The Elephant Is Moving…..

June 28th, 2009 Categories: Weekly Real Estate Activity In Ventura County

cluelessEver so slowly the real estate is starting to move upward.

Politics will play a hand which will delay the acceleration of price movement but eventually the market will march to its own music. 

This upward movement is not only occurring in  Ventura County but is taking place throughout the United States.

For investors I am still recommending Oklahoma (Oklahoma City and Enid); Texas and I still recommend that one keeps an eye on Michigan.  I will go into more detail for investment properties in my annual review which will be available in July.

As can be noted in the Table below this past week was the first time in many months that listings have increasedin Ventura County.  Previously there was a steady decline.  This may be just an blip of an occurrence but  it stood out.

june272009weeklydata

As noted in this blog over the last several months prices are starting to creep upward.  Nothing  dynamic but the prices are solidifying the base that has been in effect since November, 2008. 

There will be some sideways price activity over the next several months but the worse is over.  In fact it has been reported recently that appreciation in Ventura County stands at 5.8% since the beginning of the year.  You will note on the chart above that one should expect an 8.7% increase for 2009.  In 2010 the appreciation will increase to 17.9%.

The two things needed for the real estate market to really explode upward are new job creation and a significant decrease in unemployment (neither of will happen for a few months).  Why?  Taxes and added government cost to employers via health care coverage.

There needs to be another element in play before real estate gets it legs and that is consumer confidence which at this time appears to be getting positive.

Posted by John Duffner | Currently No Comments »

Things Might Be Better Then…..

June 21st, 2009 Categories: Weekly Real Estate Activity In Ventura County

My musing for the week.

  

 

  • Noted in the United Kingdom were some large supermarkets in England are now getting into the banking business.  I wonder when that is going to come over to the States.

 

  • In an article read this week…..”Appraisals Roil Real Estate Deals” (Wall Street Journal, June 9, 2009 by James Hagerty and Ruth Simons)…..the authors note that very conservative estimates on homes is making refinancing and selling extremely difficult.   With banks now in charge of appraisals (per se) is akin to the fox acting as a guard in the chicken coop.  Home prices (at least for the time being) will be controlled by banks and not the market.  “Since the code bars loan officers, mortgage brokers and real estate agents from any role in selecting appraisers, this has encouraged lenders to outsource the selection to appraisal-management companies which take a sizable cut of the appraisal fee.  As a result, appraisers are under pressure to do it faster, do it cheaper (quote from article).”  And just watch what happens with multiple appraisals.  Multiple appraisals will take place if the buyer elects to switch lenders because of better deal.  It will be surprising to see if each appraisal comes in around the same value.  To minimize this cost the Mortgage Bankers Association is looking into the possibility to make the appraisal “portable” from one lender to another.  We shall see.

National Real Estate.

It appears that prices are starting to change direction….upward.  Still overall the market is still trying to get legs.  It is taking longer largerly due to high unemployment in some areas and the continued lack of new jobs creation.

Ventura County.

One word:  SLOW.  But prices are edging upward.  Overall sales in Ventura County are 28% higher (comparing periods Jan. 1 thru June 20 for the years 2008 and 2009).  Overall Ventura County is a seller’s market but there are areas such as Santa Rosa Valley, Ventura and Oxnard Beaches that still remain buyer markets.

The Conejo Valley and Ojai/Oak View remain neutral while the areas of Simi Valley/Moorpark, Ventura, Oxnard, Camarillo, Santa Paula and Fillmore are seller markets.  In fact there were no recorded sales in Fillmore over the last week which I find interesting (but not unusual).

Unemployment and job creation need to come into line for the real estate market to get legs.  It will go up on its own but very slowly.  Many people are staying put and waiting the market out.  The “squeeze effect”, as I call it. 

When the market gets legs, watch out. 

Posted by John Duffner | Currently No Comments »

There Are Bigger Things To ……

June 7th, 2009 Categories: Weekly Real Estate Activity In Ventura County

Every once in awhile it is time to get some perspective.  This photo from MSN puts things into some context.

There are bigger things for us to see, investigate and challenge.  Life here on Earth is great; out there who knows!  But we will go and find out.  Why?  We are humans and it is in our bones (oops! our DNA) to face up to challenges.

My musing for the week.  Lao-tzu who lived 2,500 years ago wrote “Every human being’s essential nature is perfect and faultless, but after years of immersion in the world we easily forget our roots and take on a counterfeit nature”.

That is state we are in today.  We have forgotten our roots.

The National Real Estate Market.

Things are turning good so says the late media coverage.  Change has been happening since November, 2008 but now constructive signs have emerged showing that things are on the upswing.

Looking at the most recent government view of the National real estate market one can see that the East coast and of course Nevada, Arizona and California continue to be under pressure.

Other States in the Central region also appear to be under some minor pressure.  States such as Nebraska, Kansas, etc., have declined but others such as Michigan, Illinois to name a few have shown signs of improvement.

The driver for a healthy real estate market is financing and the banks have been struggling on a number of fronts to get the real estate financing righted.  But it takes time.  The other thing that will help real estate is lower unemployment, new job creation and less help from Washington, DC.  When Congress gets involved all things fall apart.

When looking at the real estate market (first quarter of 2008) approximately one year ago every State has had a declined except for Alaska.  It is the only State that has shown appreciation throughout Country over the last year.

This is the 1st quarter, 2009 National Real Estate Market.  

 

This what the market looked like in fourth quarter of 2008.

 

This was the picture of the National real estate market in the 1st quarter of 2008.

Ventura County.

The squeeze continues.

Listings continue to decrease; sales are now decreasing; markets in Santa Paula and Oxnard show minimal inventory while the beach area show significant inventory. 

