2012 - The Year the Real Estate Market Began Its Recovery

December 31, 2012

Sometime in the third quarter of 2012, the real estate market in our Inland Southern California area became a changing market place. No longer could buyers offer below list price. No longer could buyers assume that a property that they liked would still be available next week or even tomorrow. No longer could buyers find a property that met their needs and desires and put in an offer and THEN speak to a lender. No. Sellers wanted to see a pre approval letter complete with FICO scores before they would consider an offer.
Agents had to now be on their toes and checking for new listings everyday if not several times a day. And this frenzy has not stopped. Here it is New Years Eve Day and we are out showing property and writing offers. Our buyers aren't taking a day off.
Normally, I have always felt that the day after New Years was really busy. Prospective buyers calling and walking into a real estate office ready to begin their search for a new home. Let's hope that sellers will also be ready to list and move.
Will take New Years Day to get ready for a truly exciting 2013 in the real estate market.

Today is a Beautiful Southern California Day

December 28, 2012
What a crisp and sparkling day! Our Southern California mountains are clear with patches of snow on the tops. For winter sports fans, this might be the day for a trip to all our great ski resorts. Of course, if you aren't in the mood to brave the traffic on the mountain roads, you can just enjoy the scenery from our valley.
If you haven't yet visited downtown Riverside, you might consider an outing to ,see the million plus lights at the Mission Inn.
Perhaps, with rain predicted for Saturday and Sunday, you might want to visit a movie theater and see the end of the year new films. There certainly has been a big hype for films being released the past few weeks so that they can be Oscar contenders.
Of course, you can spend the weekend writing your thank you notes and dismantling your holiday decorations. After all the hurry-scurry of the season, maybe a quiet time at home is just the perfect preparation for 2013.

Let's Take a Deep Breath

December 27, 2012
2012 in many ways has been a crazy year in real estate. From the beginning, we kept hearing about the "shadow inventory" and how it would swamp the market and cause prices to decline. It didn't happen and now the news media are even admitting that they over estimated the number of homes that would suffer foreclosure. As it turned out, our inventory of listings has shrunk to all time lows. In the last quarter of 2012, right up to today, buyers seem to be almost frantic to purchase a property. Multiple offers are routine engendering accepted offers considerably above list prices. This, of course, leads to appraisals that are less that the purchase price. Buyers now need to make up the difference or cancel the purchase which has led to more desire on the part of the buyers.
Traditionally, December is a slow month. Escrow staff, loan agents, title officers, underwriters, etc. have taken a holiday, but buyers and real estate agents are still busily showing property and writing offers. With the buyers hooked to searching the Internet for any new listings, phone calls, e mails and text messages are keeping agents active throughout this holiday season. We would like everyone to take a deep breath. Sellers seem to be taking a breather and waiting to list in 2013. However, buyers have not let up their searches. We know that with properties in such short supply and the level of desire so high, we need to be available and responsive. Crazy that in one year's time, homeownership has once again become a goal.

Wrapping It Up

December 26, 2012
Just when you thought that "wrapping" was finished, I suggest that it is time to "wrap" some more. Yes your holiday gifts were wrapped and by now the wrappings have all gone into the re-cycle bin. However, the gift giving season is always followed by the final week of the current year. You now have six days to wrap up your final year end donations, bill paying and any other tasks you wanted to complete this year.
I am told that financial advisers have been busy for the past weeks, trying to help clients figure out what they need to do to prepare for 2013's changes in a variety of governmental programs. Since none of us know what those changes will really be it is hard to prepare. However, if you have a mortgage, make your January payment now. Mortgage deductions are still allowable in 2012 and who knows about 2013.
If you couldn't quite decide whether the time was right to purchase a home in 2012, take a good look at your housing needs, your finances and contact a lender to get pre approved so that you will be able to take advantage of the low home prices before the market rises.(Supply and demand and low interest rates could easily push prices.)
 If you work at loan companies, title companies or escrow companies, you will be working overtime for the next three business days in order to wrap up their clients home purchases. This year, almost more than many prior years, those of us in the real estate business will definitely be busy wrapping up transactions.
For many, 2012 will be a good year to just "wrap up".

Twas the Day Before Christmas...

December 24, 2012
Last minute shoppers are dashing to the stores. We have a gift suggestion list from Author Oren Arnold. Oren Arnold was born in 1900 in Minden, Texas. He graduated from Rive University where he editied the college newspaper. He was a free lance journalist and published several novels. Many of his Christmas quotes remain pertinent for today. His Christmas gift suggestions seem appropriate for our turbulent times - and you don't even have to go to a mall or a store to find them. They are completely within your person to give.
"To your enemies, forgiveness
To your opponent, tolerance
To a customer, service
To all, charity. To every child, a gppd example
To yourself, respect"
From all of us at Century 21 Lois Lauer Realty, peace and good will this holiday season.

