Local elections are over. Congratulations to the new City Council Members in the region. As always, a lot of good folks (and a few others), stepped up and volunteered to help guide their city. We look forward to working with you to implement sound housing policies and answer any questions you might have on real estate issues.
As anticipated, sales were down in October dropping 10% for the region (see TRID delays below). Meanwhile, median prices continues their upward creep – up 3% month-over-month staying 10% ahead of last October. Temecula sales alone fell 23% from September to October, but after fading slightly in September, prices rose another 7% in October. This brings the median price of a home in Temecula to $482,326. That’s just 7% off their highest peak since their December 2007 spike to $521,013. Our region is still about 30% off peak price so it will take another couple years of gains to get that back, if all goes well.
If all goes well. That’s the key, isn’t it? There are experts on both sides of that question and, as usual, I agree with the experts. Consumer Confidence dropped 5% in September. After hitting a respectable 3.9% in Q2, Gross Domestic Product (GDP) dropped back to an anemic 1.5 in Q3 – about average for the past few years. While the WSJ wrote that builder optimism has hit a 10 year high in October, US News reported the following day that optimism about the U.S. economy dims. Several world economies are on the brink like China and Brazil. Europe is dealing with immigrant and fiscal crisis. Even with Russian in pursuit, ISIL appears to be hanging on. Did I mention healthcare and the recent spate of good news on Obamacare? Yeah, that too. Oh, and there’s an election going on. Aside from the 20 +/- people running for President, most other folks aren’t feeling too optimistic about that either
In housing news, after the latest step-back by the FED on an interest rate hike in September, now the saber rattling is on for December. Merry Christmas! Last month I mentioned that TRID was upon us. The Consumer Finance Protection Bureau, those paragons of perspicacity, implemented their new lending disclosures and regulations on October 3rd. By combining two processes – the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), they magically came up with the TILA-RESPA Integrated Disclosure, or TRID. That’s why they make the big bucks, folks. The main impact these new regulations appear to have is to delay closing a real estate transaction for a couple weeks. No more 30 day escrow. Surprisingly (to those not paying attention), our median time on market increased by 12 days in October. But everyone felt much, much safer.
After being stymied by the courts in their attempt to over-regulate the waters of the U.S., the EPA is now reaching out again with a proposal to over-regulate the air we breath. And the federal government is currently weighing a measure to extend a tax on homeowners to pay for transportation infrastructure.
Last week I had the oportunty to visit with our National Association of Realtors® Chief Economist at our year-end meetings. We also talked with our D.C. Chief Lobbyist who keeps property rights issues alive on Capitol Hill, as well as a host of other professional political pundits, advocates, troublemakers and dogsbodies.
So next issue I should have a much better handle on what’s going on and what all this means to our housing market. I should…