Fillmore, Santa Paula, Camarillo, Oxnard, Ventura and Simi Valley/Moorpark are now showing as seller areas.  One would expect to see prices starting to increase in these areas shortly.

The Santa Rosa Valley, Oak View/Ojai and the beach areas are buyer markets.  The Conejo Valley is neutral at this time.

Prices are showing signs of increasing.  As one can expect it appears that the lower end price range properties have been absorbed; there is some preliminary sales evidence suggesting that properties in the $ 400,000 to $ 750,000 are now attracting buyers.

The following table indicates some price upswing.  It is preliminary and a few more months are needed to show a trend but there is some evidence that price appreciation may now be taking place.

The monthly value % does note that the lost in home equity has started to decrease and compared to November, 2008, there has been a 50% increase in property values in the County.  Some will see this as a 50% decrease in the loss of property value but the bottom line is that the market has changed and November, 2008 appears to have been the bottom of the down cycle.

Now if unemployment and new jobs are created in Ventura County everything will be super great to have a significant advance.

I expect to see the growth rate following the chart below.  So hang on…..it is going to be a lot of fun.

As noted in the last illustration we are now entering into the gold run up.  We are certainly blessed to live in this area of the Country.  Ventura County home prices are set to explode.

There will be many people who will become millionaires from the real estate they purchased during the down turn.

Those that want to become millionaires should be buying now because if you don’t you will have to wait for another 10-12 years before the cycle starts again.

Comments are welcomed.

Posted by John Duffner | Currently 1 Comment »

We Got What We Wished For….It Isn’t Very Nice!

May 24th, 2009 Categories: Weekly Real Estate Activity In Ventura County

My musing for the past several weeks.

  • California voters (small number) decided enough was enough.  Politicians on the other hand have concluded that voters don’t know what they want so “enough is enough” probably won’t fly.  The next step is to replace the politicians.  We did that by replacing Gov. Davis a number of years ago basically because of increased DMV fees.  Well guess what….we not only have increased DMV fees but a lot of other fees.  We also have to manage the activities of the non-elected deal brokers. 

  • Is California going to be the 1st State to declare bankruptcy?

  • It appears that the brightest are leaving California.  It is also being talked about that our school system is in the toilet.  Funny how people outside of California have seen this, the general population has seen this but the politicians and teacher unions have not.  Hmmmm….a pause here.

  • I also see the blame game setting in.  A number of reporters are starting to say that the voters are the culprits for the problems in California.  The initiatives that have been passed over the last 10-20 years were not thought out by the voters who “want things but do not want to pay for them”.  Well part of that is true but what isn’t being said is that these same newspapers made recommendations which many voters followed.  Many voters think that newspapers are above the fray and make their recommendations based on what is good for society.  Well it’s the dumb following the dumber.

  • Ms. California stuck to her beliefs (whether you agree or disagree with her) which is a strength that many of us have given up.  Look at the current situation.  When the current administration speaks all others fall in line…..money is such a strong tool.  The only thing that is piling up higher is the BS we are getting from Washington.

  • Talking about blame game…..the Washington day time drama is a reality sage.  He said, she said!  Torturing….I didn’t know; I wasn’t told…..what are these people there for.  Lots of excuses.  Definitely need replacements in Washington at all levels of Government.  

  • Talk about adding to the stress.  A number of lenders will now verify appraisals 3 days prior to the Note date and require the borrower to sign the HVCC Disclosure-Appraisal Notification and Acknowledgement.  Yikes what does the seller do if they disagree with the appraisal.  I can see “out of area” appraisers continuing to slam local values.  I can also see a large number of law suits.

  • I haven’t seen much in capping salaries of late.  I wonder why?  Hollywood stars, sport figures, television news casters, anybody making over $ 250,000 per year……what are they thinking?  Cap and tax……could it be???????? 

  • I see that my home State (New Jersey) finally has the lead in something (speeding tickets).  Based on the article http://articles.moneycentral.msn.com/Insurance/InsureYourCar/Worst-states-for-drivers.aspx and the chart created by the National Motorist Association listed below are the worst to best States for speeding tickets.  So Jersey travelers be on the alert.  I was surprise that California was not in the top 5 States, but give them time….they will get there.

National Motorists Association rankings, from worst to best:

Rank State Rank State Rank State
1 New Jersey 18 Florida 35 Hawaii
2 Ohio 19 Pennsylvania 36 Arkansas
3 Maryland 20 North Carolina 37 Alaska
4 Louisiana 21 Alabama 38 Kansas
5 New York 22 Rhode Island 39 Mississippi
6 Illinois 23 West Virginia 40 Wisconsin
7 Delaware 24 New Hampshire 41 Utah
8 Virginia 25 Arizona 42 South Dakota
9 Washington 26 New Mexico 43 Indiana
10 Massachusetts 27 Missouri 44 Minnesota
11 Colorado 28 Texas 45 North Dakota
12 Oregon 29 Oklahoma 46 Kentucky
13 Tennessee 30 Nevada 47 Nebraska
14 California 31 Georgia 48 Montana
15 Michigan 32 Connecticut 49 Idaho
16 Vermont 33 South Carolina 50 Wyoming
17 Maine 34 Iowa
  • From the perspective of one economist the recession may be over.

As bad as it seems today, according to Robert J. Gordon, an acclaimed macro-economist and professor at Northwester University, we’ve lived through worse, and not all that long ago.