If Your Holiday Shopping is Finished.....

December 21, 2012
If you are organized and ready for the Holiday Week, this might be a great weekend to visit Downtown Riverside. The Mission Inn is stunning with is million plus lights. The skating rink is a lot of fun and a healthy way to prepare for all the holiday good foods. You can take a carriage ride around the area. You can listen to the Carolers. The opportunities for getting "In the Mood" are priceless.
If you don't fee inclined to join the crowd, you can hop in your car and tour the residential neighborhoods in  any of our Inland Cities and see the amazing displays of holiday lights. Each year, it seems, more and more folks share their holiday spirit with the community by lighting up their properties.
If you aren't wanting to leave home, invite your neighbors in. Since we all get so busy and perhaps rarely take to time to visit with our neighbors, this count down to Christmas Day might be a perfect opportunity for a spontaneous gathering.
Of course, if your shopping isn't finished, you'll probably be out experiencing the decorations and entertainment at the Malls. If that is necessary, at least take a moment to enjoy the holiday ambiance.

A Headline in The Sun Newspaper

December 20, 2012
A few weeks ago in the "Around the House" section of The Sun Newspaper, a headline caught my attention. It was the title of a column by Matt LeVesque who write op ed pieces for The Sun. The head lin read "What are your must-haves for the perfect home?"
It is not unusual for real estate agents to ask prospective buyers to describe their dream house. Would the list of must-haves for a perfect home be the same as the description of a person's dream house? Somehow I have felt that my dream house had more than just the must haves, but also included the qualities that it would be nice to have.
Matt Le Vesque suggested that his readers send him their lists as a "Construction Zone Holiday Contest". He is a builder and perhaps can incorporate some of his reader's ideas in  his home designs. As a realtor, I am more curious about what buyers feel is important in a home.
Any one reading this can click the comment button and let me know what your dream house would have or what realistically you must have in a home you would want to purchase.

"Time is of the Essence"

December 19, 2012
A phrase that is on the California Association of Realtors' Purchase Agreement and in many of their other contracts is "Time is of the Essence". In the context of contract law, this phrase means that any and all time frames in a purchase agreement are important. If the agreement calls for the buyer to submit proof of funds for the down payment and closing costs within seven days from date of acceptance, this is a deadline. Failure to meet the deadline may be considered a breach of the contract. In any of the C.A.R. Purchase Agreements there are time frames for performance by both the buyer and the seller.
In the day to day world of real estate transactions, it does occur that either the buyer or the seller may not perform within the specified time.When this happens,  the other side of the transaction has the right to seek performance. C.A.R. has developed a form that can be used. This form is called "Notice to perform". It allows for the non performing party to have two days to perform. If no performance the contract may be cancelled.
Sometimes the failure to meet the deadline is not the fault of the buyer if, for instance, the lender fails to get the appraiser out in a timely manner.While this could be the reason for the missed deadline, it does not change the contractual agreement to meet a certain date. Sometimes a seller in a homeowners' asociation cannot deliver the homeowner documents within the specified time frames. Again, it may not be the sellers fault, but the buyer could send a "Notice to Perform" with the two day time for the seller to perform.
During the past several years when the real estate market was slow, agents and principals became a little lax at enforcing the time frames. With multiple buyers, sellers and their agents may become more diligent in keeping the transaction on the timely track.
"Time is of the Essence" is not to be taken lightly.

When A Real Estate Market Turns a Corner

December 17, 2012
Real estate markets have their own characters; usual descriptions include "Buyers' Market", "Sellers' Market, "Normal Market" or what you might hear real estate agents saying this month "Crazy Market".
It might be possible to call this "crazy market" a sellers' market because of the number of multiple bids sellers are receiving on their properties. However, even when a seller is able to receive an offer substantially above the listed price, it is possible that an appraiser may take the value down a notch.
It does seem that the real estate market in our region has reached a turning point. Fourth quarter of 2012 has seen a very brisk market. Often, as soon as a property is listed in the MLS, the buyers and agents are scrambling to view it and to write offers. Part of the reason for the low active inventory is the rapid turnover of new listings from "active" to "pending". This has made agents and buyers crazy to check new listings almost hourly. In a season that is normally slow for real estate sales, we are seeing an increase in potential buyers eager to see every new listing in their price range.
Having experienced turning markets before, I understand some of the frenetic activity. What has changed in this turning market is the use of the Internet by buyers to discover new listings even before their agents have become aware. Trying to absorb the amount of information available via the Internet about real estate is a formidable task, but one that is increasingly necessary.
The "Zillow zestimate", the price per square foot, the information on Trulia and Red Fin and Move and Realtor and other web sites is often explored before potential buyers call a real estate agent. The age of real estate agents being the only ones knowing about properties is one of the major changes that is effecting this real estate market as it changes from a down market to some other kind of market yet to be determined.

