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California households are doing without

Many Californians say their personal fortunes haven't recovered from the recession. A Times/USC Dornsife Poll shows that they're cutting household expenses, avoiding extras and forgoing home improvements.

July 23, 2011|By Alejandro Lazo, Los Angeles Times

The Delgado family is putting off plumbing repairs to their San Marcos home. Estela Saucevo's teeth hurt, but she's trying to avoid a costly trip to the dentist. Teachers William and Kathy Jones, struggling with pay cuts, are getting by without the little extras they used to enjoy.

"No date nights, no vacation — no nothing, unfortunately," said William Jones, 59, an automotive instructor in Riverside County.

The recession may be technically over, but many Californians say their personal fortunes have yet to recover or have taken a turn for the worse. A new poll shows they are coping with hard times by cutting household expenses, skipping restaurant meals and forgoing home improvements.

"I am scared, to be honest," said Celia Delgado, 36, one of the people surveyed for The Times and USC's Dornsife College of Letters, Arts and Sciences. "I am scared that my husband might lose his job and I might lose my job, and we might be homeless."

The poll found that 37% of Californians were cutting back on household expenses such as groceries and gasoline, while 52% were forgoing luxuries such as concerts and restaurant meals, in order to make their mortgage payments.

And with home prices weak, the poll found that 31% of the more than 1,500 California voters surveyed had put off looking for or buying a new home — and that 50% had set aside investing in home improvements.

Both of those trends are sobering reminders of how hard it will be for California to escape the grip of the devastating economic downturn. Housing has traditionally fueled recoveries, but tepid demand for homes — and even home improvements — is crimping the creation of new jobs in construction and real estate.

On Friday, California reported that construction payrolls decreased by 1,100 jobs in June, following a drop of 5,000 in May. Compared with June 2010, construction sector employment has hardly budged: It's up only 7,800 jobs, or 1.4%.

"The concern is that many of these jobs in California are not coming back anytime in the near future," said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. "Without those related jobs through residential real estate, we are finding it very difficult for the California economy to recover."

To save money, Celia and David Delgado are taking their five children to visit family in Mexicali, Mexico — and putting off that trip to Disneyland they wanted to take. And forget about paying fees for youth soccer leagues; pickup games with other kids in the neighborhood will have to do.

Jones, another person who participated in the poll, said he and his wife, Kathy, 56, a public school teacher, endured sizable pay cuts over the last year and were fighting to make ends meet.

Their home in San Jacinto, near Hemet, is assessed at less than half the $392,000 that couple paid in 2006. And Jones said they still owe a little more than double the property's current value, putting them, like many Californians who bought in inland areas during the height of the boom, deeply "underwater."

Although the Joneses have not missed a single mortgage payment, they buy fewer groceries, run the air conditioner less and have skipped some utilities payments. The couple rely on a home garden for vegetables and often cook meals they can stretch for two to three days to spend less on food.

"We are looking over the edge," Jones said, "and we are just hoping something don't come from behind and push us over."

They're set on keeping their four-bedroom, three-bathroom house on a suburban street ravaged by foreclosures and steep price declines, he said, because they do not want to wreck their credit history and because Jones' elderly parents live with them, and he needs to keep a roof over their heads.

Richard Green, director of the USC Lusk Center for Real Estate, said California homeowners are likely to make big sacrifices to hold on to their houses for a variety of reasons, even when they owe far more on their mortgages than the value of their properties. They may not want to realize the loss, and they could be concerned about their credit histories, he said.

"People who put down payments on homes — they tend to not walk away because they just don't want to swallow the loss," Green said. "There are also people who feel responsible for paying their bills."

The poll was based on a survey of 1,507 registered voters in California from July 6 through 17. It was conducted by Greenberg Quinlan Rosner, a Democratic firm, and American Viewpoint, a Republican firm. The margin of sampling error is plus or minus 2.52 percentage points.

Overall, 73% of respondents said the economy wasn't improving, compared with 67% in an April poll.

In the latest survey, 16% said they had lost a job in the last year, and 25% had seen a reduction in wages or work hours. A total of 17% of respondents said they or someone in the household had been forced to downsize their living arrangements or relocate.

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