Yhe American Dream - Still Alive

June 30, 2008

As we begin the first week of July 2008 during which we Americans will celebrate the 4th of July, I though I would look into the vision expressed by the founding fathers who drafted the Declaration of Independence and how that vision relates to present day concepts of the "American Dream".

Perhaps the most cited statement in the Declaration of Independence is the statement of mankind's "inalienable rights of life, liberty and the pursuit of happiness". As settlers came from the "old world" to the "new world", they very often came to share in these "inalienable rights".

Early on, the American Dream was a belief in a freedom that allowed all citizens and residents in the U.S. to achieve their goals of happiness and prosperity through their efforts and hard work. The phrase "American Dream" was coined by James Truslow Adams in his 1931 book "The Epic of America" Since the 1930s, home ownership has been a component of this "American Dream".

In the rush to home ownership in this 21st century, there was a belief that everyone should be allowed to share in the "American Dream", i.e. home ownership.

I suspect that too much emphasis was put on owning a home as achieving the "American Dream" without recognizing that owning a home may or may not be the crucial component. However, no matter how I analyze the components of the "American Dream", the desire to have a place to call one's own is still very much the dream of most people.

Tomorrow, I will trace the way that home ownership became attainable for the "ordinary man".

"There's No Place Like Home"

June 27, 2008

The 2008 season of the Redlands Bowl Summer Music Festival opens this Friday with a program entitled "Symphonic Songbook". The theme for this year's season is "There's No Place Like Home". The opening program will feature Frank Fetta conducting the San Bernardino Symphony with special guest vocalist Lorna Luft, daughter of Judy Garland. The program will include great American popular hits including selections from the musical "Wicked".

As always, there is no admission charge and open seating. However, we are reminded that the concerts are not free. The red bowls will be passed at intermission and the Community Music Association welcomes your generous support.

"It Was the Best of Times, It Was the Worst of Times..."

June 26, 2008

The famous quote that comes from the opening of Charles Dicken's novel "The Tale of Two Cities", may be fitting for our times. The sentence in its entirety reads: "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness,it was the epoch of belief, it was the epoch of in credulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair."

It seems to me that I could cite examples of each of these adjectives, However, that would be more of an essay than a blog post.

Just taking the best of times and the worst of times as a description of the housing market, will be sufficient for now. It is the best of times if you are a buyer with a good credit score and at least 3% down for the FHA mortgage. You might even be able to use a Nehemiah or HART program for down payment assistance. An interest rate of 6.5% is still a great rate. The inventory of homes in the Riverside/San Bernardino market in the $350,000 or less range is truly remarkable. Compared to the availability of homes in these price ranges just two years ago, this is clearly the best of times.

As for the worst of times - the loss of a home by a homeowner is tragic. The loss of equity by homeowners who still have the ability to make their monthly payments is unnerving. The tumult in both the credit and housing markets creates an unsettling environment for everyone.

The optimist will survive and flourish in the future, the pessimist will continue to bemoan the times. Be an optimist, find the best in the situation and move on.

Keeping Your Garden Blooming

June 25, 2008

With the arrival of summer and scorching temperatures it has been challenge for me to keep my garden from drooping. By afternoon the Shasta daisy are looking thirsty even though the sprinklers ran in the morning. From Yankee Magazine's "Panty Hose, Hot Peppers, Tea Bags, and more - for the Garden" here are some suggestions. For the already established plants or the plants already in the ground, make a Water Tower. Take a 2 liter plastic soda bottle and remove the label. (That's so the bottle is unobtrusive.) Cut the bottle in half horizontally. With the cap on, make a tine hole in the cap with a sewing needle or slender nail - whatever it takes to allow a drop of water to drip from the bottle. Place the bottle, cap down, several inches into the soil, then fill with water as needed. This will give moisture to the nearby plants and will be relatively unobtrusive.

When planting new plants create a mini bog under each plant with a plastic or metal tray from the house - pie pans, bottom quarter of plastic milk jugs, etc. whatever can hols an inch or two of water and is several inches across. Place the container in the planting hole a few inches below where the roots will be at planting time. Plant as you would normally. This is great for sandy soils where the water percolates deep and far from the plants roots.

The above mentioned book is a wealth of great ideas. One great looking flower garden gives the entire neighborhood an incentive for beautification.

Inland Empire History

June 24, 2008

In yesterday's post I responded to a colunmist's inclusion of "Inland Empire" with a list of oxymorons. Upon investigation of the terms, I concluded that the designation, "Inland Empire" did not fit the definition of an oxymoron. If you click on the comments for yesterday, you will find a great description of why our Riverside/San Benrardino county area is the "Inland Empire".

