Web Links to Local, State and Federal Governments

Here it is all in one place: How to contact your state and congressional senators, the Governor's office, district maps, electoral information. This is a very handy collection of links: Web Links

Another No-Bubble Report

The New York Federal Reserve Bank's study says the widely cited "bubble evidence" doesn't take into account other housing issues over the last decade: Article here.

Housing Forecasts for Southern California

The annual economic report from UCLA Anderson School of Management is out as of yesterday in a series of reports given at a conference. Southern California has job growth, adding 30,000 jobs in six counties, and increase in tourism, but state budget may have reductions in local government and real estate prices are high (not news). Solid employment growth should continue. Northern California is a different story and the disparity between the two regions will continue for years. Read more here.

But in other indepth views, and further deflating the bubble market opinion, a major annual academic study says the housing industry is poised for yet more growth -- 10 more years worth, at least. Citing greater roles among women, minorities and immigrants, Harvard's Joint Center For Housing Studies' "2004 State of the Nation's Housing Report, says, while fast appreciating home rates have made it more difficult for some to buy, shifting demographics will increase the pressure on the low-end starter home and rental markets as well as move-up and second home markets.

And Harvard's study is followed by a similar 10-year forecast offered by Homeownership Alliance, an association of 18 national housing organizations.

From Harvard's Joint Center come new projections that suggest household growth between 2005 and 2015 will be at least 10 percent higher than previously projected -- bringing the total increase to more than 13 million households, due to demographic factors (immigration) which propel housing production even higher. This includes demand for second homes and replacement units if immigration continues at the present rate. Important to repelling bubble market arguments is the fact that even with fast appreciating home prices, incomes have kept pace as low interest rates helped stretch household dollars. But affordability issues have increased and rising interest rates could make matters worse.

However, certain markets in several states, including California's, may be overheated, concedes director Nicholas Retsinas.

How High Will Rates Go in June?

With a quiet economic calendar for the early part of the week, mortgage bonds and home loan rates will likely move in response to stocks, geopolitical events and technical factors. Remember that money usually flows back and forth between stocks and bonds, and when one is higher, the other is usually pushed lower and vice versa. Geopolitical events of terror will generally push bonds higher, due to what is called a "flight to quality", as money is pushed into the safe haven of stable bonds. In recent weeks, geopolitical and terrorist activity has not been as influential on market trading as has been seen in the past, as traders are becoming toughened to the continuing news.

Looking ahead, traders now have their minds focused on the Fed's next meeting on June 30, coincidentally the same date as the official hand-over of sovereignty to the new Iraqi government - this will be a very big day. Because inflation is bad for Stocks and bonds, the whole market really wants to "take their medicine", see the Fed raise interest rates, and get it over with. This Fed action will send a clear and strong signal to the markets that they are on top of inflation-related concerns. But will they stick to an expected .25% increase, or make a more aggressive .50% increase? A smaller increase is much more likely, but as we have seen in the past, anything can happen. Prices will likely continue their sideways move until the end of the month when the Fed releases it's decision on interest rates. -- The Mortgage Market Guide, June 21

The West Nile Virus is not just at a distance, it is and has been in the Southern California area, including Long Beach, Cerritos, and San Bernardino. Residents and homeowners should take certain precautions, no need to panic, prevention goes a long way, like wearing insect repellant containing DEET. It is a mosquito-borne virus, and removing and cleaning sources of water in and around your property and neighborhood is important. Very few mosquitos are actually infected, however there is local evidence that the virus has spread since 1999. For starters, please see the following information at the City of Long Beach and City of Cerritos websites at Long Beach and Cerritos. Find additional information at Los Angeles County's site here.

Southern California Median Home Price at $396,000 in May

Record high levels were reached in home sales last month, and according to DataQuick Information Systems it's the result of high demand for home purchases by buyers who wanted to make a move before interest rates move higher.

The median price paid for a Southern California home was $396,000 last month, up 2.3 percent from $387,000 in April, and up 26.9 percent from $312,000 for May 2003.

A total of 31,151 homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was down 5.4 percent from April's 32,916 and down 0.8 percent from 31,387 for May last year. More information is at http://www.dqnews.com/ .

Gradual Rate Hikes

Alan Greenspan said Federal Reserve officials still believed they could begin boosting short-term interest rates at a "measured" pace. The first increase is widely expected when the Fed's policymaking Open Market Committee meets June 29 and 30, and rates may be raised by about .25 percent. This is part of the "gradual rate hike" that's been referred to in recent weeks, and bear in mind that banks usually anticipate these increases in advance of action by the Federal Reserve, but you may well continue to see more increases before the end of the year.

Trade Show and Other News

Every year we have an opportunity to see new product demonstrations and attend sessions at Pacific West Association's annual trade show and expo. This year, as it was last year, it was held June 15 at the Disneyland Hotel in Anaheim. This is always a time to hear from others in the real estate industry, learn about new developments and tools available to us as Realtors. It's always about how to increase our service to our clients and what we can offer to do our job better, and with over 100 exhibitors and several industry speakers, there were plenty of opportunities, not the least of which was the legal update offered by our Association counsel. There are also many software products and internet-related methods for doing business that we always get excited so that our clients will eventually know that this translates into improved service for them. 

 

Talking about increased opportunities, maybe you've noticed more open house signs recently?  The inventory has about doubled during June, to a more normal level of inventory. If you got frustrated in past months because of the hot and heavy competition with other buyers, take a look again.

What You Need to Know Besides the Selling Price.