It was a lot worse in 1981-82, too, because the size of the work force was smaller then. So the same number of claims represents a larger percentage. Adjusted for the size of the work force, today’s claims are just a little more than half of what they were at the 1982 peak.  The recession? It’s over!  Read the following article which the author researched to verify his agreement with the professor.  Interesting reading.   http://articles.moneycentral.msn.com/Investing/Extra/the-recession-it-is-over-economist-says.aspx

Jobless chart © SmartMoney.com

One thing jumps out of the chart that has nothing to do with Gordon’s indicator — the fact that in this recession, we still haven’t exceeded the number of claims in the 1981-82 recession.

The National Real Estate Market.

The areas that have been my focus for investments have fared rather well during this real estate down turn (Oklahoma, Louisiana and Texas (although Texas has had more damage occurring over the last several months). 

 

The latest Federal Housing Finance Agency report show that these States (shown as West South Central) as having a negative appreciation of -0.5%.  The other sector (East South Central which I also like) had a negative appreciation rate of -3.0%.  California (the Pacific area) is experiencing a -22.1% negative appreciation.

Ventura County Real Estate.

Things are looking brighter and the market is getting stronger.

Mentioned a number of times is the jack-in-the-box scenario that is forming now.

Listings have decreased significantly over the last 18 months (from 5,250 in November 10,2007 down to 2,069 as of May 23, 2009:  approximately a 50% decrease).

Sales in Ventura County have increased 32% in 2009 compared to the same comparable period of 2008.

This year there have been 2,852 sales for the period January 1 through May 23, 2009; for the same period in 2008, there were 2,161 sales.

There is a squeeze occurring.  We have a commodity (homes) and there is a pent up demand for this commodity and as soon as the jack-in-the-box is opened prices will accelerate big time. 

Ventura County areas that are now seller markets consist of Simi Valley/Moorpark, Ventura, Oxnard, Camarillo, Santa Paula, and just recently Fillmore.

Areas that remain buyer markets consist of Santa Rosa Valley, Ventura Beaches, Oxnard Beaches and the Ojai/Oak View area.  Conejo Valley is neutral.

For Ventura County the plot thickens.  Unemployment and job creation will be necessary to see a healthy real estate market.  The market will start to go up but the pace of the upturn is dependent on jobs and a decrease in unemployment.  If jobs continue to lag and unemployment increases or stays high the market will go side-ways for a period of time but the bottom (in general) has been set.

Comments are welcomed.

Posted by John Duffner | Currently 12 Comments »

People Are Talking….

May 10th, 2009 Categories: Weekly Real Estate Activity In Ventura County

On this Mothers Day it appears that real estate is a good topic to talk about since the indicators now have been accepted by the media. 

Good press from news outlets is also creating positive vibes for the market.

To be sure the politicians will play the game but when push comes to shove they had little to do with the change in direction. 

The market would be doing the same with or without them.  One should be concern that the politicians will once again stick their nose into the system and screw things up.

The good intentions of a home in every pot did not work out.  In fact a great many people have been hurt with this political folly.  But intentions aside the system is going back to hard nose business basics and this will continue for several more years and then the follies will start over again.

There will be some significant economic events that will slow the market but it will not create a free fall as had been the case over the last few years.

Economic events that will slow the market:

  • gasoline will go back up to $ 4.50 or higher.  Throughout the World and in the United States, oil people are not drilling, plant capacity increases have been shelved. 
  • Food prices will sky rocketbecause of ethanol and less planting in the farm land.  Politicians know this is a folly but want to continue the folly to satisfy constituents and save face.  Ethanol has been shown to be a pollutant but the folks in Washington have too much invested to yield to common sense today.  
  • Environmental costs (cap and trade) will be a hideous tax on the United States with most other Nations giving lip service but basically by-passing this issue.
  • California is going to the brink of bankruptcy.  It’s a matter of wills but Sacramento will realize that unless significant cuts are made they will be out of a job.

The National real estate market will continue to plod upward because States and local agencies need to have real estate do good to collect taxes.

Ventura County.

The Ventura County real estate market as evidence by the table below is doing well.  There will be hiccups but it appears that the base has been settled.  We should continue to witness an increase in sales but it will take a little longer for prices to start upward.  One will see sales continue to make a V shape configuration while prices will follow a U shape configuration for the next several months.

This table also notes that the Simi Valley/Moorpark, Ventura, Oxnard, Santa Paula and Fillmore areas as seller markets.  The Conejo Valley and Camarillo are neutral and the other areas (Ventura Beaches, Oxnard Beaches and the Oak View/Ojai) are buyer markets. 

Overall the County is a neutral market and has an average 4 months inventory.

Unemployment and the lack of job creation in the County will cause a side-ways motion until the last quarter of 2009.

Job creation is going to be a zinger.  Large and medium size businesses will be facing significant increases in employee health care and taxes.  This does bode well for job creation.  Visit My Musings Of The Week and I think you will get a sense of what is in store.

What may help is the significant increase in sole proprietor-ships and federal, state and local governments hiring.

However the public sector is over weighing the economics of scale and eventually there will be a drastic decreases in head count as time marches on.

The general public and the private sector will not be able to shoulder the burden and all sort of changes will take place which will not be very pleasant for a lot of people.

Expect big changes in educations and State government headcounts.  The tea party is set to begin.

This next chart (below) shows the distribution of single family residential sales in the County for the period of January 1, 2009 through May 9, 2009.  Approximately 25% of the homes sold in the County in this time period fell into the price range of $ 300,001 to $ 400,000.  65% of all single family homes sold in the County was for $ 400,000 or less.

75% of the homes sold in Oxnard were below $ 300,000; 82% of the homes sold in Fillmore and Santa Paula were below $ 300,000.  These communities accounted for 37% of all sales in the County for the period ending May 9, 2009.

Periodically I will update this chart but I suspect significant changes towards the upper price ranges towards the latter part of this year. 

