Gene Wunderlich - Realtor®, Government Affairs Director

What a glorious time this is - end of a school year and graduation. You meet some of the most delightful young people at this time of year - too bad you won't see much about it in other media.

This morning I had the privilege of attending the 14th Annual Murrieta Student of the Year award ceremony presented by the Murrieta Chamber of Commerce. Ever month the Chamber, in association with numerous community sponsors, recognize an outstanding student of the month from our three current high schools. Today's event selects from among those recipients to recognize students who have made a truly outstanding contribution to their school and our community.

WOW! What a group. This morning 6 Murrieta students - a male and female recipient from Murrieta Valley, Vista Murrieta and Creekside, were introduced to a group of education, civic & business leaders. The recognition of their scholarship includes $1,300 in monetary awards per student as well as city, county and state proclamations and gift bags donated by business sponsors.

Here's a thumbnail summary of the very deserving award winners. I wish I had been taking notes.

• Vista Murrieta grad Brian Choi carries a 6.0 GPA. In addition to nailing straight A's in Advanced Placement courses, his list of accomplishments and accolades is a mile long. This son of immigrant farmers, Brian will be attending Harvard this fall.
• Creekside graduate Crystal Farr completed a spectacular high school career in spite of numerous difficulties. Among other goals, Crystal plans on volunteering for military service as part of a family tradition. After the ceremony we discovered that the 'difficulty' that led to Crystal attending the continuation school was her frequent absences to care for her brother, an amputee veteran. She will be attending San Diego State to be closer to her brothers hos[pital.
• MVHS' Nikki Salazar will be attending Stanford.
• Vista Murrieta's Ashley Scott will be attending Berkeley.
• MVHS Jacob Levy plans to pursue a career in law/politics/advocacy. He has not only posted a superlative GPA but has been a student activist on behalf of a number of causes during his matriculation. His teacher and Principal alike praised his ability to get diverse groups to reach common ground. If the state survives that long, I'd vote for this kid in about 20 years.
• Creekside's Miles Ten Brinke dropped out of school for 'a couple years'. When he finally decided to re-enroll in the continuation school, he 'found himself', as his teacher said. He completed the required coursework in months rather than years and has been attending MSJC since October.

Introduced by their Principals, both MVHS Superintendent Dr. Stan Scheer and our County Superintendent gave some words of encouragement. The students made a few comments on their plans and extended thanks to the sponsors, their teachers and especially their parents. To say these students are highly motivated, focused and possessing of poise far beyond their years would be an understatement. You come out of one of these events with a little more spring in your step - they give you a little more hope for a future generation.

Thanks also due to Margaret Jones, who has served as Program Chair for many years and Rex Oliver, CEO of the Murrieta Chamber for their long-time support of this event. Special thanks to Student of the Month Program, Inc. and its founder, Sally Myers of Sizzler Restaurants. It's a great accomplishment to make sure these outstanding student and future leaders are recognized and encouraged.

It's just a shame the only place you'll read about it is here.

A wonderful afternoon was had by all - or at least all of us who sat in on the Chris Botti concert at Thornton Winery in Temecula yesterday afternoon. It was one of those Chamber of Commerce kind of days. The temperature hovered around 80 but even those sitting in the sun didn't seem to mind as Cris Botti brought the music to the Southern California Wine Country. 

This show marks the 10 time Botti has serenaded us in the vines and, as a mark of his popularity here, he sold out two shows yesterday. We got a stage-side table for the afternoon show, enjoyed a primo bottle of Thornton's Cabernet - Merlot blend, a grilled shrimp sandwich and just grooved.

His band, anchored by long-time drummer Billy Kilson and 2 time Grammy Winner pianist Billy Childs, was as tight and as loose as they needed to be, playing everything from Botti's signature style jazz to some kick-ass rock & roll riffs by guitarist Mark Whitfield with a few tender moments thrown in for measure. 

One of those moments was when Botti was joined by violinist Lucia Micareli. Playing from the heart of the crowd, the violin/trumpet chase was as poignant and moving amid the rustling vines as it was when they played it amid the rustling programs with the Boston Pops orchestra just a few months ago. 

Botti also talked with the crowd and carried on a lively chat with a 17 year old trumpet player in the audience, imparting some career words of wisdom. Botti got his first big paying gig in 1985 when he was called up to play with Frank Sinatra for a 2 week set at the Universal Amphitheater. He quit college for that $200 gig - a move he doesn't always recommend but one that worked for him. He hit the big time playing in Sting's world tour in 1995, then opened for Sting on his subsequent tour starting in 2000. He says he's been traveling virtually non-stop for 5 1/2 years and doesn't regret a minute of it. 

