump show an interest in future developments in Fresno and Madera Counties. To keep up to date on this development and for information on how to purchase a Trump property in Running Horse just visit this blog regularly for the latest news and information.

Madera County has a growing economy, strong agricultural base and strongly growing manufacturing/industrial sector. Job prospects are good in Madera County. The county’s unemployment rate has steadily decreased over the past several years and currently stands at 7%. The labor force has posted a 13.8% gain over the last 5 years.

While nearly a quarter of the county works in agriculture (22%), government (20%) and education/health services (20%) are expected to provide significant job growth over the next decade. Industrial employment has increased by 20.7% in the past 5 years. By 2020 manufacturing jobs are expected to increase by another 50%. Job gains are expected in agriculture, government and natural resources such mining and construction. The county’s increasing population is expected to drive significant economic growth in a wide range of goods and services.

Industrial sites in Chowchilla and Madera City now offer 50-acre industrial development sites in centralized industrial parks. The county has zoned more than 2,000 acres in four county areas for light and heavy industry, all with rail and highway access. Plentiful workers, a low wage base, a generally non-union area with minimal strike history make Madera County an idea place to locate your business or manufacturing plant.

Madera County is already home to more than 100 manufacturing and processing plants that produce wine, glass bottles, cardboard boxes, fiberglass insulation, olives, printing, dairy products, plastic and concrete pipe, cotton products, construction and building products, machinery, sprinklers, lumber, corn, grain and many other food items.