The projection that had been made last September, 2008 http://www.venturacountyretalk.com/2008/09/07/ventura-county-real-estate-doings-for-week-ending-september-6-2008/ appears to be on track.

Illustrated in the September, 2008 article was the Ventura County Forecast through the year 2022. 

 

As noted it is expected that the previous highs (2003-2005) will be exceeded by at least 50% or more in Ventura County.  Those living within 25 miles of the ocean can expect higher appreciation.

As mentioned earlier the U configuration price jumps will really show up around the year 2014 and then watch out. 

There have been many homes withdrawn from the market place over the last several years waiting for better prices.  Listings have continued downward so in effect what is happening is a “spring” effect will take place allowing prices to surge upward as shown above.  Standard economics 101, supply and demand.

Your comments are welcomed.

  

Posted by John Duffner | Currently 2 Comments »

My musings of the week!

May 8th, 2009 Categories: In Case You Missed It---

Swine flu.  There was talk that we should close the border because of this flu.  Why can’t the border be closed to stop illegals entering the country or to stop drugs or arms.  I wonder if our political people are talking with a fork tongue?

Bully Pulpit.  It is interesting reading to see the steps being taken in schools to minimize bullying amongst students.  Various penalties are imposed including dismissal.  When the bullying occurs from the White House what are the penalties being imposed?

Certainly our press corps has been very quiet regarding the bully bully activity going on in this Administration.  It sets the stage for other Presidents to do the same or more.  If it is decided by some President that the press should write things as determined by Washington, I wonder if the press will be more vocal then?  Well I am certainly out of focus….this is being done already.  Interesting don’t you think?

From all indications it appears that this Administration and Congress want all people teetered to the whims of the government.  This appears to be the same attitude of State governments and local governments. 

There is an attitude that people must live in fear simply because a few lunatics want to take over the way we live.  If you object to this, look in the mirror because you may be the reason it is happening!

To make the point.  I live in a small town.  A lady wanted to build herself a restaurant but the City Planners made her add retail shops (I suspect it for the best use of land, etc).

A similar action was taken with an individual who wanted to build an apartment complex.  They had to add retail shops.  In this second case none of the shops are occupied and haven’t been since the complex was built about one year ago.

Who is responsible for keeping these shops occupied and is this lady or the apartment builder being re-reimbursed for something they do not want?  I do not think so and if they are why isn’t it public policy to tell the citizens what is being done and why.  

General Motors.  I cannot believe I heard this.  Since the Union has basically taken over General Motors there is the consideration that many of the GM cars will be built overseas.  Excuse me….what happened to “built in the USA” fan fare.  Management looks for the cheapest way to produce and stay competitive.

Political Dismay.  California politicians are besides themselves seeing  that the various measures being proposed appear to be losing.

Well being honest in the beginning may have been the better course of action.  So why politicians think (based on what has happened in California over the last 10-15 years) that we should believe them today is beyond me.  When our friends in Sacramento see money that is an open invitation to spend.  As far as they are concern, everyday is a rainy day.  

What we should do is replace all of them and start fresh.  Let’s take the steps the Federal government took with General Motors CEO.  The Federal government got rid of him.  If it is good to take this action in the private sector why not the public sector.

Keep replacing until we think we have the right one’s in office.  We will get it right one of these days.  Today politics appears to be a criminal activity at all levels.

Grade Schools.  I see that PE is changing drastically in grade school.  It appears that competitive sports is being down played, being replaced with activities that has no winners or losers.

 That appears to be the template for our schools overall.  There are never any winners or losers.  I heard it said (Peter Drucker) that he thought the school system in the United States will unravel which it appears now to be doing.  Just read the papers to see the hoops that one has to do to fire incompetent teachers.    

ID Risk Level.  You may surprise yourself.  I received this from a young lady in Illinois.  Find out your test score and see if you have to take some action to protect yourself. 

  • I regularly receive pre-approved credit card offers in the mail. (add 1 point)

  • I shred all credit card offers I receive in the mail. (deduct 2 points)
  • I always shred my credit card statements and other documents with personal identifying information before putting them in the trash. (deduct 2 points)
  • I carry my Social Security card in my wallet or purse. (add 4 points)
  • I carry my insurance ID card or other ID card containing my Social Security number in my wallet or purse, or in my car. (add 2 points).
  • I use my ATM card at non-bank ATMs such as those at convenience stores, airports, or shopping mall kiosks. (add 1 point)
  • I shop online and don’t verify that the sites are secure. (add 2 points)
  • I use obvious PIN numbers, like birthdates or phone numbers, on my ATM cards. (add 1 point)
  • My employer does not keep employee files locked at all times. (add 2 points)
  • My Social Security number or Drivers License number is printed on my checks. (add 2 points)
  • My Drivers License number is the same as my Social Security number. (add 2 points)
  • When people ask for my Social Security number, I provide it. (add 2 points)
  • My credit card company sends me convenience checks in the mail. (add 2 points)
  • I shred credit card company convenience checks or keep them locked up. (deduct 1 point)
  • The last time I ordered a copy of my free credit reports from all three credit reporting bureaus was 2 years ago or longer. (add 2 points)
  • I am skeptical of telemarketing phone calls or emails and do not provide personal information or click on links in marketing emails. (deduct 1 point)
  • I do not use anti-virus software on my computer. (add 2 points)
  • I do not use firewall software (like Zone Alarm or Norton Internet Security) on my computer, even though I use the Internet. (add 2 points)
  • I store personal financial information or passwords on my computer. (add 1 point)
  • I reconcile my bank statement every month. (deduct 1 point)
  • I carefully review my credit card statement every month and investigate any charges I don’t recognize. (deduct 1 point)
  • Do I exercise my legal right to receive my free credit report at https://www.annualcreditreport.com
  • I store personal information on my computer. (add 1 point)

How Did You Score?

