July 2009


Vacation (GogGos) and I REALLY needed this one.  Hope everyone is doing well.

Things are moving fast and furious.  So we are going to start consolidating multiple references into one post.  Let us know what you think.

Budget Woes

It appears as though California continues to slide rapidly toward oblivion

Tough Sales

Pair this with a recent article stating almost exactly the same thing WRT the Napa Valley and you have a Fall 2009 appearing as though there will be a multitude of bankruptcies in the vineyard business.

Green Shoot!?@@?#?

Why does California continue to crush the hopes and dreams of the “talking heads” at CNBC.  Hopefully, they will realize the error of their ways and do some honest reporting.

Dreams Crashing

Would anyone believe that the Napa County Assessor insists that the High End market in the north end of the Napa Valley has moved laterally (ie-no change higher or lower) in the past year????  Can you feel the wave of appeals that are going to be submitted once reality and fantasy collide???  We are certain a similar trend is occurring in Sonoma County and does not bode well for the amount of money the state is going to be “removing” from our local cities and towns.

Cheers!

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Movin’ On Up (50 Cent).  No way we are touching the Jefferson’s theme!!

We think it is important to note when data is improved in order to provide a more honest assessment of current conditions as well as a projection into the future.

Shorty!

Why would Sacramento real estate trends be of interest to us in the Wine Country?  To quote: “This is just a reminder – with 70% distressed sales, there will be few move-up buyers for the higher priced areas.”

Guess what location represents one of the “higher priced areas”?

Hopefully we will see reporting like this throughout the State of California.

Double the pain (Heaven & Hell).  Thrash!!

Just for fun, we thought we would post a couple of discussions WRT California’s ongoing budget crisis.  Not directly related to the Wine Industry except for the fact it will dramatically reduce the volume of people visiting the area from the surrounding areas.

IOUs, we love them

Talk about selfish.  Take a look at how the IOUs are being distributed.  Guess the legislature is getting there’s no matter what!!

I’m getting paid!

The comments on this discussion are fantastic.  We love how the people of California will deny a train wreck until they are run over.

Stand or Fall (The Fixx).  One song from the “pretty boys”!

Exactly what services will the State of California be able to provide when all is said and done???  Personally, we have been watching quite a few episodes of “Little House On The Prairie” in anticipation of a reversion “back to basics”.

Property Tax Collapse

We are waiting for someone to provide some research WRT those individuals in the high-end market (hello, Wine Country!!) who still cannot afford their property taxes even after the reductions noted in the article.  We are anticipating a LOT of abandoned homes in the Thanksgiving 2009 time frame.

Say your prayers.

PS-Read the comments after the article.  They are fantastic.

I want candy! (Bow wow wow).  Teenage fantasy!!

We love Andy Beckstoffer, primarily because he makes the Wine Industry so simple.

In 1975, Beckstoffer started the Napa Valley Grape Growers Association with a primary goal being to organize and help develop pricing strategies collectively.  Grape growing just wasn’t profitable as wineries controlled negotiation, so producers were getting out of the market.

He recommended basing the price of a ton of grapes on the future price of a bottle of wine.  According to his Web site, “Under his bottle price formula, wineries projected the retail price of the finished wine and agreed to a standard multiple for each grape variety.  If a winery planned to price a bottle of cabernet sauvignon at $10, and the standard multiple of that grape was 100, the price of the grape would be $1,000 a ton.”  Mondavi and Christian Brothers quickly adopted the formula, and grape growers were essentially back in business.

We sure hope this theory has gone by the wayside in the last couple of years.  If not, bottle prices and, by association, land prices are in for a rude awakening.

Unsold Grapes

Just for kicks, use the Beckstoffer formula on the new pricing for a ton of grapes to compute the future cost of your favorite bottle of wine.  Bet you can anticipate a bargain!!!

Jump On It (Sir Mix-a-lot).  Word!

Here is an extension of the WSJ article discussing the fate of the Wine Country.

Luxury Fever Cools Off

Wrap It Up (Fabulous Thunderbirds).  Old school (bald guys rock)!!

FINALLY, someone is flat out saying the Wine Country will follow the rest of the economy into the worst recession since the Great Depression.

Listen people, trouble is coming and it will be long-winded and incredibly painful.

Luxury Wine Market Reels

We have been presenting discussions of the various economic components as well as some insight into how they might affect the Wine Country.  This appears to be the first article “admitting” the “bottom may fall out”.

Make sure you include the comments after reading the article.

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