The document provides an overview of the real estate market in Southwest California for the current period (March 2014) compared to the last period and year ago. Existing home sales increased 32% from the last period and 7% from a year ago. The median home price increased 1% from the last period and 3% from a year ago. Unsold inventory decreased 4% from the last period and increased 8% from a year ago. The median time on the market increased 6% from the last period and 8% from a year ago.
2. SW Market @ A Glance
Southwest
California Reporting
Period
Current
Period
Last
Period Year Ago
Change
from
Last
Period
Change
from
Year
Ago
Existing Home
Sales (SFR
Detached)
March
2014
934 636 872 32% 7%
Median Home
Price
$302,569 $300,847 $294,120 1% 3%
Unsold Inventory
Index (SFR Units) 2,294 2,378 2,105 4% 8%
Unsold Inventory
Index (Months) 2.7 4 2.8 32% 4%
Median Time on
Market (Days) 78 83 72 6% 8%
Source: CRMLS
3. 0
50
100
150
200
250
3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15
Temecula Murrieta Lake Elsinore Wildomar
Trend Line
Last March
Year over Year
10. March Market Activity
By Sales Type
Standard Sale Bank Owned Short Sale
Active
% of
MKT Sold
% of
MKT Active
% of
MKT Sold
% of
MKT Active
% of
MKT Sold
% of
MKT
Temecula 397 94% 176 89% 11 3% 7 4% 7 2% 11 6%
Murrieta 367 91% 149 90% 16 4% 5 3% 5 1% 7 4%
Wildomar 67 93% 23 85% 3 4% 3 11% 3 4% 1 4%
Lake Elsinore 204 89% 82 84% 4 2% 5 5% 5 2% 7 7%
Menifee 310 90% 120 85% 8 2% 8 6% 8 2% 7 5%
Canyon Lake 109 96% 23 96% 2 2% 0 0% 0 0% 0 0%
Hemet 365 89% 122 85% 19 5% 13 9% 13 3% 5 3%
San Jacinto 117 81% 57 95% 8 6% 5 8% 5 3% 6 10%
Perris
133 85% 66 84% 6 4% 10 13% 10 6% 1 1%
Regional
Average
2069 90% 818 88% 77 3% 56 6% 56 2% 45 5%
11. • Affordability is worsening
• Homeownership rate for 18-34 - year-olds still falling
• Household formation is VERY slow
• Census: US added 476,000 HH v. 1.3 m HH prior 2
years
• Majority of new households rent: “Renter Nation”
• Millennials delaying “adulthood”: Getting married
later or not at all; Student loans; dim job prospects
• Baby boomers delaying “retirement” and staying put
longer; they will love their loans when rates do rise
• Inventory is better but still well below “normal”
12. Housing Fundamentals are positive.
What are some upsides?
• Mortgage rates are low & lending is loosening up a
bit
• Affordability is still good and price gains are slowing
• Foreclosure & delinquency rates are low & distressed
sales are less than 10% of the market
• Investors are leaving creating more opportunity for
buyers needing financing
• Overall homeownership rate has stabilized
• International demand for housing in CA still strong
• Construction is up – residential and non-residential
22. • Federal Economic Policy
• Regulations
• Mortgage Interest Deduction
• CFPB
• Future of GSE’s
• Lender Requirements
• Short Sales
• Foreclosures
• Interest Rates
• Inflation
• Shadow Inventory
• Global Economy
• Unemployment
Unprecedented era of government involvement in housing
23. • SB 8
C.A.R. is opposing legislation to impose a SERVICE TAX, essentially a sales tax, on services in California, including
real estate transaction services.
Issue Background
To generate approximately $10 billion dollars for various programs, Senator Robert Hertzberg, Chair of the Senate
Governance and Finance Committee, has proposed Senate Bill 8 to establish a tax on services. The bill exempts
health and education services but housing is not exempted. As a result, the home buying transaction would be
heavily taxed.
Real estate transactions, which are “services intensive” would be especially hard hit by a service tax. Services that
may be rendered as part of a real estate transactions usually include: appraisal, brokerage commissions, escrow
fees, home inspections and repairs, loan brokerage fees, Natural Hazard Disclosure Statements, roof certifications,
structural pest control inspections, title insurance and home warranty fees. This doesn’t include the services sellers
and buyers incur in preparation for selling or after purchasing the property, including landscaping, painting and
other home improvement services.
Tax Rate Tax Median Priced Home with Tax # of Households
no longer able to afford median
0% (Current) 0 $447,010 n/a
5% $2,972 $449,982 38,152
7.5% $4,458 $451,468 57,228
24. • Canyon Lake
April 2, 2015
The following is for use in required disclosure documents in real estate transactions involving properties located in Canyon Lake, California.
This disclosure has been prepared by the legal Counsel for the Southwest Riverside County Association of REALTORS ® based upon public, non-
privileged information and State law available on the date of its preparation. Changes or updates to this information may be forthcoming as
needed.
A. Currently there are pending lawsuits, countersuits, and claims related to the Canyon Lake lease agreement (the “Lake Lease”) between the
Canyon Lake Property Owners Association (the “CLPOA”) and the Elsinore Valley Municipal Water District (the “EVMWD”) that may affect the
value or desirability of property within Canyon Lake. See attached: “Escrow/Lender Letter, dated March 27, 2015,” provided by Counsel for
the CLPOA; “Rejection of Government Claim Letter, dated March 26, 2015," provided by Counsel for the EVMWD, and; “Informational Letter,
dated March 30, 2015,” provided by the EVMWD.
B. B. Material pleadings and allegations within Riverside County Superior Court Case #RIC1503428 (available on the Court’s Case Access
website) include:
a. A claim by the CLPOA that the Lake Lease is oppressive and unfair to the CLPOA.
b. A counterclaim by the EVMWD that the CLPOA is in default on the Lake Lease.
