March Realtor Update

21
With your host… Gene Wunderlich

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Transcript of March Realtor Update

Page 1: March Realtor Update

With your host… Gene Wunderlich

Page 2: March Realtor Update

“Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.”

Pericles: 500 B.C.

If you don’t have a seat at the table… You’ll probably be on the menu.

Wunderlich Codicil: 2000 A.D.

You may still be on the menu, but hopefully we can keep you from being the main course

2012 addendum

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• Federal Economic Policy • Regulations • Mortgage Interest Deduction • Strategic Foreclosures • Future of GSE’s

• Lenders • Short Sales • Foreclosures • Interest Rates • Inflation • Shadow Inventory • Global Economy • Unemployment

Unprecedented era of government involvement in housing

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YOU…

Are a Special Interest Group.

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NAR: The largest grassroots Political Action Group in this country.

"These groups are powers in Washington. The National Association of Realtors gave more money than any other group to candidates in the last election ($11+ million). Its 1.1 million members can do a lot of lobbying."

CAR: The most effective business advocacy group in Sacramento.

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Red State? Blue State? Under all is the land…

Realtor® Preamble

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The Realtor® Home Washington D.C.

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May 2012 12,000+ Realtors® Rally for the American Dream

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Temecula Murrieta Lake Elsinore Menifee Wildomar Canyon Lake

Southwest California Homes Single Family Homes

Unit Sales

February transaction volume: Temecula $42,713,976 Lake Elsinore $15,516,176 Murrieta $41,612,059 Wildomar $7,389,053 Menifee $23,619,849 Canyon Lake $6,132,500

Temecula 145/120 Lake Elsinore 92/72 Murrieta 174/129 Wildomar 46/30 Menifee 125/120 Canyon Lake 26/20

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$0

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3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12

Temecula Murrieta Lake Elsinore Menifee Wildomar Canyon Lake

Southwest California Homes Single Family Homes

Median Price

January’s median price was up 19% over last January ($217,924/$262,930) February’s was up 14% over last year ($237,842/$274,353)

highest median price we’ve seen for the region since August 2008 when our median price dropped through $280,662 on its way to our low of $210,317 in April, 2009. We’re up 23% from there. Temecula up 21% $(279,009/$355,950) 3/08 Lake Elsinore up 17% ($179,136/$215,502) Murrieta up 19% ($261,199/$322,574) 4/08 Wildomar up 17% ($205,941/$246,302), Menifee up 14% ($171,6245/$199,165) Canyon Lake down 7% ($330,140/$306,625) So you don’t lose perspective, even with the recovery of 26%, at $355,950 Temecula is still 38% under its peak of $575,935 (6/06) and at $322,574 Murrieta is still 44% below its peak of $576,224 (5/06).

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Southwest California Inventory

-72%

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On Market (Supply) Pending Closed (Demand) Days on Market Months Supply Absorption rate *

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Murrieta Temecula Lake Elsininore Menifee Canyon Lake Wildomar

* Absorption rate - # of new listings for the month/# of sold listings for the month

Southwest California February Demand Chart

February 2012 • 2,240 homes for sale • 561 homes sold • 3.3 months supply • 87 days on market • 110% absorption rate

February 2013 • 617 homes for sale • 491 homes sold • 1.4 months supply • 57 days on market • 201% absorption rate

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February Market Activity By Sales Type

Standard Sale Bank Owned Short Sale

Active % of MKT Sold

% of MKT Active

% of MKT Sold

% of MKT Active

% of MKT Sold

% of MKT

Temecula 163 88% 80 67% 8 4% 10 8% 13 7% 28 23% Murrieta 133 86% 79 61% 9 6% 13 10% 10 6% 31 24% Wildomar 13 81% 14 47% 1 6% 3 10% 2 13% 12 40% Lake Elsinore 63 72% 40 56% 8 9% 9 13% 17 19% 22 31% Menifee 76 70% 69 58% 16 15% 17 14% 14 13% 27 23% Canyon Lake 58 89% 16 80% 2 3% 2 10% 5 8% 2 10%

