Even in Napa, housing crisis hits home

NAPA, Calif. – For many residents of one of the most storied valleys in the world, life is still a bowl of grapes. But beyond the picturesque vineyards and stonewalled estates, times are shaky, the future unclear.

Tourists sipping their way up the 30-mile valley from the city of Napa to Calistoga may never see this other Napa Valley. But this celebrated wine country is proof that there are few places in the nation left untouched by the housing crisis.

Beautiful Napa is experiencing foreclosures, plunging housing prices, unheard of drops in home sales and the nervous sense of foreboding that has spread across the country like a flu.

“I don’t recall anything like this, and the end is not in sight,” said John Tuteur, the Napa County assessor-recorder-county clerk, who has witnessed several recessions in the three decades he has served the county.

In the nine-county San Francisco Bay area, where home sales tumbled in January to their lowest levels in 20 years, Napa County suffered the sharpest drop of all – more than 55 percent from a year earlier, according to DataQuick Information Systems, a real estate research firm. In the same period, houses at any stage of foreclosure jumped by 152.9 percent.

What has happened in Napa mirrors what has happened all over, said Andrew LePage, an analyst at DataQuick. For prospective first-time home buyers, houses sprang up to accommodate their desire to own, LePage said, and mortgage brokers found ways to secure the buyers’ loans.

Not that little Napa County (population 134,000), which has some of California’s highest home values, is ready for bankruptcy. For now, the wine towns of Calistoga, Yountville, St. Helena and Rutherford, where starter homes cost more than $1 million, remain relatively unscathed; the worry in those towns is that the broader economic downturn will depress tourism.

But the city of Napa, the county seat and the largest population center with 75,000 residents, and its lesser-known neighbor, American Canyon, are where Napa’s working people live, and they are bearing the brunt of the housing crash.

American Canyon, known for the visitors center that is the usual first stop on the Route 29 wine trail, is a new town. It incorporated in 1992 and grew from 6,000 people in 1999 to more than 14,000 residents in 2007. But excitement over fast-sprouting single-family-home developments has given way to concern over unsold houses and languishing businesses.

“Everybody knows somebody whose house is in trouble,” said Larry Kudrna, a 40-year resident of American Canyon and former president of the city’s chamber of commerce.