Sometimes when you do something that much for that long, you can slip into a routine. Not Botti. The show was fresh, totally new from last year, played to perfections and enjoyed by just a couple hundred in a very intimate setting. 

If you're planning to be in the Southern California Wine County this summer, click on the Thornton Photo to pull up a list of Smooth Jazz in the Vines concerts. If you like what you see here, give me a call. I can help you relocate here permanently.

Chris Botti is also on tour and if you click on his page you can find out where he's going to be the rest of the summer too. I'm getting too damn old for the big stadium shows anymore, but an afternoon in the vineyards, sipping a little vino rosso and listening to smooth jazz? Yeah I can still get down with that. Life's too short. Check it out your own self. 

Here's a video of the Chris Botti & Lucia Micarelli duet from the Live in Boston concert.

Today marked the 6th Annual Riverside County Water Symposium. The event featured a series of panels and speakers discussing the water challenges facing our state today. The keynote was delivered by Michael Chrisman, California Secretary for Natural Resources. 

Riverside County Supervisor Marion Ashley set the tone by stating that we are literally playing Russian Roulette with the Sacramento Delta. One little mis-hap, a flood, an earthquake, terrorist threat or an angry gopher could disrupt the water supply to 25 million Californians and dramatically impact the economy of this state for decades. As he noted, we'd be up a creek all right but it would be a dry creek. We can't conserve our way out of this mess - we must address and resolve some of the fundamental problems with our systems starting with the Sacramento Delta. When the Delta fails - not if but when, it will make Katrina and Andrew look like childs play in terms of damage to the area, the ecosystem and the state's economy. 

I don't think it comes as a big surprise that our water systems, much of it built 30 - 50 years ago, was never designed or intended to meet today's demand. And while environmental concerns have acted to restrict the flow of existing water (see Delta Smelt), those same concerns have prevented us from developing new resources or re-working other solutions (peripheral canal). In the past 100 years we've relied on big projects, big technological developments and throwing big money at it. That's not viable in the 21st Century where we face higher demand with fewer resources and less money. 

One thing they all agreed on, we've witnessed the end of the era of cheap water. You are no longer assured of getting all the water you want - rather they'll be working hard just to get you all the water you  need, and at a price you can still afford. After all, Western Municipal, which provides most of  Southern California's water to our local providers, is implementing a 19.7% increase this September followed by another 21% jump in 2011.  Tiered pricing will become the norm with conservation being rewarded while profligate use will be penalized. After all, upwards of 80% of domestic water use is OUTSIDE the home with as much as 50% of that is wasted in run-off, over-spray, etc.  If homeowners worked their land like farmers, we could dramatically decrease water usage. But even reduced usage will eventually result in higher bills as infrastructure improvements are required. 

Some positive notes - from John Rossi, GM of Western Municipal - 'In every crisis is an opportunity'.  This may be the best time in 25 years to actually fund and implement some real solutions in the Delta in spite of California's economy. But the timing is critical and they are forming coalitions to get active on this NOW. They are encouraged to be working with some of the groups that have been adversaries in the past but have a new view of what can and should happen to the Delta going forward. They are asking Sacramento to stop politicizing the issue. The resource is neither a Democratic nor a Republican resource and the resolution to the issue will be derived by working together. They also wish Sacramento would focus on getting it's own act together and quit issuing new and/or redundant requirements and compliance reports about issues they have no clue. Well, good luck on that one. 

They are further encouraged by the possibility of obtaining some bail-out funds for critical projects. However, as one noted, the structure of the bail-out rewards the inept. If you've managed your business right, you probably don't qualify. (Hmmmm, where have we seen that before?) For example, one of the requirements to qualify for Federal funds is to have 'shovel-ready' projects - yet few associations or water departments can afford to plan and implement a project to a shovel-ready state without having had the funding mechanism for the project in place from the out-set. It's one of those catch 22's - you can't develop a project unless you have money but you can't have money until your project's developed. Duhhhh. 

Secretary Chrisman noted that we have recently had two prominent California water experts placed in high Federal office, which bodes well for some of our projects. The new Director of the Department of Water Resources has mandated that human costs be factored into consideration along with the customary environmental impact and structural costs. They're also evaluating California Water Law, which currently ranks as the most complex water law in the country. Our combination of old British Water Law, adopted in the 1850's, usufructuary, riparian and appropriative water rights creates quite a challenging environment to work in. He also noted that the Endangered Species Act has been used at times as a very blunt instrument to craft laws and they are petitioning for reconsideration of the Delta Smelt and other 'endangered' species. 