Regional Average 506 81% 298 61% 44 8% 54 11% 61 11% 122 25%

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California US CA Price Trend

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Total Population, California

Number of Households, California (right axis)

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CA Prices Still Below

Trend Line = Opportunity

Pent-Up Demand

for Housing is

Real

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California Housing Market Outlook

Indicator 2008 2009 2010 2011 2012p 2013fSFH Resales (000s) 441.81 546.86 492.29 497.86 523.25 530

% Change 27.3% 23.8% -10.0% 1.1% 5.1% 1.3%Median Price ($000s) 348.5$ 275.0$ 305.0$ 286.0$ 317.0$ 335.0$

% Change -37.8% -21.1% 10.9% -6.2% 10.9% 5.7%

30-Yr FRM 6.0% 5.1% 4.7% 4.5% 3.8% 4.0%

1-Yr ARM 5.2% 4.7% 3.5% 3.0% 2.8% 2.8%

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Signs of U.S. Housing Recovery

Prices have bottomed! Home equity up 20% last year to

$7.71Trillion as rising prices begin to reverse negative equity

New and Existing Home Sales at four- year highs

Low inventory across the board Housing starts at four-year high Threat of shadow inventory fading as

delinquencies, foreclosures decline Foreclosure starts at 6 year low

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The Political Economy

• Fiscal Cliff Averted but Tax and Spend Decisions Await – 60 Day Deadline

• Tax Reform: •Mortgage Interest Deductibility •Mortgage Debt Forgiveness

• Future of Fannie and Freddie • Future of FHA

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SB 176 (Galgiani) Regulatory Notifications - C.A.R. is sponsoring SB 176 to promote transparency in the regulatory notice process. Current law requires regulatory bodies to post meeting notices and public reports on their websites. This bill will additionally require state agencies, boards and commissions to re-publish these meeting notices in a single location. Specifically, this bill requires state agencies, boards and commissions to post information related to informational hearings, workshops, scoping hearings, preliminary meetings, public and stakeholder outreach meetings, 15-day comment period notices and website links to public reports at least 15 days prior to any scheduled meeting in the California Regulatory Notice Register.

AB 429 (Daly) Retention of DRE Staff - In 2012 Governor Jerry Brown's government reorganization plan was approved, which, among other things, moved the Department of Real Estate (DRE) to Consumer Services Agency, effective July 1, 2013, under the Department of Consumer Affairs (DCA). C.A.R. initially opposed this measure out of concern that DRE would: 1) lose its regulatory, enforcement and legal staff; 2) forfeit its operating reserves to the General Fund; and 3) lose some measure of its influence in government. C.A.R. moved to a support position after receiving assurances from the administration, confirming that the DRE will: retain its regulatory, enforcement and legal staff; maintain its fiscal independence and; its influence with the retention of a "Commissioner" as opposed to a Bureau Chief. C.A.R. is sponsoring AB 429 to make it clear in the law that DRE is to retain its regulatory, enforcement and legal staff.

SB 30 (R. Calderon) and AB 42 (Perea) Debt Forgiveness Income Tax - The federal government enacted the Mortgage Debt Relief Act of 2007 creating mortgage debt forgiveness relieving borrowers from income tax liability on debt forgiven in a “short” sale. In late 2008 the federal government extended this relief through December 31, 2012. This rule, which has been extended several times in both federal and conforming California laws, expired on January 1, 2013. On December 31, 2012, Congress passed budget solutions in an attempt to avoid the "fiscal cliff." Included in that measure was an extension of the mortgage debt forgiveness sunset date to January 1, 2014. C.A.R. is sponsoring SB 30 and AB 42 to make conforming changes in California law effective January 1, 2013.

CAR 2013 – 2014 Legislative Agenda

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Join me in Sacramento for Legislative Day Wednesday, May 1st

Enjoy Reserved seating at:

• Breakfast with the City Managers

• SRCAR Annual Meeting

• Luncheon & Reception with our leaders

• More good stuff

Invest $148 in YOUR Realtor Party today.