  • More than 26 points – Off the Charts! You may already be a victim of identity theft and not even know it.
  • 20-26 points — Very High Risk – You’re either unaware of the way identity thieves work or you think it won’t happen to you. You’re identity theft waiting to happen.
  • 14-19 points — High Risk – You’re aware of some of the risks of identity theft and have taken a few basic precautions but are wide open to less obvious methods of identity theft. You’ve got some work to do.
  • 8-13 points – Medium Risk – You’ve covered the basics pretty well but could tighten up in a few of the less obvious areas. You’re getting there!
  • Less than 8 points – Low Risk – You’re well aware of the risks of the various types of identity theft and you take them seriously by taking steps to protect yourself in a wide variety of vulnerable areas. Good work!

If your score is Very High Risk, hire and pay a legal representative, security personnel, CPA, and whomever that will monitor and protect you and your family 24 hours, 7 days a week from being a victim of ID theft or simply contact John Duffner at johnduffner@hotmail.com and ask what is available to give you some means of protection at a reasonable price.

 Kids Names:  Another item that interested me are baby names.  Here is a listing of the top ten boy/girl names based on 2008 statistics:

  1. Emma

  2. Isabella

  3. Emily

  4. Madison

  5. Ava

  6. Olivia

  7. Sophia

  8. Abigail

  9. Elizabeth

  10. Chloe

The Top 10 names for baby boys:

  1. Jacob

  2. Michael

  3. Ethan

  4. Joshua

  5. Daniel

  6. Alexander

  7. Anthony

  8. William

  9. Christopher

  10. Matthew

 I lost a friend.  He was a shoe maker, very outspoken, but very good hearted.  He and I at times would exchange stories of our experiences with heart surgery since we both were operated on within months of each other.  Or we regaled each other with stories of what we did in the service (he was Army; I the Marines) and what our kids were doing.  When Jess lost his wife a few years ago it took the spring from him but he remained occupied, always opening the shop, and I would stop by to complain about nothing.  He will be missed. 

 Your comments are welcomed.

Posted by John Duffner | Currently 2 Comments »

Watching Grass Grow!

April 26th, 2009 Categories: Weekly Real Estate Activity In Ventura County

The real estate market is just meandering; setting its base for the next cycle upward.

Much has been written over the last week of mortgage help.  It appears that banks are just starting to get into the mortgage business however it appears that only 1 in 11 will be able to get help.

That means the other 10 people will probably go into foreclosure.

So be ready for another round of foreclosures will be coming to fruition in the next several weeks.

The financial sector is still trying to find its legs.  Business is not creating new jobs at this time but it appears that government jobs are increasing significantly. 

Unemployment is hovering around 11% but surprisingly not many government jobs at any level has been impacted.  The stimulus money that States want appears to be a justification of increasing their payroll base.

There is a lot of BS going on in government with deflective stories being written to turn people’s attention away from our economic problems and creating bigger government. 

Words uttered by any Federal or State representative should put one on guard.

What is being said is to make people feel good; what is being done will make people sorry and at a point they think there isn’t anything they can do.  

An example is the “rainy day set aside” proposal that California will vote on this May.  Sounds good to set something aside.  It makes one think that someone is taking steps to do something right.  But politicians being politicians when they see ”rainy day” funds they will justify taking of these funds for some other cause.  There goes ”rainy day” funds.

So like Social Security which was set up as a set aside fund, later when monies were needed, its money was used, replaced by notes.  I suspect this “rainy day” proposal is of the same vintage.  As stated earlier, politicians say things that sound good; but later is when you really recognize what they really wanted to do.

We can start by removing those in office now and replacing them with new blood that understand and can manage the needs of the Country.  We have too much “good ole boy” goings on throughout the Country.  It is time to change to something better.  As a first step maybe we should start “recalls” now, replacing Federal and State representatives.  That clean house each two years. 

As mentioned last week if you don’t like them remove them.  Recalls is a start.

I found it interesting that the Congress had sessions relating to earth warming.  The interesting part was they would not allow any rebuttal or opposite views to be heard at these sessions.  Meaning:  our minds are made up and this is the way it is going to go.

That will be a healthy tax for America.  Who controls this.  Our friends overseas.  We pay and they make the rules.  Seems only fair???? 

Ventura County

The County real estate is continuing its base building.  Listings continue downward; discounts continue and it appears that the County inventory is neutral will a bias towards becoming a sellers market.

Santa Rosa Valley, Ventura and Oxnard Beaches and the Ojai/Oak View areas are still buyer’s markets.

Simi Valley/Moorpark, Oxnard, Santa Paula and Fillmore appear to be sellers marketswith the Conejo Valley and Camarillo currently being neutral.

Overall there has been a 35% increase in sales in 2009 compared to the same period of 2008.  Areas showing significantly higher sales this year is Oxnard (114% increase); followed by Santa Paula, Fillmore and the Ojai/Oak View area.

The areas lagging 2008 residential sales are Santa Rosa and Conejo Valley.

The County real estate appreciation for the next 12 months will be 8.7% growth; we will witness a 17.9% growth over the next 24 months; and a 25.6% growth over the next 36 months.

Increase in unemployement and lagging job creation can dampened these growth rates slightly but overall it appears these appreciation rates that can be expected. 

Your comments are welcomed.

Posted by John Duffner | Currently 7 Comments »

Home Valuation Code of Conduct….More Government Interferance. Just What We Need!

April 24th, 2009 Categories: Real Estate News

Home Valuation Code of Conduct:

Action Needed!
 

Our friends in Congress are at it again.