It's no news to most homeowners that home insurance premiums have risen in California, or that the reason is due to claims against insurance companies because of mold and water-related damage. But have you ever thought about a Realtor's insurance coverage during your transaction? Errors and omissions insurance premiums have more than doubled--there are fewer carriers willing to carry risk in California. This is a result of the sharp increase in claims against Realtors, even though only a small percentage are actually valid. Consequently, some brokers no longer can afford this coverage. The working relationship between clients and their Realtors, if given some advance thought and preparation by all concerned, could alleviate misunderstandings. This article explains more.

2000 Realtors in Sacramento for Legislative Day

This focus on the annual Legislative Day, where Realtors meet with their elected officials, is on protecting private property rights and increasing the supply of homes in the state, a subject that is timely for many states: Legislative Day 2004.

Growth in Home Prices has its Achilles Heel

An article in the Los Angeles Times (May 20, 2004) covered remarks by Nicholas Retsinas of Harvard University's Joint Center for Housing Studies which stated immigration, global financing and slow growth/restricted growth policies were the three main factors in the surge in housing prices. Now, the Center's 2004 State of the Nation's Housing study also talks about overcrowding and the higher amount of income spent on housing as the downside of this market. Well, it wasn't perfect. While renters and homeowners spent more, mortgage rates also dropped from 7.9 percent in 2000 to 5.7 percent in 2003. But household growth will continue to grow as immigration and other household formation factors fuel the demand. Unmarried women accounted for 30 percent of the growth in homeowners from 1994 to 2002, the study also found. See that report here.

Job Growth May Hike Interest Rates

The 248,000 nonfarm jobs created in the United States last month brings to nearly 1 million the number of new jobs that have been added since February, the largest three-month gain since May 2000.

Manufacturers are contributing to the job growth, stepping up the pace in May with 32,000 new hires.

The increase could bolster the Federal Reserve's stance that the time is nearing for a hike in interest rates even as the country's unemployment rate has stayed pat at 5.6 percent.

The Fed policymakers have said that any rate hike will be "measured," knowing that the first in a series of rate increases will carry the potential to cause turbulence in some markets.

Source: Wall Street Journal (06/07/04);

Rate Increase in Your Future

So with the chatter of a "jobless recovery" diminishing to a whisper...what happens next? Any doubts of the Fed making an increase to short term interest rates have vanished, and it certainly appears inevitable that a .25 to .50% hike will be delivered at the next FOMC meeting scheduled for June 30th. Remember that there are many different types of interest rates, and the Fed manipulates the Federal Funds Rate, an overnight lending rate between banks, not interest rates for mortgages. Many people - including some of the national media - believe that when the Fed "raises rates", there is a direct correlation to rates on first mortgages. Not true. In fact, when the Fed finally does give the Fed Funds Rate a hike, it should ease the inflationary market pressures and surprisingly give Bonds a boost, which would reduce rates on mortgages. -- The Mortgage Market Guide

Sales vs. Consumer Confidence

Consumer confidence may slide but that alone does not stop people from investing in real estate, in fact, just the contrary, click here to see more about our western economy and the strong demand for limited supply.

Southern California Immigration

Immigration is one of the factors seen by Harvard University's Joint Center for Housing Studies and others as one of the three factors of the rising cost of real estate both nationally and locally, the others being global financing and restricted growth policies. A study released by the Public Policy Institute of California found that 26 percent of California’s population in 2000 is foreign-born, as compared to 22 percent in 1990. According to the U.S. Census, 2.8 million new immigrants arrived in California between 1990 and 2000. 46.2 percent of new immigrants were born in Mexico, compared with 38.2 percent in 1990. A full copy of the report can be obtained here from the Pacific Council's site.

Increase in California home price

As of the end of April, sales prices of existing homes increased 24% higher than the same time last year, bringing the median home price statewide to over $453,000. Last year at this time the median price was $364,000. Insufficient supply and increase in population are two reasons for this continuing rise. See the full California Association of Realtors report here.

Buying a home downpayment

You may have to think about retirement funds to come up with your down payment if you have no other alternative. Using your IRA or 401(k) should first be checked out with your accountant or financial planner, but if you have no other choice and if you're a first time homebuyer, look at this source as a place to start for information.

Title Insurance

Why do you need Title Insurance?

Report Finds Mold Poses Only Modest Health Risks

(June 2, 2004) -- A long-awaited report from the National Academy of Sciences (NAS) concluded that exposure to mold will result in only modest negative health effects. In 2002, the U.S. Centers for Disease Control and Prevention directed the NAS to conduct a comprehensive scientific literature review of the health effects of mold, identify research gaps, and make recommendations to address future public health policy in this area.

The NAS, in a report titled "Damp Indoor Spaces and Health," concluded that the current scientific literature on the health effects of mold exposure found sufficient evidence of an association between exposure to damp indoor environments (where mold is likely to grow) and respiratory health distress symptoms, including coughing, wheezing, and increased incidence of asthma in sensitized persons. Limited evidence was found for an association between damp indoor environments and more serious respiratory illness. Insufficient evidence was found to support a relationship between damp indoor environments and severe health outcomes, such as cancer, pulmonary disease, or death.

The report concluded that excessive indoor dampness, and subsequent exposure to mold, is a public health problem. However, additional research should be conducted in several areas, including mold exposure and serious health outcomes; the interaction of the wide variety of exposure factors in the indoor environment on human health; and the effectiveness of various remediation methods.

—NAR