We've been out making hay for a couple of months, but June is unexpectedly slow.  If it is any consolation, everyone else seems to be in the same boat.  The real estate cycle, and the associated development and construction, has really run out of steam.  This is likely to continue for a while.  Anyone who has a long enough memory knows that this has happened before, but our parents hard times achieve a mythic quality and do little to affect how we act.  The California Gold Country has experienced approximately 30-year cycles of speculation and real estate appreciation at least since the 1940's.  It is probably not coincidental that 30 years is generational, long enough for a young person to recognize short-term gain and take a financial risk.  The individual circumstances vary, and there are as many different stories around land ownership there are land owners, but as long as our economic structure represents capital and ownership, regular crashes and corrections are to be expected.

After WWII, there were huge disruptions in the local economy.  The price of gold was standardized and the major mines had been closed during the war.  Although many mines re-opened, production gradually declined, and real estate activity was sluggish.  One of my Nevada City clients bought his house and lot in 1949 for $400.  The same parcel resold two years ago for close to $400,000, but the rate of appreciation was anything but linear.  There was a big price run-up along with general prosperity in California during the 1960's, followed by a decade-long slump and falling land values.  My memory of Nevada City in 1978 brings to mind many closed and empty buildings, peeling paint and minimal employment opportunities.  The local economy at that time was still largely dependant on timber and small-scale mining and much of our surveying work was associated with these industries.  Surveying was largely seasonal and the field guys needed something else to do in the winter.

It looks like we're back there again.  Governor Schwarzenegger anticipates 2009 as being the year for a California real estate recovery (whatever that means), “We just have to wait until we grow our way out of the situation, and I think by next year, we will grow out of it,” Schwarzenegger said in an interview on NBC News program “Meet the Press,” but if history is any reflection on current trends,  hard times take their time.