John Occhi, ePRO, Hemet-San Jacinto CA Real Estate, 951-443-6259

Real estate sales in the Hemet - San Jacinto Valley, CA in the South West Riverside County region of the Inland Empire in Southern California has remained flat for the last couple of weeks.

The Median List price continues to hover around $136,000 while the average is somewhat off based on a couple of very expensive properties - that are anything but typical for this local market. Many of the sales are bank owned REO Listings and most of the Active Listings are Short Sales.

Here is a brief summary that is the cover page to the 13 page detailed market report that anyone can sign up, for free and have delivered to their email box every week - tracking all of the important numbers pertaining to either the Hemet or San Jacinto real estate market...and yes, there is a difference and it may not be what you expect.

So please visit JohnOcchi.Com and sign up for the market report, on the home page of my website.

Here is another sample of some interesting data that can be found in the free market report that can be sent to you each week, for free...

I was surfing around and think I found the next real estate video that will be taking off viral - you have got to see this - just be prepared for your sides to hurt from laughing so hard - it is hilarious. This Video highlights the problems with buying a bank owned home in the current market - take a moment and enyoy the laugh...just don't get mad at me just because I am an REO Listing Agent

The California Association of REALTORS (C.A.R.) is holding it's annual EXPO in San Jose this year and speaking at the EXPO Luncheon this afternoon is the C.A.R. Chief Economist, Leslie Appleton-Young.

Since I am not there, I am depending on industry insider, Inman News to keep me up to date. Considering the luncheon was not scheduled to end until 1:30 this afternoon and I received my email update at 1:05 p.m., I'm guessing this is pretty current news.

Admittedly the C.A.R. has an agenda to turn lemons into lemonade to support its declining membership. So the projections for 2010 are of course optimistic and I am sure will be quoted by the mainstream press throughout the next news cycle and a source for future quotes and sound bites for some time to come.

I'm not going to bore you with those projections because they are just that PROJECTIONS that have a caveat. According to Inman News, Leslie Appleton-Young said that, "The wild cards for 2010 include foreclosures, loan resets, the labor market, the California budget crises and the actions of the federal government."

SO, WHAT ARE THE ODDS?

So lets see...if there aren't as many foreclosures next year, I guess the market will be better. As long as interest rates stay low, then again, the market will be just peaches and cream.

If every dead beat (I'm being fascias - don't get mad at me) out there on unemployment goes out and gets a job then I guess we can expect the housing market to be better as well. Here is a blog article I reposted: The Effect Of Unemployment Upon Housing For 2010 that is right on the money.

As far as the California Budget Crises...well that's not going to fix itself with the politicians we have collecting paychecks in Sacramento. Does anyone know that meg Whitman of eBay fame has announced her candidacy for Governor? I think that will be great - we can get government moving again bases on the highest bid...or maybe someone will just elect for the ‘buy it now' feature of our new world order? But this is yet another blog to write.

And then my favorite ‘wildcard' that will have a role in determining the favorable projections of the California Housing Market next year is the Federal Government. YIKES - she sure got that right in labeling those boys and girls in Washington right by calling them WILDCARDS!

WHAT ELSE MIGHT HAVE AN IMPACT?

I for one think that one of the biggest and yet most silent factors that have anything to do with our American economy - to include our housing crises has to do with foreign investors who have been buying up our debt pretty regularly. Does anyone know what will happen if the world - or lets just say China - STOPS buying our debt?

I do believe there is "New World Order" shaping up - but unfortunately the wars, terrorist acts and skirmishes that draw the headlines and feeds the news frenzy is not where we have our real changes taking place. Rather I believe it is economic. Now I am not an economist and not pretend to understand the deep mechanics of any of these theories bouncing around - but I was taught many years ago that "He who controls the Gold sets the rules" Unfortunately, there is not much Gold left here for us to control and this is why we are slipping away in our status of the world leader

2010 - FROM MY POINT OF VIEW

Well since I've done such a good job of discounting what I read, I might as well put my neck on the line and share my own personal thoughts. Now as a disclaimer, I can't speak as a local expert for the entire national real estate market...or even the entire California real estate scene. What I do claim to be a local expert in is the section of the Inland Empire Region of Southern California in South West Riverside County that I live and work in - the Hemet - San Jacinto Valley, CA.

Our real estate market has traditionally been one of the lowest price points in all of Southern California. As a result, we probably had more than our share of sub-prime loans buying up the new construction from earlier in this decade. As a result, I believe many of the homes that will ultimately be foreclosed on - already have been - in the Hemet San Jacinto Valley, CA.. Not to say that we still don't have a huge inventory of homes that will come on the market in the next year as bank owned homes for sale, commonly referred to in the undustry as REO.