To recap how the designation developed, I thank the commentator and will echo the comments using information supplied by Wikipedia. "The "Inland Empire" was first used in the 1950s to distinguish the area from the Greater Los Angeles Area, and from Los Angeles itself. The"Inland" part of the name is derived from the regions location about 60 miles inland from the Pacific Ocean and east of Los Angeles. "

The "Empire" part had to do with the strong economic base that had already developed by the 1950s, particularly in realm of the citrus industry. Kaiser Steel at that time was also a major producer. With a number of air force and army bases located in the two county area, the defense industry contributed to the region's growth and economic strength. The diverse geography also contributed to a growing tourist component in the economy. While "empire" is indicative of political power, economic strength also creates "empire".

Today, our region is in the top 20 economic areas in the world. Hooray for the "Inland Empire."

Oxymorons and the "Inland Empire"

June 23, 2008
Last week I was reading an editorial the subject of which was the housing slump and the economy in general. The final sentence in the editorial listed some terms that might be oxymorons. The last two words in the column were "Inland Empire".
This whetted my curiosity about the term "oxymoron" and why one might think that "Inland Empire" was such a term.
"Oxymoron" is defined as a combination of contradictory or incongruous words; Something (as a concept) that is made up of contradictory or incongruous elements. Some commonly used oxymorons include same difference, jumbo shrimp, deafening silence, accidentally on purpose.
Now, I have always wondered how "Inland Empire" came to designate the two county area of Riverside and San Bernardino. I am curious enough to research this and will post what I find. If any of you know, please click the comment and let me know. But, back to the oxymoron status of "Inland Empire". Clearly we are inland California. How did we become an empire? And what is contradictory about an empire being located "inland"?

According to Wikipedia, scholars debate about what exactly constitute an empire. It began as a state that extends dominion over populations distinct culturally and ethnically from the culture that held the power. Other definitions emphasize economic or political factors that create the uniting of populations.

It seems that the combination of Riverside and San Bernardino counties have economies that do create "empire". For me, "inland" and "empire' are not contradictory terms; hence, no oxymoron.

A Few Fun Opportunities for the Weekend

June 20, 2008
There are a number of small lakes in the Riverside/San Bernardino area. This weekend, the state department of Fish and Game has stocked the lake at Fairmount Park in Riverside with two tons of catfish. On Saturday, the Family Fishing Derby will be held. One of those fish has been tagged with a certificate for $1,000. There will be other prizes given at the fishing derby. The Family Fishing Derby will be held from 6 a.m. to 10 a.m. and from 10 a.m. to 2 p.m. it will be Dad's Day at the Park. Bring your fishing poles and bait. Children younger than 15 can fish without a license. You can register today at the Riverside Parks Department headquarters, 3936 Chestnut Street or at Fairmount Park from 5 a.m. to 8 a.m. on Saturday. For more information call 951-826 - 2000/
Another fun event being held this weekend is the El Carmelo Retreat House Summer Festival in Redlands. Saturday and Sunday from noon until 8 p.m. there will be music, food, games, a magician and a white elephant sale. The El Carmelo Retreat is at 926 E. Highland Avenue in Redlands. Check it out. 909-792-1047

Recourse or Non Recourse -What's the Diff?

June 19, 2008

Recourse and non recourse are terms used to categorize loans. I suspect borrowers in the past may not have paid much attention to these categories.

However, in this "default episode" we are presently experiencing, these terms may take on epic proportions. So what's the difference?

A non recourse loan is one in which the investor/lender, in the event of a borrower's default, can only take back the property that was the security for the loan. In California, all purchase money deeds of trust are non recourse loans. The lender/investor is prohibited from attaching any of the borrower's other assets.

In a recourse loan, the lender/investor can take back the property. In the event that the borrower owes more than the lender/investor can recoup in the sale of the property, the borrower's other assets will be at risk. How many borrowers were aware that once a loan is refinanced it becomes a recourse loan?

Since it is expensive to go to court for a judgement, many lender/investors do not exercise this right. Some foreclosure counselors are advising short sale clients to obtain a written statement from the lender that the pay off amount satisfies the total debt owed.

It will be interesting to observe how this recourse/non recourse "default episode" plays out.

The "Default Episode"

June 18, 2008


According to an article that I read recently, "default episodes" have occurred every 12 to 15 years. Because they occur so infrequently the credit markets seem never to be adequately prepared. When these "episodes" occur government as well as the banking community develop plans to alleviate the hardship that is experienced by homeowners and creditors.