Background:


1) The HVCC negatively affects consumers and the already fragile economy.

As it stands today, the HVCC will take effect on May 1, 2009, and this rule states that GSEs will no longer purchase loans from lenders “accepting appraisal reports completed by an appraiser selected, retained, or compensated in any manner by any third party.” It overwhelmingly impacts small lending institutions and independent appraisers to the  detriment of consumers.

a)  Consumers will have to pay more for their appraisals to have them completed by AMCs.
 

b)  The exclusive use of AMCs limits competition in the marketplace, leaving the consumer and independent appraisers at a disadvantage.
 

c)  The AMC model is flawed and will produce poor quality work that will create a continuation of the declining housing market.
 

2) The manner in which lenders will collect fees in compliance with the HVCC is a potential violation of RESPA.

a)  Lenders may be in direct violation of section 8(b) of RESPA due to possible up-charging and fee-splitting. Every lender will be at risk of HUD action on every brokered loan they underwrite.

b)  Lenders will not utilize brokers for fear of potential RESPA violations. In addition, those lenders who only do brokered loans will go out of business all together, and competition within the marketplace will cease to exist-again at the detriment of consumers.
 

3) There already exists pervasive federal regulation of the mortgage lending industry’s acquisition of real estate appraisals. 

a)  FIRREA – In 1989, following the savings and loan crisis, Congress passed the Financial Institutions Reform, Recovery and Enforcement Act (”FIRREA”), which established a multi-faceted real estate appraisal regulatory system involving the federal government, the states, and The Appraisal Foundation. Since 1989, the federal agencies responsible for regulating financial institutions have promulgated regulations under FIRREA that set forth “generally acceptable appraisal standards,” and have issued guidance relating to real estate appraisals, which, among other things, set forth standards for selecting qualified appraisers. These regulations and appraisal guidelines both prohibit improper influence on appraisers and work to ensure appraisal independence.
b)  FRB Final Rule – In July 2008, the Federal Reserve Board (”Board”) issued a final rule prohibiting all mortgage brokers, mortgage lenders and their affiliates “from coercing, influencing, or otherwise encouraging appraisers to misstate or misrepresent the value of a consumer’s principal dwelling.” In issuing this final rule, the Board concluded that “[no] particular procedure for ordering an appraisal necessarily promotes” fraudulent appraisals. Rather, the Board determined that the “coercion of appraisers,” whether by lenders or mortgage brokers, “is an unfair practice” and the final rule should apply to lenders and mortgage brokers alike. NAMB fully supported the Board’s final rule because it targets problematic practices, rather than business relationships that present no inherent problems.
c)  FFIEC Interagency Guidance – On November 19, 2008, the FFIEC regulatory agencies issued proposed revisions to the “Appraisal and Evaluation Guidelines,” and requests for comment. The FFIEC regulatory agencies are currently reviewing the submitted comments and plan to issue a final rule this year.
d)  H.R. 1728 – “The Mortgage and Anti-Predatory Lending Act of 2009″ was introduced on March 26, 2009. TITLE VI of the bill – APPRAISAL ACTIVITIES – deals with every facet of the appraisal process that will ensure true appraisal independence and protect consumers.
4) The HVCC fails to comply with the Administrative Procedures Act.
The HVCC is a substantive rule that created de facto regulation of the entire mortgage industry in violation of the Administrative Procedure Act (”APA”).
a)  The FHFA is an agency and the HVCC falls within the definition of a rule under the APA. As such, the FHFA was required to utilize notice and comment rulemaking proceedings under the APA, but the agency failed to do so.

b)  Because this ruleregulates the entire mortgage industry and the FHFA failed to follow proper rulemaking procedures, we believe the HVCC is void, invalid, and unenforceable.

Impact on Consumers:

A.  The HVCC negatively affects consumers by increasing the costs to consumers for an appraisal, reducing consumer choice and adversely impacting a consumer’s ability to obtain a reliable and quality appraisal.

B.  The HVCC creates a heightened risk for consumers by requiring the use of unregulated Appraisal Management Companies (AMCs) for appraisals. The original investigation that prompted the HVCC’s creation was of an AMC and WAMU alleging that they engaged in practices of pressuring appraisers on behalf of WAMU.
C.  It increases the time to fund loans for consumers which necessitates longer rate locks or extensions of existing locks thereby increasing costs to consumers. In the case that a new lender or broker is chosen, a new appraisal will be necessitated, increasing the time to fund.

D.  It restricts the portability of an appraisal since each lender, in effect, will require a new appraisal.

Impact on Small Business:

E.  The HVCC squeezes out small business professionals that are striving to survive and have been working with consumers in the very neighborhoods where they are looking to purchase homes.

F.  The HVCC affects small business appraisers, mortgage brokers, Realtors and lenders in all 50 states without having been reviewed by ANY state or federal legislature or agency.

G.  Small business professionals who have indepth knowledge of local market conditions are being sacrificed for large AMCs who operate on a national scale to distribute orders through a primary processing hub or hubs which can be located up to thousands of miles away from the property being appraised.

Fails to comply with procedural law:

H.  Although the HVCC is broad regulation having a significant impact on small businesses and consumers, it did not go through the Administrative Procedures Act, the Regulatory Flexibility Act or other procedural laws as required by any regulation issued by a federal agency.

I.  FHFA claims that as Conservator of the GSEs, its actions are not “agency actions” under the APA and that its actions are “expressly precluded from judicial review” as a result of the Housing and Economic Recovery Act.

Appraisal standards exist:

J.  The Federal Reserve issued appraisal independence standards through Regulation Z being implemented this October which applies to every industry participant.

K.  The banking regulators issued interagency guidance on appraisal standards which are expected to become final this year.