My personal belief is that we have not seen the bottom of the market. We have seen a steady decline in values for the past two years now Only recently have we seen the market flatten out and even inch slightly higher with each new listing that comes on the market as the sellers hold out for their asking price.

I believe we will possibly see an increase in home values of a very small degree, further fueling the misconception that the housing market is on the rebound. In August, I wrote The Next Wave of Bad Loans - Option Arms which very clearly spells out a lot of problems in our future for the next few years...unless of course the great WILDCARD in Washington decides everyone should just be given their house (gosh, I wish I bought a bigger house now) then we won't have to worry about the resetting of the Option Arms.

The other serious issue facing the housing market today is the ‘strategic default', which I covered when I wrote "strategic defaults - whoda thunk?" the end of last month. This is so serious that I believe it should carry the same weight as our fearless leaders in Sacramento and Washington and move this up to full WILDCARD status.

Once the market finishes flattening or even showing some weak signs of recovery there will no doubt be another race to the bottom of the market - as all of the loan modifications and short sales in the world won't be able to save all of the homes that are going to change hands in the next 3 to 5 years as a distressed property. We still have a serious free fall ahead of us.

Just telling you the way I see it from where I sit...just one REALTORS® opinion...

Whats Yours?

Congress has another band-aid they want to put on the economic crises this country and the world are currently experiencing...at a cost that would be picked up by a segment of the population that can least afford it - first time homebuyers.

The goal of a new bill, H.R. 3706, introduced by Rep Scott Garrett (R-NJ) on October 1, 2009 would raise the minimum down payment for FHA backed loans from the current 3.5% of purchase price by over 42.8% and require buyers to raise 5% just for the down. The bill, is known as the "FHA Taxpayer Protection Act of 2009"

Federal Reserve Chairman Ben Bernanke, appearing before the House Financial Services Committee, stated, "Given the low down payments, there is greater risk of loss there, which will be borne by the taxpayer." (I really wish someone could tell me who the FED is and why does he have so much power. I never voted for him - did you?)

Now I do not want to split hairs here as I do not have statistical data in front of me at the moment, but I am confident that everyone reading this will agree with me that the majority of FHA Loans currently being written are by first time homebuyers. I know that in my own busy team office, we have not written an offer with FHA financing that wasn't for a first time home buyer...all year long. To be honest, none come to mind for any move-up buyers, at all. Typically the move-up buyer has more cash to put into their new home - usually from the sale of their prior home. Well, we all know the story there - so again, no need to belabor that issue.

The WOLF in WOLFS Clothing

This big bad bill is being portrayed as hurting the first time buyers by increasing their down payment level to the aforementioned 5%. Well this bill is even uglier than that with its restrictions of closing costs and prevent the buyer from using FHA money for these closing costs - which can run up to 6% of the purchase price.

So, What is the Real Problem?

My problem is I agree with much of what the bill represents. I for one do not believe that owning a home is a right...and certainly not a right that should be carried by the taxpayers. I believe that Rep Garrett is 100% correct when he said "homeownership is a noble goal". Of course there was a ‘however' - which I still agree with. He went on to say, "However, the benefits of promoting homeownership using government subsidies must be balanced against the potential risk of insuring less creditworthy borrowers and exposing the American taxpayer to that risk. As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage. In trying to find a reasonable balance between the current, extraordinarily low level and a level that would ensure a significant reduction of risk to the taxpayer, I am introducing legislation to increase the FHA down payment requirement to 5%."

The problem I have is whey does the government have to take this battle down to the lowest common denominator? Why not pursue the injustices of Wall Street and Detroit? Why not look at our foreign policies and determine if we can't do the world more good taking care of our own for a few years so we are once again healthy enough to take on the issues of the world.

Again, I don't have numbers here and at the risk of leaving out some very important injustices, I just want to ask why they think that me and my neighbors can fix all of these problems. Just give us the same health plan they have and let me do my job...is that too much to ask?

RealtyTrac, an online leader in tracking the statistics of Foreclosed Homes across the country publishes a heat map to show what areas are the hardest hit around the nation.

Back in June, 200y, early in my relationship with the banks as an REO Listing Agent, I published a blog post showing the first map I had seen on the topic. Being in California, I was actually surprised that we were not being the trend setter that we are know for.

JUNE, 2006 FORECLOSURE HEAT MAP - REALTYTRAC

A little over 2 years later and California is right there at the very top of the pile with more bank owned homes and foreclosures than many of the states combined. Although RealtyTrac has changed the colors of their legend, it does appear that every state has some sort of problem with foreclosed homes. This is what the map looks like today.

OCTOBER, 2009 FORECLOSURE HEAT MAP - REALTYTRAC