As with so many issues facing California today, we are at a crossroads in our water supply. As Mark Twain opined, "Whiskey is for drinkin', water is for fightin' over." It looks like we're coming into the fightin' season for California water right now and, as with all our endeavors, we as Realtors had better be at the table with them - or we'll sure as hell be on the menu.

It was my good fortune to catch the elevator in the Wardman with Dr. Lawrence Yun last week. As we strolled to the Omni we exchanged pleasantries - I was greatly looking forward to his Economic Update on Thursday morning. When he noted where I was from he lit up - 'Oh, I know Riverside County - it's one of the areas I study to gage the market.' He proceeded to describe our market as he saw it and was solicitous of stats pertaining to Southwest County. His summary of our area was right on the mark and I was impressed at the detail in his commentary. That he monitors our area - I don't know if that's good or bad.

As usual, Dr. Yun's presentation was well attended and comprehensive - at least I was impressed. Of course I used to enjoy David Lareah too so what do I know. I realize Dr Yun doesn't have the most sterling reputation for perspicacity but I always find him enjoyable and - if you factor in his advice with that of 3 or 4 other experts you'll either get somewhat closer to the truth or you'll get stark raving bull goose looney. So if you take his remarks for what they're worth, you'll still come away with a good education from one of the best. After all, you don't get named one of the nations top 10 economic forecaster by USA Today by being wrong all the time. If you can't learn something from this man, you can't learn at all. 

Anyway, you can watch a video of his morning meeting here: Mid-year Economic Summit - Dr. Lawrence Yun.

Or if you would like a PPT copy of his slides, check here: Mid-year Economic Summit - Presentation.

But for the condensed version, touching briefly on the highlights and the lowlights as well as the inevitable running commentary from your host - read on:

Dr. Yun began his remarks asking if we are on the cusp of a recovery or are we poised to head even further down as the job market sours. His prognosis? We will see the nationwide jobless rate grow to 10.5% by late this year followed by a generally recovering economy with that recovery stretching over several years. But he warned that the recovery could, COULD, be quite robust. More on that later. Early summer will be the test period. By then a number of factors will occur that will shape the next 12 - 18 months. Things like the sliding labor market, the impact of the commercial real estate market, banks that have money that won't lend or banks that have no money lending, the potential tsunami of new foreclosures, things like that. But he acknowledged there are lots of moving parts and the outlook is cloudier than ever before. I felt better right away. 

Nationwide the level of sales is back to 1997-1998 levels. From a peak of over 7 million units in 2005, sales were under 5 million units in 2008. But as he also pointed out, we have 30 million more people than we did then and that points to a pent-up demand. We also need 1.3 - 1.7 million new units every year and the past two years we've produced only half that many. Again, the need is there. As you look at the historic trendline and note the sharp spike up from 2004 - 2007, we have dropped back down to what would be considered a normal position on that trendline. Unfortunately just as we spiked up, we are now overshooting downward. This yo-yoing effect is what may produce a very strong recovery, a sling-shot recovery. Any further declines will be the result of over-correction.

Yun also pointed out that prices never really got out of line in several major markets across the country. But as the slump drags on, even those markets are suffering from the perception that their properties are overvalued. He does believe that some states like California have reached a tipping point. Price bottoming is occurring, people know it's a great time to buy but they don't feel that feeding frenzy yet. There are several factors that could push the button to get that tipped including: 

1) pent-up demand. 

2) banks loosening their purse strings to a more normal stricture. 

3) the lowest interest rates since Eisenhower was President

4) aging population aquiring 2nd homes 

5) the new Baby Boom (did you know the HS graduating class of 2010 will be the LARGEST graduating class ever. Who's going to be selling them homes in 10 - 15 years.) 

6) another 30 million prospects from the BRIC countries (Brazil, Russia, India, China). As the economies of these nations improve they will add 30 million people to their middle class - people whose goal with their newfound wealth is to acquire a vacation home in the United States. 

Yun briefly chimed in on the 'Too Big To Fail' issue noting that 75% of our assets are owned by just 10 banks. Are they too big? He also opined that sometimes those too big to fail are also too big to govern. Should those 10 banks be broken into smaller, mopre responsive units and should the government do the same thing with Fannie & Freddie? In addition to lending institutions, he specifically noted the economies of California and New York as prime examples of this dichotomy - too big to fail / too big to manage. 

He concluded his remarks by noting that that the global economy truly is here to stay. Fiscal Isolationism is no longer possible nor will it produce the results we need. He also stated to 'Demography is Destiny', you may dispute some of the particulars or debate the timeframe but the fact is there's a whole new demographic coming into play and you can call them GenX or Y or whatever but they are the new, improved and supersized Baby Boomers. 

Finally he left with  words of caution. No matter how the market looks to you at the time - STAY WITHIN YOUR BUDGET.