The Other Orange County

(page 3 of 3)

Filling those buildings will be tough, since new jobs are hard to come by. Bill Spitalnick, an appraiser who worked at both Ameriquest and Fremont, says he sent out résumés to every lender he could think of in Orange County and never even got a call back. He says most of the people he knew in the business aren't working (BusinessWeek.com, 3/26/08) and are, like him, living for the most part off their savings. He now spends much of his time writing letters to the editors of local publications. "It's going to get worse before it gets better," Spitalnick says. "It just started out small, and now it's affecting the whole world."

Scott Simon, who heads housing industry analysis at Newport Beach-based money management firm Pimco, recently sold his home with a view of the ocean in nearby Laguna Niguel. He was surprised that the property got several offers and went for close to his asking price, to a European buyer. "Good properties are still trading at pretty good prices," he says. "You come apart from the worst first."

Looking to Washington

Still, Simon says he's renting for now. It's cheaper than owning, and he thinks lower prices lie ahead, particularly if government support for the housing market wanes. Housing, he says, is "the single most important thing in the economy right now."

Former home industry workers who have managed to find new jobs often have had to rethink their profession. The nonprofit Fair Housing Council of Orange County, which normally mediates disputes between tenants and landlords, recently hired a former real estate agent to negotiate with lenders to keep troubled borrowers in their homes.

In Anaheim, Mayor Curt Pringle had consultant Richard Florida speak to local officials on how to attract a new "creative class" of jobs to the city. He also hired J.D. Power & Associates (like BusinessWeek, a division of The McGraw-Hill Companies (MHP)) to evaluate the performance of municipal services to help the city attract new businesses and residents.

Lucy Dunn, chief executive of the Orange County Business Council, a sort of Chamber of Commerce, was in Washington this week to drum up funding for housing, infrastructure, and education initiatives in the county. Dunn says she is fighting stereotypes, fostered in part by television shows such as The O.C. and The Real Housewives of Orange County. In fact, the county is now more than 30% Hispanic, and some of the areas hardest hit by the housing downturn are in less wealthy Orange County cities located inland, like Santa Ana and Fullerton.

"There's a misperception that we're a bunch of white, rich beach lovers," she says. "The reality of our demographics and economy belies the myth."

Palmeri is a senior correspondent in BusinessWeek's Los Angeles bureau .