The Really Special "Marry-Achi" Christmas

December 14, 2012
Sinfonia Mexicana will be performing Saturday evening, December 15 at 7:30 p.m. at the California Theatre of the Performing Arts in Downtown San Bernardino. If you really want a joyous and upbeat occasion, this concert will be a real treat. Jose Hernandez and his Sol de Mexico will be the featured performer. his platinum selling marichi Sol de Mexicoi became the first mariachi ensemble to be nominated twice for a Grammy award.
Also on the program will be the Grandeza Mexican Folk Ballet Company.
Tickets are $21, $36, $46 and $61 .
Information can be obtained by calling 909-884-3228 or on the web, www.sinfoniamexicana.com

The Best and Strongest Offers

December 13, 2012
If you are wanting to buy a house, you had better be prepared to make your offer the best offer your financial situation will allow. We are in an environment of multiple offers and of agent/seller demands for proof of your ability to complete the transaction. This is not a real estate market where the buyers are in charge.
If you are looking at properties and wanting to actually buy a property, there are some important documents you must have when you submit your offer. No longer does an offer with a 20% down payment put you ahead of an offer with a 3.5% down payment. While your 20% down might give you an edge, these other supporting documents are absolutely necessary.
1) A Pre Approval letter from a lender. Perhaps even a Pre Aprroval from a lender specified by the agent/seller. (The agent/seller cannot make you use this specified lender but it does seem that having their lender interview and check you out can be a condition of acceptance.)
2) Your Pre Approval letter must contain your FICO scores.
3) Proof of funds. This can be a bank statement showing that you have the needed funds for your down payment and your costs of sale. It could be a statement from your stock broker showing sufficient assets to make the down payment and costs. (This may be questioned if you are planning to sell some assets to obtain the cash necessary.)
Without the above documentation, your offer may be refused. Since it may take a bit of time to locate the property you wish to buy, keep track of the dates on these documents. Once they are 30 days or more old, they need to be updated.
With the small number of properties being offered for sale, the competition is fierce. Be prepared and submit your very best offer. ( You may even have to consider whether you would be willing to make up the difference between the appraisal and the selling price. Appraisers may not yet see the upward push in values.)
Believe me. This is a tough market for buyers.

The Over $400,000 Market

December 12, 2012
In the fourteen communities that I track, the number of properties that have sold with a $400,000 or more price continues to be a relatively small portion of overall sales numbers. It seems that their is more activity, but as yet the numbers for closed transactions continue to be low. Here are the numbers for the first eleven months of 2012.
Banning/Beaumont.............11/1.......10/2.......09/1.......08/0.......07/0.......06/0.......05/0.......04/0
.........................................03/1.......02/0.......01/1
Bloomington......................11/0.......10/0.......09/0.......08/0.......07/0.......06/0.......05/0.......04/0
.........................................03/0.......02/0.......01/0
Colton..............................11/0.......10/0.......09/0.......08/0.......07/0.......06/1.......05/0.......04/0
........................................03/0.......02/0.......01/0
Fontana............................11/3.......10/3.......09/4.......08/1.......07/0.......06/1.......05/0.......04/0
........................................03/1.......02/3.......01/1
Grand Terrace..................11/0.......10/0.......09/0.......08/0.......07/0.......06/0.......05/0.......04/0
........................................03/0.......02/0.......01/0
Highland...........................11/3.......10/2.......09/0.......08/3.......07/1.......06/4.......05/3.......04/2
........................................03/0.......02/1.......01/1
Loma Linda......................11/1.......10/0.......09/0.......08/2.......07/2.......06/0.......05/1.......04/1
.........................................03/0.......02/0.......01/1
Mentone...........................11/0.......10/0.......09/0.......08/0.......07/0.......06/0.......05/0.......04/0
.........................................03/0.......02/0.......01/0
Moreno Valley..................11/0.......10/0.......09/0.......08/1.......07/0.......06/0.......05/0.......04/0
.........................................03/0.......02/0.......01/0
Redlands...........................11/10.....10/12.....09/7......08/12......07/13.....06/11.....05/9......04/6
.........................................03/8.......02/10.....01/5
Rialto................................11/0.......10/0.......09/0.......08/0.......07/0.......06/0.......05/0.......04/0
.........................................03/0.......02/0.......01/0
Riverside...........................11/21.....10/25.....09/19.....08/20.....07/22.....06/24.....05/23.....04/20
.........................................03/20.....02/18.....01/18
San Bernardino.................11/1.......10/0.......09/0.......08/1.......07/1.......06/1.......05/0.......04/0
.........................................03/0.......02/0.......01/1
Yucaipa/Calimesa..............11/1.......10/1.......09/3.......08/4.......07/7.......06/4.......05/3.......04/4
.........................................03/2.......02/5.......01/5
To a certain extent, these numbers are about the same as the over $400,000 market in these communities in 2003 and very much less than in 2005. We made a huge leap in value from 2003 to 2005. Will history repeat itself?