Mortgage insurance that was required for all loans with less than a 20% down payment was instituted to protect lenders from the risk of loss when a homeowner defaulted. In our 21st century housing cycle, mortgage brokers and borrowers developed a way to avoid paying the mortgage insurance. (It was still a requirement on FHA loans, but the maximum mortgage amount was less than most selling prices so FHA loans were few and far between in California real estate markets.) Buyers who did not have a 20% down payment would finance with an 80% first trust deed and a 20% second trust deed or an equity line of credit. Mortgage insurance was avoided.


As lawmakers and the credit market reflect on solutions for the future, it is likely that easy credit and 100% financing will be extremely difficult or impossible to obtain. As of today, there are still 100% loans available, but the government and the banking industry are anxious to change the requirements. New mortgage insurance programs are being discussed. It is a little like locking the barn door after the horse has gotten out.

Have You Checked Your ARM Lately?

June 17, 2008
I am not posting about your throwing arm. I am posting about that Adjustable Rate Mortgage (ARM) you obtained when you purchased your home or when you refinanced your home. For anyone who reads the newspapers or listen to the TV and radio commentators, ARMS are the cause of the rise in foreclosures. With interest rates being relatively stable for the past several years, I was somewhat perplexed until I realized that ARMS were written with teaser (1%) start rates, but really the note rate of the loan was 6-9%. No wonder homeowners were finding that their monthly payments jumped significantly when the teaser rate period came to an end.
So.....if you have an ARM, now is the time to check out what the reset rate will be and when the reset will occur. If it will be soon and significant, it would be wise to call a lender and check on current rates. If you still have equity, you may be able to obtain a better mortgage. If you don't have equity, the lender may be able to aid you in finding one of the programs that can rewrite upside down loans.
Don't put your head in the sand. Know where you are at and take the steps that will take your home ownership into safer territory.

Energy Audits

June 16, 2008

The California State Legislature has been considering requiring homeowners to have an energy audit. At some point in the legislators discussions, they had contemplated making the energy audit mandatory at the time a property was sold. The bill (AB2678) as it is now being considered no longer makes the energy audit condition of sale requirement.

With regular gasoline reaching $4.60+ a gallon, the energy crunch has certainly gotten people's attention. I would suspect policy makers will be looking at additional ways to cut back on our energy usage. With drought conditions in many areas of the state, water conservation is also a hot topic.

Here are a few water and energy saving tips that don't cost money and probably could save you some money.

Close windows when heating and cooling.

When going on vacation, shut off or unplug appliances and computers.

Fix defective plumbing and/or dripping faucets.

Use full loads in your washer and dryer. Be sure to clean your dryer's lint trap.

The following will cost, but will save you money over time.

Put water aerators on each of your faucets.

Replace incandescent light bulbs with compact fluorescent bulbs.

Put an insulating blanket around your hot water tank.

You can always visit your utility company's web site for more energy saving suggestions.

If Dad is a Golfer

June 13, 2008

Sunday is Father's Day and it is sometimes difficult to figure out how to honor dear old dad. Here is a thought. The Redlands Benchwarmers will be holding their 25th Golf Tournament and banquet on Monday, June 16th at the Redlands Country Club. An entry donation is $200 or $800 for a foursome. This includes a golf cart, green fee, gifts, tee prizes, banquet and awards. If Dad is a golfer, he would certainly enjoy this gift and the family would know that they had supported a worthy cause.

For more information, contact Bill Bracy 909-792-7793 or Greg Horton at 909 -991-8397.

Resources for Recycling

June 12, 2008
This morning's Wall Street Journal had a small article posted by Nancy Matsumoto giving some resources for folks who want torecycle unused building or renovation materials.
I quote from her article: "There has been a growing interest in the "Freecycling" process: repurposing potential landfill material by putting it in the hands of needy individuals or organizations.The nonprofit www.freecycle.org is the largest of a number of sites dedicated to connecting donors and recipients. The site uses Yahoo! Groups to link you to members in your community, with whom you can arrange personal drop-offs or pick-ups. Habitat for Humanity (www.habitat.org/env/restore.aspx) will connect you to local brick-and-mortar "ReStore" where you can donate leftover building materials or buy them for a fraction of their retail cost....For a list of reuse organizations nationwide, check www.reDo.org and click on "Find a Reuse Center." ....
Not having been in the need of ridding myself of building materials, I have not checked out these sites. Hopefully they prove useful to you if you have a need. Recycling is such a benefit to all of us.

A Short Sale and Selling Short

June 11, 2008

I had a question the other day about "short sales". It was from a friend who is a fairly sophisticated investor in the stock market. he didn't quite understand how a short sale worked in real estate. He did understand what "selling short" or short sales in the stock market work.

