by Gene Wunderlich
As we begin this new year with a degree of cautious optimism and/or arrogance about our future, (we can’t stay down indefinitely – we’re Americans, after all), I must start by applauding the leaders of our cities for the exceptional job they have done shepherding us through this morass. The best local government doesn’t always make for primetime television. But the truth is, no other form of government touches your daily life like local agencies. From the minute you leave your home to the minute you return, these agencies shape your life. Your roads, water, schools, parks and public safety depend on the policies and decisions of local government.
Our region was among the hardest hit in the nation yet our cities have come through this relatively intact, without resorting to a variety of new taxes, fees and regulations to hamper a recovery or burden our residents.
In the recent past:
- Our region was frequently atop the state and national foreclosure charts
- The record price appreciation we enjoyed until 2007 plummeted 50% – 60% in 18 months
- Abandoned homes and brown-lawn neighborhoods dotted our cities
- Jobless claims skyrocketed
- We had 24 months of housing inventory but nobody was buying
- Fraud stripped millions of dollars from homeowners and lenders – including local banks
- Commercial properties languished as businesses closed their doors
Did I miss anything? But our cities have used this time to regroup, refocus, renew and especially retain the quality of life that makes our area an attractive destination. That’s important stuff. I’ve mentioned before how 6 of the last 8 national economic recoveries have been driven by a growing housing market. (The other two were assisted by wars.) In this current ‘recovery’, housing has been conspicuously absent leading to questions about the underlying sustainability of the recovery. Until now (maybe).
Sales were generally down in January for our region but that’s not seasonally unusual and no cause for concern. Demand remained strong and pending sales indicate good months ahead. Inventory remains a problem and will likely stay that way until significant numbers of existing home sellers are ready to re-enter the market. An uptick in new home construction will slowly help mitigate the demand curve but that’s only just beginning. Rumors of bank releases of foreclosed properties remains just that – a rumor. And with the Homeowners Bill of Rights recently enacted, many banks and homeowners are waiting to see what that will mean to short sales and foreclosures.
But while sales were down, prices were up, contributing $145,678,963 in sales transactions to the region in January. That’s just for the sale of single family homes – it doesn’t include condo’s, or escrow fees, title fees, home inspection revenue, bringing delinquent taxes current, new owners buying furniture or Realtors springing for a night out at Chili’s when an escrow closes. Over $40 million worth of property changed hands in Murrieta, $37 mil in Temecula, $28 mil in Menifee, $23 mil in Lake Elsinore, $8 mil in Canyon Lake and $7.6 mil in Wildomar. The hemorrhaging has stopped – now it’s time to rebuild from a more stable base and housing is poised to assist.
Of course then I hear about Sacramento trying to reduce vote requirements for future tax increases, statewide attacks on prop 13, federal discussions about limiting or eliminating the mortgage interest deduction and foisting more regulations on individuals and businesses and I realize – the recovery is still very fragile. Our local cities have been excellent partners in spite of these externals factors. Imagine what we could do with that kind of support in Sacramento and Washington DC. Imagine.
Gene Wunderlich is the Government Affairs Director for Southwest Riverside County Association of Realtors.