At the end of this report I have attached a letter of SUPPORT for SB 30 from Sen. Joel Anderson, the co-author of the bill. As I mentioned last month, SB 30 would provide relief to struggling homeowners by shielding them from taxes on forgiven mortgage debt after a “short sale,” and bring California law into conformity with federal tax law. Unfortunately, hostile amendments “linked” SB 30 with Senate Bill 391, a bill that would impose a new $75 tax on specified real estate documents. “Linked” means that if SB 391 fails, SB 30 fails. It is important that SB 30 and SB 391 stay separate and receive up-or-down votes on their individual merits.
It is unfair to use struggling Californians as leverage to pass a new tax increase that presents a new barrier to the American dream of home ownership. Please take a minute to print the letter, sign it and fax or email it to the Senator. Last month in DC it was my privilege to listen to our mid-year forecast from NAR Chief Economist, Dr. Lawrence Yun. This year Dr. Yun was joined by LaVaughn Henry, vice president and senior regional officer at the Cincinnati branch of the Federal Reserve Bank of Cleveland. Lawrence Yun said a multiyear housing recovery is likely. “Steady job creation and household formation have been helping to unleash a pent-up demand in the housing market,” he said. “Lagging housing starts and a continuing housing shortage mean home prices are primed to rise further, by 13 percent cumulatively in 2013 and 2014, which will add more than $2 trillion to household wealth over this period.” Existing-home sales continue to improve, although Yun said inventory constraints are preventing stronger growth.
After four years of relatively flat activity from 2008 through 2011, existing home sales across the country rose 9.4 percent to almost 4.3 million in 2012 and are forecast to increase to nearly 5.0 million this year; he projects 5.3 million sales for 2014 and 5.7 million in 2015. Realtors from around the country are reporting shortage of inventory even in previously stagnant markets. Some markets like Las Vegas and Phoenix have become even more super-heated than our own, but even areas of the mid-west and Eastern seaboard that couldn’t give homes away last year are feeling the comeback. It appears sustainable but more on that in The Last Word. If you only care about the local market, there’s good news here as well.
After breaching the $300,000 ceiling last March, Temecula’s prices have marched inexorably upward and in May cracked through the $400,000 level for the first time since February 2008. Murrieta’s median of $359,998 is their highest since March 2008. These prices helped drive the region to its first monthly median over $300,000 since April 2008, before it dropped to $210,317 in April 2009. Murrieta lead the year-over-year median price increase posting a 23% bump ($276,095/$355,998). Temecula prices increased 18% ($339,228/$415,852), the regional median was up 17% ($255,199/$307,440), Wildomar and Lake Elsinore increased 22% and Menifee was up 20%. Canyon Lake was down 1%. The region is up 32% over our 4/09 trough, Murrieta is up 30% and Temecula is up 36%. At just 28% off its peak price, Temecula has made back more than half of the value lost during 2007-2008. Murrieta is close but still lags by 38% and the region is improving but still 39% off the peak.
Gene Wunderlich is the Government Affairs Director for Southwest Riverside County Association of Realtors. If you have questions on the market please contact me at GAD@srcar.org or to keep up with the latest legislative and real estate trends go to http://gadblog.srcar.org/