A short sale in the stock market is generally a sale of a stock you do not own. Investors who sell short believe that the price of the stock is going down. When you sell short your brokerage firm loans you the stock. If the price of the stock drops, you can buy it back at a lower price and make a profit. If the price rises, you still must buy it when your borrowed time is up. In that event, you take a loss.

A short sale in real estate is an agreement between a borrower and a lender. If the amount that a homeowner owes on the mortgage is greater than the present value of the property, the homeowner negotiates with the lender and the lender agrees to a reduction in the pay off amount. The transaction is called a short sale.
Real estate short sales seem to require lengthy escrows as there may be more than one lender or investor who must agree to the reduction of the loan amount. As this declining real estate market unwinds, lenders are setting up loss mitigation departments. Short sales can be a useful tool for both the borrower and the lender to cut their losses. However, unlike stock market short sales, short sales are not a strategy for profit making. They are a strategy for cutting losses.

For the Upside Down There May Be Hope

June 10, 2008
I was speaking with a homeowner yesterday who was excitedly telling of how the lender had renegotiated her loan and now she can stay in the house and it will no longer be in the process of foreclosing. I should have asked "Which lender?" but I did not. Our experience has been that some lenders have set up loss mitigation departments that are staffed with knowledgeable people who are willing to look for solutions that keep owners in their homes. Other lenders seem to give owners looking for help the runaround.
You may have heard of HOPE NOW. It is an alliance between counselors, servicers, investors and other mortgage market participants to maximize outreach efforts to at-risk homeowners and help them stay in their homes.
At-risk homeowners should contact their lender as soon as they know that they will have difficulty meeting their mortgage payments. The sooner you call, the more options that will be available to you. You can also call the Homeowners HOPE Hotline - 1-800-995 HOPE. This hotline is staffed by HUD approved credit counselors who can guide you through possible options such as a loan workout, a loan modification or a repayment plan.
ACORN is another organization that is helping at-risk homeowners. Locally they can be reached at (909) 806-4715 or their web site at www.acorn.org/sanbernardino.
Lenders really do not want your home back. They know that they will lose more money in a foreclosure than they will in a short sale or in some other modification of the loan. I encourage owners who really do not want to move to contact their lender directly or to take advantage of the help that HOPE NOW and ACORN offer.

Desire, Greed anad Fear

June 9, 2008

Desire, greed and fear seem to me the emotions that drive the market place - any market place not just the real estate market.

As human beings, we need food, clothing and shelter. This need translate into desire and the ways in which we satisfy those desires. In the real estate market place the desire for the location, the amenities and the style creates the value that folks put on a property. Eventually the demand exceeds the supply and the competition creates rising prices. As prices rise and people see their property increase in value, greed seems to enter the picture.

The rising prices create fear. Fear that one will pay too much, fear that one will lose out in the ability to purchase, just fear that one will lose.

The present real estate market is influenced greatly by the fear factor. Buyers are afraid they will pay too much and lose money. Lenders are afraid they will lend money and the borrowers will be unable or unwilling to make the payments.

At some point, desire will return because the need will overcome the fear. Perhaps we are just about there.

So Much To Do - So Little Time

June 6, 2008



No reason to sit home and complain about the high cost of gas. There are festivals going on throughout the Inland Empire. Load up your car with family and/or friends and have some fun.


Tonight, June 6 from 6 p.m. to 9 p.m. you can enjoy the music of The Tornados for the "Surfin State Street Party. They will be playing in the Ed Hales Park at 5th and State street.


If you live in the Fontana area, I am told that the 95th annual Fontana Days Festival will be offering rides and food and Saturday morning you can participate in the half marathon , a 5K race, a 5K walk or a 5K Family Fitness Walk. At 11 a.m. following the races there will be a parade which will end up at Veteran's Park. For more information go to http://www.fontana.org/.


Starting this evening at 5 p.m. - 10 p. m. the Temecula Valley Balloon and Wine Festival located at the Riverside County Parks Lake Skinner Recreation Area will kick off the celebration of balloons. Saturday and Sunday at 6:30 a.m. you can see the balloons take flight. An awesome sight !. http://www.tvbwf.com/ for more information.


As the population of the Inland Empire has grown, so too have the number and variety of family events. Lucky us !

So You Want to Buy A Foreclosure Property

June 5, 2008

As real estate agents in the present real estate marketplace, we frequently receive calls from our clients wanting to purchase properties that are either already bank-owned or properties that are in some stage of foreclosure. One has only to read the daily newspaper to see the columns and columns of notices of trustees' sales. The question is "Are these good deals or not?"

