I Survived Real Estate 2009 part 2 #142

This week The Norris Group Real Estate Radio Show presents Part 3 of I Survived Real Estate 2009.

This week The Norris Group Real Estate Radio Show and Podcast presents Part 3 of I Survived Real Estate 2009. This segment features John Young from Young Homes and the California Builders Industry Association, Pat Combs from Coldwell Banker and the National Association of Realtors, and Tommy Williams from Williams and Williams and the National Auctioneer Association. The group continues their discussion on legislation and regulation as related to their specific industries.

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I Survived Real Estate 2008 part 4 #86

Part four of “I Survived Real Estate 2008” picks up with Bruce Norris introducing CEO of the California Builders Industry Association of the Southern California, Richard Lambros. There’s a little repeat from last week to get the show going.

Richard discusses real estate as a speculative investment and the cycles. Richard warns us not to think of it as a cycle because that means we can have no influence over the outcome. Total new home production is down and will produce the lowest number of homes in history. In the building industry, they say it’s a building depression. In three years, production has been cut to one third. 2009 is not looking very good. Riverside and San Bernardino account for much of the cuts.

The economic impact of less building is very important. Just in Southern California, the building industry created $48 million of economic activity in 2005. In 2008, reaching $18 billion

Homes today are no longer shelter, they are infrastructure. Energy efficiency in California is already cutting edge and new guidelines are making them even tougher. New homes are unfairly being forced to make up for the 99% of retail homes that aren’t energy efficient. This inequality is difficult for builders to manage at times as costs and regulations add not only costs but time.

At the same time, a new home is a “Prius” and an old home is the “Hummers.” New homes have come a long way in building standards and built-in efficiencies. Buying a home today is very different than buying

New home projects are difficult to get approved. He speaks on residual land value and how builders figure price for a project. Builders work from comparables down to land price and not the other way around. Valuing land right now is too difficult and no one wants to loan on it right now. Builders are focusing on costs control and concerned about anything that adds time or costs to a project.

Real strength will return to building when strength returns to all the other sectors. The state needs jobs and economic growth for builders to thrive.

Bruce Norris then introduces Joel Singer, Executive VP for the California Association of Realtors. Joel discusses the myth versus the reality of the market place. As a former CAR economist Joel has experience after being through other downturns. This downturn is definitely different. It’s unique in that price decline is really steep.

The adjustment process we can’t look at past cycles because the adjustment of each cycle is different. Joel gets asked often “When is bottom.” Joel does not know. Joel is looking at activity picking up and feels we’ve hit bottom.

Joel is aware it feels bad because price is down so much. New builders and the civilian sellers have been squeezed out. The market is full of short sales and foreclosures; all have-to-sell inventory. Roughly 2 out of 3 of all sales are distressed transactions. Joel does agree 2009 will be bad and thinks foreclosures will continue but not sure what will happen beyond 2009.

Unemployment is a problem. A bigger wild card is the notion that Fannie Mae and Freddie Mac are dead. They are insolvent. (At this point in time, Fannie and Freddie were not government controlled). One they are nationalized, Joel expects a further jolt to the marketplace. Fannie and Freddie account for 90% (with FHA) of all loans in the market place.

Affordability has improved and the number of first time buyers will be 50% of the market place. It will be the highest level in three years. Three years ago, any idiot could be a successful investor. In today’s market, good investors will make a difference. The opportunities will be risky, look at the opportunities but don’t assume explosive growth. Assume the property makes economic sense. It will be challenging but the pros will be very successful.

Bruce Norris then announces Tommy Williams, president of the national Auctioneers Association and co-founder of Williams and Williams Auction Company. Conversation to resume next week.


Special thanks to the following partners and sponsors without whom the event would not have been possible:

Platinum Sponsors:
The San Diego Creative Investors Association (SDCIA): sdcia.com
Investors Workshops: investorsworkshops.com
Frye Wiles: fryewiles.com
Proxibid: proxibid.com
White House Catering: whcatering.com
MVT Productions: mvtproductions.tv
Pechanga Resort and Casino: pechanga.com
The Denver Nuggets: nba.com nuggets
The Chicago Bulls: nba.com bulls
The Cleveland Cavaliers: nba.com cavaliers

Gold Sponsors:
7 Steps to a 720 Credit Score and Philip X. Tirone - 7stepsto720.com
Chicago Title - ctic.com
Elite Auctions - sellwithauction.com
Foreclosure Trackers - foreclosuretrackers.com
Investors Resource Center of America LA and Steve and Robyn Love - irca-losangeles.com
Las Brisas Escrow - lasbrisasescrow.com
National Club of Real Estate Investors and Sam Saddat - ncrei.com
Northern California Real Estate Investors Association (Norcalreia) and David Granzella - norcalreia.com
North San Diego Real Estate Investors and Linda Wessels - nsdrei.org
RealtyTrac - realtytrac.com
RE Ventures and Michael Pines - reventuresrealty.com
Real Estate Investors Club of Los Angeles and Phyllis Rockower - realestateclubla.com
Real Wealth Investor and Scott Whaley - realwealthinvestor.com
Saddleback Valley Communities - svc4.com
Silverstar Finance and Janet French - silverstarfinance.com
Sunset Hills Memorial Park and Mortuary - sunsethills.cc
The Mission Inn - missioninn.com
The Mortgage Equity Group - http: themeg.net
The Naked Real Estate Investor Club - Rosie Nieto - nakedrealestateinvestorsclub.com
The Short Sale Processor and Nick Manfredi - theshortsaleprocessor.com
Virtual Real Estate Tour and Layla Tusko - 1wealthcreation.com
Wholesale Capital Corporation - wccmtg.com

