* Economy suffers as homeowners in area lose $2 billion in wealth in '07.
Take $2 billion away from Sacramento's homeowners – money they could be spending on cars or plasma TVs or kitchen cabinets – and you begin to understand what the housing slump is doing to the region's economy.
The impact of the real estate downturn goes far beyond the thousands of construction and mortgage- industry layoffs, or the epidemic of foreclosures. The 25 percent drop in housing prices since 2005 means fewer homeowners are able to borrow against their equity. Even those who could still borrow are more nervous about doing so.
The result is a meaningful drop in housing's "wealth effect," making consumers less apt to spend money. Consumer spending is falling all over the country, not just in Sacramento, putting additional downward pressure on an economy that seems to grow more troubled by the hour.
The well is drying up, McMillionaires! You might actually have to pay cash for that vacation, or that Escalade, or that Lexus, or that Flat Panel TV that your lazy, fat ass had to have. Consumer spending is going to plummet, along with the stock market.
Should have saved some money, cuz things just might get ugly...