Median Prices - November 2012, 2011 and 2005

December 11, 2012
It is always somewhat enlightening to check median prices even though the method I use is definitely not academic or even scientific. I simply take the total number of properties reported as sold though our CRMLS, divide by 2 and post the selling price of the property that falls at this halfway point. What it says is that half of the properties reported as sold, closed above or below this price. Since I have used this process consistently, it show be a reasonable indication of market values. I am posting the November 2012 numbers as well as November 2011. I am also posting the November 2005 numbers which show where we were. When you compare these numbers, you can see why so many folks are struggling with the reduced value of their homes. The good news is that median prices have risen over last year's values.
Banning/Beaumont................2012/170,000......2011/155,000........2005/327,500
Bloomington.........................2012/140,000......2011/140,000........2005/355,000
Colton..................................2012/205/255......2011/131,000........2005/310,000
Fontana................................2012/235,000......2011/199,000........2005/395,000
Grand Terrace......................2012/202,000......2011/177,000........2005/355,000
Highland...............................2012/200,000......2011/167,000........2005/377,000
Loma Linda..........................2012/202,000......2011/174/192........2005/360/410
Mentone..............................2012/79/159.........2011/170,000........2005/275,000
Moreno Valley.....................2012/170,000......2011/150,000.........2005/370,000
Redlands.............................2012/235,000.......2011/189,000.........2005/422,000
Rialto..................................2012/180,000.......2011/160,000.........2005/365,000
Riverside.............................2012/225,000......2011/190,000.........2005/407,000
San Bernardino...................2012/121,000......2011/107,000.........2005/305,000
Yucaipa/Calimesa...............2012/205,000......2011/189,900......... 2005/379,000
There you have it. What year do you think prices might be back to the 2005 numbers?

Sold properties November 2012 and 2011

December 10, 2012
As is our custom, we report the number of units sold each month as reported though the CRMLS. Here are the numbers for November 2012 and 2011. Just for comparison I am posting the numbers for November 2005. This is the year when our real estate markets probably hit their peak.
Banning/Beaumont...............2012/129.......2011/110.......2005/102
Blooomington......................2012/19.........2011/23.........2005/33
Colton.................................2012/29.........2011/45.........2005/54
Fontana...............................2012/197.......2011/232.......2005/235
Grand Terrace.....................2012/14.........2011/5...........2005/14
Highland..............................2012/49.........2011/63.........2005/81
Loma Linda.........................2012/13.........2011/11.........2005/7
Mentone..............................2012/7...........2011/14.........2005/10
Moreno Valley....................2012/199........2011/220.......2005/347
Redlands.............................2012/59..........2011/49.........2005/60
Rialto..................................2012/69..........2011/83.........2005/97
Riverside.............................2012/319........2011/343.......2005/466
San Bernardino...................2012/159........2011/179........2005/236
Yucaipa/Calimesa...............2012/57..........2011/59..........2005/61
The greatest differences in the numbers were in the four cities that have the greater numbers for the population; Fontana, Moreno Valley, Riverside and San Bernardino.

The Dance of the Sugar Plum Fairy

December 7, 2012
The traditional Holiday presentations of The Nutcracker Ballet is taking place around the Inland Empire. The Inland Dance Theatre will be on stage at the California Theatre of the Arts at 8 p.m. tonight and Saturday and at 2:15 p.m. on Sunday. The California Theatre is at 562 W. Fourth Street in San Bernardino. Tickets are $20,25 and $30. Information at 909-891-1563.
The Inland Pacific Ballet will be presenting The Nutcracker at 1 and 7 p.m. On Saturday, December 8 and at 1 p.m. on Sunday December 9. They will be on stage at the Lewis Family Playhouse, 12505 Cultural Center Drive, Rancho Cucamonga. (Victoria Gardens). Tickets are $42 fro general admission, $40 for seniors, $21 for youth and $50 for preferred seating. On following weekends the presentation will be at the Bridges Auditorium, Pomona College, 450 N. College Way, Claremont.
Information at 909-482-1590
Another type of holiday treat is the annual Big Bear Chocolate Holiday Tour on Saturday, December 8 from 1 to 4 p.m. This is a tour of the bed and Breakfast Inns located in the Big Bear area. Each of the seven locations will be giving out chocolate treats. The weather tomorrow is predicted to be quite perfect for a tour of Big Bear. Go to www.bigbearbnb.com and down load the flyer  with detailed information. Also, if you bring the flyer with you, I understand that there is free admission.