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Richard Lambros with the Building Industry Association #80

Bruce Norris is joined this week by CEO of the Builders Industry Association of Southern California and panelist for I Survived Real Estate 2008, Richard Lambros. Richard and Bruce discuss the current market, when the slow down was anticipated, how much worse it’s been than expected, percentage off in building permits in Southern California, how this downturn differs from the past downturns, the speed of deceleration, the leading factors causing the problem, the credit market getting tight really causing problems, light at the end of the tunnel, HR3221 and how it will change and help the market, stabilizing credit markets, helping the foreclosure issue, how HR3221 will help builders directly, FHA and the new loan limits, why it’s so important that limits have changed, median home prices, supply shortage of housing, homeownership levels and how California compares to other states, affordability, misconceptions that builders make huge returns on projects, cities adding fees during a boom, cities focusing on product that produce taxes and creating fees for product that does not, how some cities are actually helping by differing fees in this down market, if a big budget deficit is a concern for the building industry, some cities actually putting together incentive packages to stimulate building but a deficit causing a decline, Prop 13 and concerns, the Builders Industry Association and legislation and how the BIA is involved, how builders are highly regulated, green building and zero net energy homes, the BIA’s stance on green, how California already builds some of the most energy efficient homes in the nation, construction loans in the current market and lenders willingness to lend for building, land prices in the current market, how builders took bad outlooks in a booming market, the statistics builders watch that will suggest a comeback, biasc.org.

Richard Lambros is the Chief Executive Officer of the Building Industry Association of Southern California (BIA/SC), a non-profit trade association representing over 2,200 member companies involved in all aspects of the building industry in the six-county Los Angeles metropolitan area. The 38,000-square-mile region is home to over 16-million residents.

Richard is responsible for the day-to-day management of the sixth largest local homebuilding trade association in the nation and the largest local association in the state. He works with BIA/SC’s Board of Directors, six chapters and twelve councils to craft and implement strategies that will grow the size and strength of the association, provide valuable member services, advance industry causes and create a pro-housing climate that is conducive to sustained housing growth in Southern California. At BIA/SC, Richard has utilized his wealth of political, business and association management experience to help the association reestablish itself as the leading regional voice for the homebuilding industry. His efforts and skills were recognized nationally in 2004 when he won the National Association of Home Builders’ (NAHB) “Executive Officer of the Year Award.”

After nearly winning an election in 1996 to represent California’s 56th Assembly District, Richard served a two-year term as Executive Director for the California Republican Party, where he managed the administrative and political activities for the largest state Republican Party in the nation.

Prior to his political post, Richard spent over 10 years representing the interests and efforts of the housing industry. He served as the Vice President and Director of Public Affairs for the Apartment Association of Orange County (AAOC) and as Director of Governmental Relations for the Rancho Los Cerritos Association of REALTORS©. His years of service and contributions to the housing industry earned him special recognition in 1996 as the Alliance of Real Estate Associations’ “Legislative Advocate of the Year.”

A second-generation California native, Richard was born in Los Angeles and raised in Downey, California. He attended the University of Southern California, where he earned a Bachelor of Arts degree in Political Science. Richard is married and lives with his wife, Colleen, and four children in Fullerton.

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Alan Nevin of CBIA #18

Join Bruce and chief economist for California Builder Industry Association and MarketPointe Realty Advisors, Alan Nevin, as they go back and discuss past downturns and how it's different this time around.

Alan Nevin is the Director of Economic Research of MarketPointe Realty Advisors. MarketPointe is a 30-old real estate research firm that serves private and public sector.
For the past quarter century, Alan has examined the economies of America’s high growth communities and their dynamic economic power. His particular specialty is the economy of the West Coast and the real estate within it.
Alan has been an instructor at UCSD Extension since 1980 and is the school’s senior advisor for its real estate and land use curriculum. He currently teaches “California 2020: Trends in California Demographics”.
In his spare time, he also serves as the Chief Economist for the California Building Industry Association.
He is also a recovering developer and is known to dabble in condominium development and luxury “spec” housing in La Jolla and other reasonably priced communities.
He is a co-founder of the UCSD Economics Roundtable and also recently completed ten-year’s service on the Board of Trustees of La Jolla Country Day School.
He holds bachelor and MBA degrees from American University in Washington, D.C. and a master’s degree in statistical research from Stanford University.

Listen to Alan Nevin Part 2

Alan Nevin of CBIA #17

Join Bruce and chief economist for California Builder Industry Association and MarketPointe Realty Advisors, Alan Nevin, as they discuss the current market and what we should expect long and short term.

Alan Nevin is the Director of Economic Research of MarketPointe Realty Advisors. MarketPointe is a 30-old real estate research firm that serves private and public sector.
For the past quarter century, Alan has examined the economies of America’s high growth communities and their dynamic economic power. His particular specialty is the economy of the West Coast and the real estate within it.
Alan has been an instructor at UCSD Extension since 1980 and is the school’s senior advisor for its real estate and land use curriculum. He currently teaches “California 2020: Trends in California Demographics”.
In his spare time, he also serves as the Chief Economist for the California Building Industry Association.
He is also a recovering developer and is known to dabble in condominium development and luxury “spec” housing in La Jolla and other reasonably priced communities.
He is a co-founder of the UCSD Economics Roundtable and also recently completed ten-year’s service on the Board of Trustees of La Jolla Country Day School.
He holds bachelor and MBA degrees from American University in Washington, D.C. and a master’s degree in statistical research from Stanford University.

Listen to Alan Nevin