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THE VALLEY BUSINESS JOURNAL 28 www.TheValleyBusinessJournal.com January 2017 Coasting into Year-End Your Local Chambers Temecula Valley Chamber of Commerce www.temecula.org Murrieta Chamber of Commerce www.murrietachamber.org Menifee Valley Chamber of Commerce www.menifeevalleychamber.com Lake Elsinore Valley Chamber www.lakeelsinorechamber.com Hemet/San Jacinto Valley Chamber of Commerce www.hsjvc.com See how the chambers can help your business. REAL ESTATE by Gene Wunderlich There’s a great quote from Martin Luther that more folks should heed. “Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree.” This nation has survived for 240 years through a progression of leaders, some great, others not so much. A look back at our history shows us many times that have been as tumultuous as these, some even more so, truly challenging times even within reaches of my memory. Yet to hear the hue and cry of some citizens, especially many of the younger ones, it’s apparent we do not have many students of history among us today. OK. That’s my rant on politics - let’s talk about housing. Last week we had the opportunity to sit down with National Association of Realtors Chief Economist Dr. Lawrence Yun and Fed Atlanta President Dennis Lockhart in Orlando to talk housing. The good news is – there’s no recession on the horizon! Some prognosticators are positing that we are due for another cyclical recession in the next year or two. Lockhart made light of the cyclical nature of recessions pointing out that there have to be underlying root causes to a recession, they don’t just happen for the hell of it every X number of years. And there are no underlying issues currently, no alarm bells. He sees continued moderate growth, somewhere in the 2% range, for the foreseeable future with modestly increasing interest rates combined with wider credit availability. Dr. Yun pointed out that the recovery has been so slow that there is still much room to grow without reaching a peak, and enough pent-up demand to fuel that growth. Demographic trends portend well for the long term. True, homeownership is at a 50 year low, mortgage applications are down, there is weaker buyer traffic than 6, 12, 18 months ago, and the volatility of health care costs has had an impact on some buyers, but his forecast is also for continued slow growth both in sales and median prices across the country thanks to ongoing job growth fueling pent-up demand. Our own market is echoing what other markets across the country are doing. While sales were down month-to-month, they remain 4% ahead of last year and we should finish the year up about that amount to around 11,400 units. After hitting a peak month with 206 sales in June, Temecula dropped another 30 homes from September to 143, their worst month since February. Murrieta sold nearly 30 more homes in October than September, but they too were well off their peak month of 243 sales in June. Menifee, Hemet and most other cities have experienced similar declines from a mid-year peak but should hold on to show a moderate increase over previous year sales. Median prices continue to ratchet upward but at a slower pace than mid-year. Median prices are up 4% year-to-date ($314,518 - $326,164) and should also end the year about that far ahead of last year. Temecula posted a slight drop in median price to $425,000 but thanks to a few well priced sales, their average price jumped to $499,368, their highest reach since December 2007 ($521,013). Median prices deviate from average prices by a small amount either positive or negative in most cities but drop a few $million+ homes into the mix and the average shoots right off the chart. In what is shaping up to be a major issue across the country, our inventory of homes continues to decline dropping 5% month-to-month and 10% year-over-year. And even though sales are slow, listings are even slower as absorption rates in most cities consumed 1.25 to 1.5 homes for every new one listed. Oh well, let’s see what affect a Trump presidency has on the market. Gene Wunderlich is Vice President of Government Affairs, Southwest Riverside County Association of Realtors®. “ He sees continued moderate growth, somewhere in the 2% range, for the foreseeable future with modestly increasing interest rates combined with wider credit availability
January 2017 THE VALLEY BUSINESS JOURNAL www.TheValleyBusinessJournal.com 29 PRICES Too High or Too Low? CONTINUED FROM PAGE 1 How the final price was determined is still a mystery. If the price strategy is too complex and customers are getting confused with all the offerings, they will likely look elsewhere in the future. Consumers want to feel they have power over of their purchasing and have received the best price possible. This is a large part of this control. Too many choices littered with addons, makes it difficult to arrive at a decision in a reasonable amount of time. Experts say that three or less options are best for consumer selection. Here are a few other hints for successful pricing. • Matching a competitor’s price point is important but customers need to understand how your company offers a higher value the purchase price. This can be accomplished by providing the right combination of items, availability and cost. • Advertise a “clean” promotion with no hidden fees or dependencies. Nothing feels more out of control than to see an advertised price and miss the fine print which states a purchase of a minimum quantity is required. Make sure the cost is clearly displayed whether at your store or online. • Consider more creative pricing promotions. For example, can you sell by service rather than by hour? When customers know the end cost of doing business they will tend to feel in more control. There is not perfect pricing model to follow. It’s a process and requires continuous optimization. But whenever possible, keep it simple and clearly defined. Ted Saul is a business coach that assists with Business Plans and Project Management. He holds a master certificate in project management and has earned his MBA from Regis University. Ted can be reached on LinkedIn, TedS787 on Twitter or emailing Ted@ tsaul.com. “ Too many choices littered with add-ons, makes it difficult to arrive at a decision in a reasonable amount of time. Experts say that three or less options are best for consumer selection Jeff Comerchero as New Chief of Staff CONTINUED FROM PAGE 1 Comerchero replaces Verne Lauritzen who is retiring after serving Washington, and previous Supervisor and now Senator Jeff Stone. Washington was appointed to Supervisor by Governor Jerry Brown in March, 2015. He easily defeated his opponent Shellie Milne, by 17.2% and over 25,000 votes. Washington and Comerchero served together on the Temecula City Council for over a decade. Comerchero will continue to serve on the Temecula City Council. “It’s important to note that a position on the city council is meant to be a part time, essentially volunteer, position. We do get a small stipend, designed to be sufficient to cover our out-of-pocket expenses,” Comerchero said about his role on Temecula City Council, adding, “I am in my 20th year as a Temecula council member and mayor. During that time, as with most city council members in most cities, I have maintained a full-time job.” “Jeff brings a wealth of experience and knowledge to the Third District Staff,” stated Washington about the appointment. Comerchero served as Temecula’s Mayor in 2001, 2005, 2010, and 2015, and Mayor Pro Tem in 2000, 2004, 2009, and 2014. A city council member since 1997, Comerchero also served on the Board of Directors of the Riverside Transit Agency from 2000 to 2005. He served as chairman and vice chairman of the city of Temecula’s Budget and Finance Committee. Comerchero’s responsibilities include working with the Third District staff to implement the policies and vision of Washington. “The Third District is the most beautiful region in Riverside County with open spaces, Idyllwild Mountain Communities, riding trails of Anza and beautiful wine country. In meeting with area leaders and local citizens it is clear that we all have common goals; to live in a safe neighborhood with good schools where our families can live, grow and learn; and to have good jobs that provide for our families. I am committed to protecting this dream, growing the economy, and making this the Thriving Third,” Supervisor Washington said. “During our 12 years together on the Temecula Council, I found Chuck to be totally dedicated to our constituents and effective in identifying needs. He’s carried those same qualities over to the Third District as the Supervisor. Having this opportunity to work side-by-side with him to improve the quality of life for the Third District residents and to bring economic development in all regions, is a rare opportunity for which I am grateful,” Comerchero added. The Third District encompasses four incorporated cities: Hemet, Murrieta, San Jacinto and Temecula, as well as the communities of Anza, Aguanga, Cahuilla, Idyllwild, French Valley, Mountain Center, the Pinyon Communities, Valle Vista, Sage, Soboba Hot Springs, and Winchester. Special events? Great sales? Exciting new products? Send us your business news via our Facebook page facebook/thevalleybusinessjournal
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