May 2017

May 2017
THE VALLEY BUSINESS JOURNAL
www.TheValleyBusinessJournal.com
27
Badoooooinnnng! (Thanks to Don Martin)
by Gene Wunderlich
That’s the sound of our housing
market bouncing back! (Sometimes a
newsletter needs sound effects.) Last
month I doubted we’d come anywhere
close to the March 2016 uptick of 30%.
But defying the constraints of shrinking
inventory and demand, sales actually
rebounded a whopping 32% last
month, leading to the best 1st quarter
performance since 2013.
Sales volume was up 4% Q1
2017 over Q1 2016, and just 23 units
shy of 2013 (2.457 / 2,434). Pending
sales were up also 11% in March so
April sales volume should reflect that.
Homes are flying off the shelf after just
39 days on market across the region
with days-on-market at a month or less
in several cities.
Median price actually dropped
month-over-month in March by about
1% ($342,977 / $339,161) but still
4% ahead of last March. Q1 median
was up 7% over Q1 2016 ($314,624
/ $337,422) and up 41% from 2012
($200,001). That’s good. 7% a year
is good.
Lack of inventory continues to
be a problem plaguing the region, the
state and the rest of the country. Our inventory
was down again last month but
very nominally (1,597 / 1,549), but off
22% from a year ago (1,982). You’d have
to go back to February of 2014 to find a
lower month. Our inventory is down to
1.7 months across the region. That inevitably
constrains sales and contributes
to escalating prices. The good news is
that 67% more homes were brought to
the market in March than in February.
1,331 new listings last month was nearly
25% more than January and February
combined. That not only met increased
sales demand, but left a little cushion
such that absorption dropped under 100%
in March, down 39% from February’s
121% to 74%. That means we weren’t
cannibalizing every new listing as it
entered the market, allowing inventory
to grow a bit (maybe) in April.
Most prognosticators still have high
hopes for housing for at least the next
couple years, some more, some less.
We’ll probably know more about the
housing agenda in DC when we go back
next month. Some things look promising,
others, not so much. We are hopeful that
this administration will recognize the
need for regulatory and lending reform
that will allow and/or encourage more
people to enter the housing market and
stimulate the need for more construction.
Probably won’t help California much but
maybe the rest of the country.
After all, housing is generally the
flywheel that gets the economy moving.
While we have technically been out of
the recession for the past eight years,
housing construction and homeownership
rates have fallen precipitously.
Homeownership stood at just 63.7% in
Q4 2016, down from a peak of 69.2% before
the boom. As a result total spending
on housing declined to 15.6% of GDP
compared to a 60 year average of 19%.
As each new single family unit typically
creates three jobs as well as demand
for ancillary services like appliance
purchases, home renovations and jobs
for Realtors®, escrow, title, lender and
other services and products, the stifling
regulatory climate of the past eight years
has had a profoundly negative impact on
the housing sector and kept economic
growth at a somnambulous pace.
Some experts argue that our default
rate is actually too low. While not advocating
a return to the lending licentiousness
of a decade ago, just 5.1% of
mortgages are at risk of default today
compared to a historic run rate of
12%. This indicates that lenders aren’t
making loans to thousands of people
who pose little risk, depriving many
middle-class families of the equity appreciation
the market has enjoyed the
past five years and forcing more Americans
into the rental market – which is
pushing rents ever higher as well.
Then again, if we had all those
extra buyers running around and no
houses to sell them... Is there a happy
middle ground anywhere?
Gene Wunderlich is Vice President of
Government Affairs, Southwest Riverside
County Association of Realtors.
(951) 205-1911 http://srcar.org/
After all, housing is generally the
flywheel that gets the economy
moving
Temecula Valley Hospital Earns “A” Grade
CONTINUED FROM PAGE 1
“We are very pleased that this is the
second time we have received the A rating
from Leapfrog,” said Darlene Wetton,
CEO, Temecula Valley Hospital. “This
demonstrates our commitment to the
safety of our patients and the diligence
of our staff in continuing to uphold the
same high standards of care.”
Hospitals that earn top marks nationally
in the Leapfrog Hospital Safety Grade,
‘have achieved the highest safety standards
in the country,” said Leah Binder, president
and CEO of The Leapfrog Group. “That
takes commitment from every member of
the hospital staff, who all deserve thanks
and congratulations when their hospitals
achieve an ‘A’ Safety Grade.”
Developed under the guidance of
an Expert Panel, the Leapfrog Hospital
Safety Grade uses 30 measures of publicly
available hospital safety data to assign
A, B, C, D and F grades to more than
2,600 U.S. hospitals twice per year. It is
calculated by top patient safety experts,
peer-reviewed, fully transparent and free
to the public.
To see Temecula Valley Hospital’s
full grade, and to access consumer-friendly
patient tips for
staying safe in the hospital, visit
www.hospitalsafetygrade.org.
About the Leapfrog Group - Founded
in 2000 by large employers and other
purchasers, The Leapfrog Group is a
national nonprofit organization driving
a movement for giant leaps forward in
the quality and safety of American health
care. The flagship Leapfrog Hospital
Survey collects and transparently reports
hospital performance, empowering purchasers
to find the highest-value care
and giving consumers the lifesaving
information they need to make informed
decisions. The Leapfrog Hospital Safety
Grade, Leapfrog’s other main initiative,
assigns letter grades to hospitals based
on their record of patient safety, helping
consumers protect themselves and their
families from errors, injuries, accidents
and infections.
About Temecula Valley Hospital
- Temecula Valley Hospital brings
advanced technology, innovative programs,
patient centered and family
sensitive care to area residents. The
hospital features 140 private patient
rooms; 24 hour a day emergency care;
advanced cardiac and stroke care in
clinical collaboration with UCSD Health;
orthopedics; and general and surgical
specialties. For more information, visit
www.temeculavalleyhospital.com.
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“This demonstrates our commitment to the safety of our patients and the
diligence of our staff in continuing to uphold the same high standards
of care.” ~Darlene Wetton, CEO, Temecula Valley Hospital