Your comments are welcomed.  Note:  Most of this information was provided for by Connie Wright of Wright Mortgage Company, Chico, CA.

Posted by John Duffner | Currently 4 Comments »

Back In The Saddle

April 19th, 2009 Categories: Weekly Real Estate Activity In Ventura County

Mother Nature and I have had some disagreements over the last several months and things have sorted themselves out.  Now Mother Nature tells me (as she did before)what to do and now I do it.  Strange how that works out.

Surprisingly dispite the down time nothing has changed.  Things may have gotten worse.

Caps.  I loved hearing about this while sick.  Cap CEO pay.  That’s great except it did not go far enough.  I would add to the cap list:

All federal government workers should be capped at $ 75,000 annual salary; State workers should be capped at $ 70,000 per year; and Local government employees caps should be at $ 65,000.  All members of Congress and the President should be capped at $ 80,000 per year including the justices throughout the Federal and State Judiciary.  If I missed any one they should be capped at $ 60,000.

All union executives and private company executives should be capped at $ 100,000 per year.  If we do not like who is in charge they should be immediately replaced. 

(Sideline:  My dad was a local union President for many years.  He lived union.  While he felt the need for unions he also noted that the rank and file were hurt more by union  leadership and their political gyrations and hostile attitudes towards employers.  It was a war.  “This is what we want or we shut you down”.  He also noted that when the rank and file had a strike they never, ever were ahead.  Each strike made them poorer.  End of story.) 

Continuing with who should be capped.  All movie stars, television host and newscasters and baseball/football/basketball players should be capped at $ 100,000 annual salary.  Anybody working in the financial arena including Wall Street should be capped at $ 100,000.

Fisherman should not be capped (I like fishing).

All other workers should be capped at $ 150,000 per year except real estate brokers and agents…..they should make as much as they can…..no cap.  That’s fair and that is my contribution to the cap situation!

Immigration.  While sick I was listening to the many discussions about resolving the illegal immigration problem and a solution was devised to penalize employers monetarily and maybe sentenced them to jail.

I agree with this position but again those in power did not go far enough.  I would add to the list the fining and possibly jailing of activists who push illegals to break the law.  I would also include in the mix the politicians who intercede on behalf of their constituents and force Border and other agencies from doing their job.  These folks too should face a penalty, jail time if required and removal from office.

I recall in the 1960’s and 1970’s when those responsible to protect our borders would be retired, demoted or re-assigned because politicians did not want these people to do their job in the area they represented.  Nothing has changed much.

Why people from South America think they can ignore immigration laws is beyond me.  The Europeans followed the rules to get into this Country.

But we have to give a pass to the folks from the South….Why?  And those from South American countries who are now standing in line waiting to get in the right way, well it appears that you are doing a stupid thing.  Why go through the hassle.  Break the law. 

Come in and in 10 years you will get your citizenship.  That is what has happened over last 20 or more years.  10-15 years from now we will have the same situation and our politicians will find it necessary to legalize ’illegals” once again.

It’s a revolving door.  Maybe we should have an open border from the North Pole/Canada to the very tip of South America.  All of the people in the Americas can move as they want from one area (location) to another and would automatically be a citizen in the area they lived or settled.  We would be called citizens of the Americas. That would solve the problem. 

I think shortly there will be a meeting of the minds and people are going to see that there has been good from the past and this good can be used effectively in the future.  People are going to do it and it will take time but it will be people solving the problem, not politicians.

Oh.  One more thing that was big news and that had to do with taxes.  Heck the cure for this is simple.  Have a flat tax. 

Everyone pays and the federal rate should not exceed 10% of one’s gross wages (including companies gross sales).  States should be limited to 5% of either gross wages or sales.  There should be NO deductions of any kind.  At no time can the Federal/State tax rate exceed 20% combined.  All other taxes for gasoline, sales taxes, and any other tax, fee or whatever it is called is to be eliminated.  OK, that takes care of the tax issue.  If anyone disagrees with this replace them. 

Real estate on the National scale is holding its own especially in the Mid-States. 

Unemployment appears to be going up along both coast lines faster than the Mid-States but job creation is down Nationally.

This will temper the upward movement for real estate for a period however the truth of the matter is that in another year real estate will be stronger and move higher and then watch out.  Politicians will once again interfere with the free market because there will be a division between who has a home and there will be many without.

Ventura County.

The unemployment rate is near 10% in Ventura County.  Job creation is nil.  But the real estate market is putting is a solid base for its pending thrust upward which should start around September/October, 2009.

This basing will be significant for the BIG thrust that one can expect to see starting in 2010.  The high prices witnessed in 2004-2006 will pale to what they will be in 2013-2027.  I suspect that the upper limits of the new up trend will be about 50% or more higher than 2004-2006.

There has been a change to the weekly table.  Eliminated was ”days on the market”, replaced with ”estimated inventory and designation specific areas as being either a buyers/sellers market”.

The formla used to calculate inventory was simply to take current listings and divide this by the number of sales over the last 3 months.  This result was then multiplied by three to get the number of months inventory for a specific area. 

True I could have used 6 months or 12 months sales but using three was closer to current market conditions.  I am sure many will correct me but that is OK, I look forward to the coments.

Happily real estate is starting to get some good press.  As one can see from the table above a number of areas have had significant sales since the beginning of the year. 

Oxnard and Santa Paula have had 100% sales increase.  But these sales were due to deep discounts of property values.  So it should not be surprising to see Santa Paula, Fillmore, Oxnard and parts of Ventura showing up as seller markets.

Santa Rosa Valley, the Beaches (Ventura and Oxnard) and Ojai/Oak View continue to have large inventories BUT these have lessen substantially over the last several months and it is expected that these areas will turn the corner and show up as seller markets. 