First: to purchase a property on the court house steps, a potential bidder must have the total purchase price in cash or in a bank cashier's check. The lender gets the first bid which is generally the amount owed to that lender. Sometimes the lender who is foreclosing is not the only lien holder on the property. If one buys it, one also buys any senior liens. It is a must to order a preliminary title report from a reputable title company.

Then: Once a lender has received title to a property in a foreclosure sale, the lender will do the necessary paperwork required to offer the property for resale. This can take several months. Once the property is offered for resale, offers received by the bank must be scrutinized and this also can be a timely process. If the lender has priced the property under the market value, one may be competing with other buyers in a multiple offer situation. It is not like dealing with an owner/seller who will respond in a timely manner. The lender's asset management department has employees who are assigned to files and who have procedures to follow. (These employees do not have a vested interest in getting the property sold quickly.)

Patience is the virtue that buyers of foreclosure properties must have. Often buyers become disenchanted due to the long delays between making their offer and knowing whether the offer has been accepted by the lender.

Sales Statistics for the Month of May, 2008

June 4, 2008
I am happy to say that the number of transactions reported as closed sales in the IMRMLS increased in most areas during the month of May. We are still significantly off the pace of closed sales from the peak years or 2004, 2005 and 2006, but an increase in volume may be a sign that buyers are beginning to find value in the current market place. Here are the last 5 years of May closings.
Banning/Beaumont...2008/78.....2007/53.....2006/89.....2005/101.....2004/92
Bloomington...............2008/10.....2007/8......2006/27......2005/19.......2004/16
Colton..........................2008/19.....2007/23....2006/36......2005/43.......2004/31
Fontana.......................2008/168...2007/87....2006/213....2005/254.....2004/203
Grand Terrace............2008/9.......2007/7......2006/11.......2005/9.........2004/5
Highland.....................2008/39.....2007/38....2006/91......2005/87.......2004/56
Loma Linda................2008/18......2007/8......2006/20.....2005/20.......2004/22
Mentone.....................2008/3........2007/8......2006/7........2005/11........2004/8
Moreno Valley...........2008/213....2007/79....2006/268....2005/264....2004/237 Redlands....................2008/36......2007/46....2006/75......2005/79.......2004/83
Rialto.........................2008/69......2007/40....2006/102...2005/116.....2004/100
Riverside...................2008/278....2007/193...2006/354...2005/464....2004/364
San Bernardino........2008/146.....2007/90....2006/242...2005/231....2004/212
Yucaipa/Calimesa....2008/47......2007/42....2006/61......2005/76......2004/70

One of the telling bits of information that the IMRMLS now includes information regarding whether a property was Bank owned or a short sale. In 9 of the above cities, approximately 50% of the reported sales were either bank owned or short sales.

Those Purple Flowering Trees

June 3, 2008

I had a friend come to visit Redlands, California from Cleveland Ohio. She was completely in awe of those incredible purple flowering trees. She had never before experienced the beautiful display that the Jacaranda trees create in our springtime; usually in May and early June.

The Jacaranda tree is a native of South and Central America, Mexico and the Caribbean. It is no wonder that these cultures have such a love for and appreciation of color! However, these stunning trees have made their way to

The southwestern U.S., Florida, Australia and South Africa. Pretoria in South Africa is know as the Jacaranda City due to the large number of trees planted as street trees as well as in parks and gardens. In flowering time the city appears blue/purple when viewed from the nearby hills.

They are not a fragrant tree, but their lovely color contributes to the beauty of spring in our Inland area.

Riverside/San Bernardino Counties Statistics

June 2, 2008

Here are the listing and pending statistics as we start the month of June. The ratio of pendings to listings is increasing which is very good news.

Banning/Beaumont - Listings/842......Pending/195

Bloomington............ - Listings/231......Pendings/27

Colton....................... - Listings/353......Pendings/63

Fontana.................... - Listings/1829....Pending/439

Grand Terrace......... - Listings/61.........Pending/11

Highland.................. - Listings/364......Pendings/98

Loma Linda............. - Listings/85.........Pendings/16

Mentone.................. - Listings/56..........Pendings/8

Moreno Valley....... - Listings/1978......Pendings/704

Redlands................. - Listings/419.........Pendings/59

Rialto...................... - Listings/832.........Pendings/190

Riverside................ - Listings/2700.......Pendings/695

San Bernardino..... - Listings/2041........Pendings/347

Yucaipa.Calimesa..- Listings/410...........Pendings/82

As we approach a pending to listing ratio of 30%, things are definitely improving.