Short Days and Bright Lights

December 5, 2012
We were commenting the other day about how soon it gets dark these days. When you have clients who wish to view properties after work, sometimes the darkness is a challenge. However, as I was driving home about 5:30 p.m. yesterday, I found that I could enjoy the displays of holiday lights that folks are installing on their properties. Certainly these installations must give a prospective buyer a feeling that the neighborhood is warm and friendly.
I can remember that as a child my parents would load the family in the car and we would do a special tour of "Holiday Lights" in the various neighborhoods of our town. It was a big treat especially with the car radio playing Christmas Carols. These decorations add a lot of cheer and good will to the season that otherwise might be dark and gloomy

How Many of Those Active Listings are "Standard" Sales?

December 4, 2012
I have not been checking regularly on the number of the properties listed are "standard" sales. A property that is listed as a "standard" sale is one that (1) does not have a Notice of Default recorded against it; (2) is not bank owned (REO). I ran the numbers for the properties that are active listings. The percentage of properties that show as "standard" does seem to run to about one half to two-thirds of the listings. Here are the numbers.
Banning/Beaumont..........Active/189........Standard/138
Bloomington...................Active/16..........Standard/14
Colton...........................Active/36...........Standard/22
Fontana.........................Active/169.........Standard/106
Grand Terrace...............Active/12...........Standard/9
Highland........................Active/60...........Standard/39
Loma Linda...................Active/24...........Standard/16
Mentone.......................Active/8..............Standard/4
Moreno Valley.............Active/143..........Standard/71
Redlands......................Active/141..........Standard/114
Rialto...........................Active/70............Standard/35
San Bernardino............Active/270..........Standard/159
Yucaipa/ Calimesa.......Active/100..........Standard/70
There you have it. I will see how these numbers change over time.

Listings, Pendings, Back-ups and Ratios -Decmember 1, 2012

December 3, 2012
As we begin the final month in the year 2012, it is interesting to note the change in the numbers as compared with December 1, 2011. The actual pending and back-up numbers are amazingly similar. However the number of active listings then and now has changed dramatically.For your information, I shall put 2012 numbers followed by/2011.
Banning/Beaumont............List/189/456......Pend/242/194......Back-up/94/100......Ratio/1.778/.645
Bloomington.....................List/16/58..........Pend/54/47..........Back-up/19/21........Ratio/4.562/1.172
Colton..............................List/36/96.........Pend/78/86...........Back-up/35/36........Ratio/3.139/1.271
Fontana............................List/169/569.....Pend/532/488.......Back-up/198/214....Ratio/4.320/1.234
Grand Terrace..................List/12/38.........Pend/26/17...........Back-up/11/7..........Ratio/3.083/.632
Highland...........................List/60/137.......Pend/120/115.......Back-up/39/55........Ratio/2.650/1.241
Loma Linda......................List/24/37.........Pend/33/34...........Back-up/15/12........Ratio/2.000/1.243
Mentone..........................List/8/34............Pend/13/19...........Back-up/2/9............Ratio/1.875/.834
Moreno Valley.................List/143/686......Pend/439/468.......Back-up/173/206....Ratio/4.280/.983
Redlands..........................List/141/254......Pend/119/96.........Back-up/56/43........Ratio/1.241/.547
Rialto...............................List/70/290........Pend/208/206.......Back-up/70/66........Ratio/3.971/.938
Riverside.........................List/401/1173.....Pend/760/739.......Back-up/309/380....Ratio/2.666/.954
San Bernardino...............List/279/643.......Pend/402/413.......Back-up/126/125.....Ratio/1.956/.837
Yucaipa/Calimesa...........List/100/226........Pend/123/103......Back-up/68/63.........Ratio/1.910/.735
There you have it. With the properties being sold almost the day they are listed, we are experiencing a competitive and challenging market. Properties that have been listied for several months are now receiving attention as potential buyers scramble to purchase. It does seem clear that the residential real estate market has undergone a change.