Your comments are welcomed. 

Posted by John Duffner | Currently 16 Comments »

What A Difference A Year Makes!

March 1st, 2009 Categories: Weekly Real Estate Activity In Ventura County

Based on data provided by the Federal Housing Finance Agency the last quarter of 2008 and addressed in http://www.venturacountyretalk.com/2008/11/26/its-not-pretty-picture-review-of-the-national-real-estate-market/ was a disaster for the real estate market.

As shown in the graph below very few places in the United States was spared by the real estate down turn.

Comparing the National real estate market to the 4th quarter, 2007 it quite evident which areas have been hit the hardest and those that have remain relatively calm (Texas, North and South Dakota and Wyoming).

Even my favorite investment areas of Missouri, Louisiana, Mississippi and some parts of Texas have been hit. 

Most of the real estate comments relating to this latest quarterly report have been discussed in other articles written and for this blog.  Those wanting to review these can refer to the following articles:

Quiet Before The Storm/

Waiting For The Next Shoe To Drop/

Hit The Reset Button/

Uncle Sams Enron/

Digging In/

Out With The Old. In With The New/

We’ve Lost Our Compass/

National real estate.

Brokers and agents have known for quite some time that the real estate market was going South.  They are also witnessing good properties being given low-ball appraisals, exascerbating the problem in their particular geographic area. 

People want to remain clueless as to what is going on.  There is the political slight of hand and talk being banter about.

Last week for example the President suggested that those earning over $ 250,000 per year will be unable to take mortgage interest as a deduction.

I got news for you folks.  If this group loses this deduction everyone will lose the deduction regardless of income. 

Remember credit card interest was taken away as an itemized deduction a number of years ago.  People at that time thought it would not occur but it did.

The tax code is a vehicle used to distribute wealth.  Unfortunately it has never worked.  

What one may see within a few years are no itemized deductions, a scaled back of credits and basically a flat tax (it will not be called that for political reasons) but rates will be as high as 70% to 75% for the those earning over $ 250,000.  Canada has that kind of tax program as well as some European countries.  Guess who we are trying to follow?

The $13 per week increase that everyone will get in their pay check.  This is not a decrease in tax.  These monies (credits) will be taxed next year as additional income.  So you may want to reduce your exemptions if you think you will have to owe taxes.  

Is a real estate contract worth anything today?  Probably NOT.  Will any contract be worth anything or sustainable?  

Banks and other people are concern about the prospects of having real estate mortgage contracts “cram-down” with contractual changes of either interest rate, the principal or whatever.  Why now?

Well these same people (banks and appraiser’s collectively) “cram down” ridiculus appraisals over the last year on seller and nothing was said.  Now that banks have to face the same problem it becomes an issue.  One gets what they sow.

Contract law is going to stand on its head and will be put to the test as to the meaningfulness of any contract.

California. 

When looking at California itself the State is a disaster.  States vying for the crown of having the worst real estate markets are Arizona, Florida, California and Nevada (ranked as 48,49,50 and 51.  Yep…..California is ranked #50).

Area continuing to be the worse of the worse in California are:

  • Merced
  • Stockton
  • Modesto
  • Vallejo-Fairfield
  • Riverside-San Bernardino-Ontario
  • Salinas
  • Yuba City
  • Bakersfield
  • Madera-Chowchilla
  • Fresno
  • Sacramento-Arden-Arcade-Roseville
  • Visalia-Porterville

The area ranked as the lowest in the United States is West Palm Beach.

There is a Japanese expression “genchi genbutsu” which basically says ‘get out of your office and visit the source of the problem’.  I was schooled in this philosophy and it is an appropriate approach that should be undertaken in Washington and Sacramento by both Senators and Congress people.

We need to elect better people to office and retire those that have been in office for an eternity.  They have lost perspective.

Activist and special interest groups are setting National, State and Locals agenda’s which are a hindrance to all.

I suspect that 90% of the voting population hasn’t the slightest idea of who they vote for nor what the individual(s) running for office stand for.

If promised something that will not cost them anything they will vote for that person.   Unfortunately when they find out they have to pay too, its to late and a lot of damage has been done.  People WANT and politicians promise.  So the thinking is if someone else is paying for it, it’s OK.  It doesn’t work out that way for long. 

Much is being directed towards statements by Lincoln, Regan and Franklin Roosevelt made in the past.  Perhaps Thomas Jefferson would be worthy reference.  Jefferson stated “Honesty is the first chapter in the book of wisdom“.  That is what we need on the National, State and Local government levels.

Ventura County.

Surprisingly residential sales are up approximately 40% when the first two months of 2008 and 2009 are compared.  Most of the increase in sales were in Oxnard and the buyers are generally foreigners (from China for the most part).

Listings continue to decrease but it appears that prices want to resist further downside erosion (see second chart).

The recent February % of -36% is significantly down from the -47% recorded a few months age.  This suggests to me that while prices may still fall there appears to be some resistance to further decreases.

If this % factor continues to fall over the next few months Ventura County may be out of the woods.  It would also suggest that November, 2008 was the bottom of the downside for the Ventura County market.

 

It will be interesting to see if this trend continues because what the politicians want to do and what the market is doing seems to be at odds with the purpose of each.

The job market will be especially hurtful to the real estate market if the unemployment rate in Ventura County exceeds 10-11% (it is now 10% in the State) and if businesses elect not to make new jobs.

If this should occur the market will tend to go side ways for a period (with perhaps some downside but not much).  Unfortunately the numbers will not be available until 2-3 months after the fact.

Your comments are welcomed.

Posted by John Duffner | Currently 2 Comments »

« Previous Entries