February 2016

February 2016
It’s a Wrap!
To paraphrase Charles Dickens, it
wasn’t the best of times, it wasn’t the
worst of times. 2015 ended just in time,
not with a bang, but a whimper. As
forecast, December sales volumes for
the region spiked up 24% over November
pulling the year up 9% over 2014
( 9,932/10,916) and a scant 1% ahead
of 2013 (10,764). Median price also
bumped up for the region by 1%, moving
the needle enough to finish the year
6% ahead of 2014 ($300,111/$319,103).
Revenue from single family real
estate transactions contributed a hefty
$3.5 billion dollars to local revenue
streams in 2015, a 15% increase over
the $2.9 billion in 2014. 560 condominium
sales added another $116 million.
We’ve clawed our way back pretty
well from the sales bust of 2007 when
we only sold 5,640 homes. As a region,
we’ve still got a ways to go to catch
our best ever year in 2009 when 15,835
homes sold. Our regional median price
has also recovered nearly 37% from
our 2009 trough ($201,264/$319,103),
though we’re still nearly 30% off our
2006 peak ($448,894). Some cities have
fared better than others with Temecula
pulling within 17% of its peak price
($449,651/$543,545).
So, now we’ve got another year behind
us, what’s next for 2016? Well, as
some prognostications surmise, we’re
in for more of the same - slow, steady
growth - maybe a little slower than
2015. UC Riverside’s Chris Thornberg
claims “the roller coaster ride is over…
there will be no big surprises in 2016.
We’re nowhere near the top of the
cycle. This market has a ways to go.”
CoreLogic Chief Economist Dr. Frank
Nothaft says “…home price growth
remains in its sweet spot.” NAR’s Dr.
Lawrence Yun is also on board with
increases in the 5%-6% range for 2016
with sales climbing back to pre-recession
levels.
We’ll know in the next 90 days if
these positive vibes actually play out
against a less certain backdrop. At the
national level, with manufacturing off
significantly last quarter, will the US
continue to add jobs at a rate that inspires
consumer confidence and support
home buyers? And will that finally be
reflected in a GDP closer to 3% than
2%? The Fed is expected to continue
ratcheting up rates for the next 12-18
months assuming everything doesn’t
grind to a halt in the meanwhile. At
some point that will start impacting
mortgage rates. Health care costs have
already jumped, offset to some degree
by falling gas prices. And, what of the
THE VALLEY BUSINESS JOURNAL
www.TheValleyBusinessJournal.com
economists who caution that we are
entering the seventh year of our economic
recovery cycle which tend to
cycle every 6-8 years? Internationally,
what happens if the Mid-East continues
to conflagrate and gas prices jump?
What happens if the EU disintegrates,
or Europe’s economy continues to falter
under the onslaught of refugees and
China’s economy tanks?
Closer to home, we are dealing with
a shrinking housing inventory, declining
affordability and a political climate
that is discouraging home building. A
recent study conducted by Chapman
University’s Center for Demographics
and Policy pointed out a number of
concerns about our housing market.
California’s rate of issuing building
permits per 1,000 residents is 2.2. Los
Angeles issues just 1.7 permits per
1,000 and the Inland Empire comes in
at 2.3. Contrast this to the Dallas-Fort
Worth area where the average was 6.3
permits and the number of permits
issued was roughly double the number
for Los Angeles-Orange County, which
boasts nearly three times the population.
As I’ve cautioned before, our housing
shortage in California is reaching
crisis levels. Regulatory, environmental
and infrastructure issues restrict our
ability to build and limit the affordability
of the products we do build – even
in our area. Joel Kotkin, an R.C. Hobbs
Presidential Fellow in Urban Studies at
Chapman University recently pointed
out, “Progressive housing policy – so
...our housing market was better in
2015 than 2014, prices have been
appreciating in a moderately
sustainable fashion for 4 years...
beloved by our political leaders – turns
out to be very regressive, indeed.”
Assuming that millenial buyers enter
the housing market at some point,
even if it’s just multi-family housing,
the demand for a rare commodity will
skyrocket, affordability will be further
reduced and we enter another cycle
of housing bust before we even fully
enjoyed a boom.
Oh well, our housing market was
better in 2015 than 2014, prices have
been appreciating in a moderately
sustainable fashion for 4 years, the
recovery, though anemic, appears to be
continuing and we’re getting some rain.
No use worrying about things we have
no control over and you’re reading this
so you didn’t win the Powerball either.
Have a great year.
Gene Wunderlich is the Government Affairs
Director for Southwest Riverside
County Association of Realtors. If you
have questions on the market please
contact me at GAD@srcar.org or to
keep up with the latest legislative and
real estate trends go to http://gadblog.
srcar.org/.
Someone Broke Into My House –
NOW WHAT?
by by
Laurel Steve Fillingim Miller
Burglaries fall into the category of
things you think only happen to other
people. But what if one day you come
home from running errands to find the
window in your back room shattered
and many of your expensive belongings
missing? What should your first
steps be? How do you handle this
emergency and restore home security
quickly? Here are the steps you
should take if someone ever breaks
into your house.
Call the Police - First things first
- call the police and file a report. This
puts the incident on record, which
is necessary if you want to make an
insurance claim. Having the police
take a look at your property is also
important for potentially tracking
down and prosecuting the burglars.
To increase the chance of successful
prosecution, don’t touch anything
that could destroy evidence before
the police arrive.
Be prepared to provide the police
with a written description of everything
that was taken and each item’s
approximate value. If you saw anyone
suspicious on your property when
you arrived home and discovered
the break-in, provide the police with
a description of the person and what
direction you saw them leaving your
property.
Call Your Insurance Company
- Call your homeowner’s or renter’s
insurance provider within 24 hours to
begin the claims process as quickly
as possible. To increase your potential
claim amount, provide the insurance
company with the same written description
you gave to the police with
as many details as possible. A claims
provider may come to your home in
person to assess the damage and make
sure your claim is valid.
Watch Security Footage - If
you have security cameras, watch the
25
footage and provide it as additional
evidence of the break-in to the police
and your insurance company. Use the
footage to help you determine where
your home’s security weaknesses are.
This can help you make changes to
increase security and prevent a future
burglary.
Clean Up - Once the police and
insurance company have received
proper documentation of the incident,
it’s time to clean up the mess the burglar
left behind. The most important
step is to seek emergency board up
services until you can have a replacement
window installed. Boarding up
broken windows prevents your home
from being a repeat target during this
vulnerable time.
This is also the time to clean up
items that are strewn about and mop
up muddy footprints from the floor.
The sooner you can clean up signs of
the break-in (following the necessary
collection of evidence), the sooner
you can move past the incident.
Improve Your Home’s Security
- You’ll find that being the victim
of a break-in is about more than just
having a few belongings stolen; it
can also leave you feeling violated
and vulnerable. In addition to letting
time heal you emotionally after this
traumatic event, you should also take
steps to ensure it will never happen
again.
Purchase new door and window
locks, put in motion-sensor lights at
the front and back door, and install
security cameras (or even dummy
cameras to scare would-be burglars
away). A home security system also
provides excellent peace of mind.
Even a sign declaring “Beware of
Dog” in the yard – regardless of
whether you really have a dog – can
prevent thieves from risking an attempted
break-in.
If your home was recently burglarized,
we understand how vulnerable
you feel right now. Begin to put
the pieces of your life back together
by counting on Glass Doctor® for
emergency board up services. Please
contact us at (951) 894-5710 today to
learn more.