C. A claim filed by the CLPOA against the EVMWD alleging that the EVMWD has overcharged the CLPOA by approximately $6 million dollars since
2010 has been rejected by the EVMWD. It is anticipated that another lawsuit may be filed by the CLPOA related to this issue and/or related
causes of action.
D. The dispute noted above appears to be a complex legal matter. Neither the Agent(s), Broker(s), or the Southwest Riverside County Association
of REALTORS ® makes any representation, or offers any opinion, or offers any other statement of law or fact as to the possible or probable
outcome or effect of pending lawsuits or claims, or as to the merits of any of the included allegations.
State law prohibits non-attorneys from providing legal analysis, opinion or advice. Be advised that the parties to a real
estate transaction should engage in their own due diligence, which may include seeking the advice of independent legal
counsel, particularly regarding items A-C above.”
•HERO Program
25. AB 205 (Wood) Squatters Pilot Program Jurisdictions - In 2014, C.A.R. sponsored AB 1513 (Fox) in an effort to address the lengthy process required to prevent squatting or to
evict squatters. This measure created a three year pilot program in the cities of Lancaster, Palmdale and Ukiah that permits the owner of a vacant property to register it with local law
enforcement. It establishes a fee-based program for local government that permits an owner of a vacant home to register it with local law enforcement and have it monitored while it
remains vacant. It further requires timely action by these law enforcement agencies should the property be unlawfully occupied. As introduced, AB 205 proposes to expand the pilot
program to include the cities of Eureka and Fairfield and the counties of Humboldt and Lake.
Status: Assembly Judiciary Committee
AB 237 (Daly) Parcel Tax Vote Notification - Under current law, property owners who reside within a local jurisdiction receive notice of proposed parcel taxes with receipt of
their ballot pamphlet while non-resident property owners do not receive any notice. This measure would require a city, county or special district (e.g., school districts, hospital
districts, etc.) to provide at least 90 days’ notice of a vote to impose a parcel tax on non-resident property owners.
Status: Assembly Local Government Committee
AB 345 (Frazier) Continuing Education - Under current law, real estate brokers and salespersons are required to complete 45 hours of CalBRE-approved continuing education in
order to renew their licenses. AB 345 seeks to earmark three hours of a broker’s mandated continuing education for a course on the management and supervision of real estate
licensed activity. The bill also permits salespersons to elect to take a course containing relevant information to assist them in understanding how to be effectively supervised by a
responsible broker or branch manager.
Status: Assembly Business and Professions Committee
AB 607 (Dodd) Bonds for Unlicensed Employees - The Bureau of Real Estate’s current regulations allow an unlicensed employee of a broker, with written authorization, to
manage the broker's trust account if the employee has fidelity bond coverage that is equal to the maximum amount of funds to which the employee has access. This regulation is
interpreted to mean that the bond must be a zero deductible bond, meaning that the insurers are responsible for the first dollar lost. REALTORS® have reported that bond companies
will not sell bond coverage exceeding $100,000 unless the bond contains a deductible, usually of 1-5 percent. This measure would, among other things, allow bonds for unlicensed
employees with access to broker trust funds to include a deductible of up to 5%.
Status: Awaiting policy committee assignment by the Assembly Rules Committee
AB 685 (Irwin) Real Estate Law Cleanup - While current law permits the Bureau of Real Estate (CalBRE) to deny the renewal of a license to a licensee who has an unpaid fine,
it is not clear that CalBRE can deny an application for a license based on an unpaid fine. This measure would, among other things, clarify that CalBRE can deny an application based on
an unpaid fine, revoke an erroneously/mistakenly issued license, and add the filing of a criminal complaint charging a felony to the list of disciplinary activities licensees must report to
CalBRE.
Status: Awaiting policy committee assignment by the Assembly Rules Committee
AB 807 (Stone) Private Transfer Fees - Private Transfer Fees (PTFs) are fees imposed by an individual, developer, etc. that require a homebuyer and any subsequent purchaser to
pay a fee upon the transfer of a home. In 2007, C.A.R. successfully sponsored AB 980, which requires disclosure of new and existing PTFs and requires PTFs to be recorded against the
applicable property. However, new kinds of PTFs are now being used. This bill would expand the current PTF recordation requirement to include PTFs whose payment does not occur
upon a change in ownership or that are not based on sales price.
Status: Awaiting policy committee assignment by the Assembly Rules Committee
SB 146 (Galgiani) Team Names - In 2014, C.A.R. sponsored AB 2018 (Bocanegra) to remove ambiguity surrounding Fictitious Business Names (FBNs) by statutorily defining how
salespersons, with their broker’s permission, can use FBNs while also establishing clear standards for the use of “team names” that are not FBNs. This measure would clean-up and
clarify that "team names" not requiring an FBN for purposes of the real estate law do not require the filing of an FBN with their local county.
Status: Senate Business, Professions and Economic Development Committee
SB 474 (Wieckowski) Credit Bids - In 2014, C.A.R. successfully sponsored AB 2039 (Muratsuchi) addressing real estate short sales. That legislation, among other things, prohibits
companies from using "shill bids" (i.e., bids from non-bona fide purchasers) to drive up the price of the home being auctioned. A "credit bid" (lender bidding amount of their note at
the foreclosure sale) is exempt from the "shill bid" prohibition. This measure would define "credit bid" in statute.
Status: Awaiting policy committee assignment by the Senate Rules Committee
26.
27. The Realtor® Home
Washington D.C.
The National Association of REALTORS®, “The Voice for
Real Estate,” is America’s largest trade association.