Real Estate Economist Gary Watts #57

Bruce Norris and economist Gary Watts of Impact Real Estate continue their conversation from last week. This week they discuss when this current real estate downturn began, what statistic told us we were headed into a downturn, if Southern California is different from the rest of California, what percentage of the market was second home purchases, what has changed in the lending industry, the Federal Reserve and why they waited so long to do anything about the lending troubles, the new rules of being a lender, how certain minority groups stand to be hit hardest and how it happened, Bruce and Gary’s differing opinion on affordability, resets in 2008, lenders stalling on resets, if banks can truly be proactive and what choices they have in dealing with delinquent borrowers, due-on-sale clause, the media misleading the public on foreclosure rates, how the media’s lack of experience and understanding of the topics lead to bad reporting, press and its impact on real estate in an up market, consumers and attention paid to news articles, Orange County foreclosures, what cities are most affected, did builders overbuild in Orange County, how builders make mistakes, state-wide foreclosures and the never-before-seen sales ratio for Southern California, forecasting in 2008, why California wins migration, and how some areas in California are almost ready to cash flow.

Gary Watts has long been recognized as a forecasting expert by the real estate industry. His long-term analysis has also drawn the attention of the media due to his consistent accuracy. His Economic Outlook has been spotlighted in regional newspapers, including the Orange County Register and the Los Angeles Times. He has been seen on the PBS TV program Real Orange, he has been heard on the radio at KNX Money Talk and was featured in Fortune magazine. He holds a degree in economics with advanced studies in psychology from California State University at Sacramento. Gary's economic forecast and lecture notes are among the information pieces most widely circulated by real estate agents in Orange County. Gary's last speaking season drew over 17,000 real estate agents. His talks are also available in DVD and an English or Spanish CD format

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Real Estate Economist Gary Watts #56

Bruce Norris is joined this week by economist Gary Watts. Bruce and Gary discuss Gary’s long history of forecasting in California, what surprised him in 2007, how the financing industry put the breaks on the low and high end inventory in California, psychology playing a role in the California real estate market, how this cycle was different from previous cycles, renting versus buying in the mind of a buyer, how much of the loan pool is subprime, how much of the subprime is really a problem, collateralized debt and the mess it has created, FHA and VA loans, how the new loan limits for FHA will hopefully help, how the change might hurt the median price, pent-up demand in certain parts of California, who make up these new buyers, the FED and the solutions they’ve tried to implement, how freezing the subprime might help or hurt the market, foreign markets and lending practices, which foreign country buys the most real estate in the United States, foreigners betting on a short-term weak dollar and a good potential for a rebound, and how the election could effect real estate.

Gary Watts has long been recognized as a forecasting expert by the real estate industry. His long-term analysis has also drawn the attention of the media due to his consistent accuracy. His Economic Outlook has been spotlighted in regional newspapers, including the Orange County Register and the Los Angeles Times. He has been seen on the PBS TV program Real Orange, he has been heard on the radio at KNX Money Talk and was featured in Fortune magazine. He holds a degree in economics with advanced studies in psychology from California State University at Sacramento. Gary's economic forecast and lecture notes are among the information pieces most widely circulated by real estate agents in Orange County. Gary's last speaking season drew over 17,000 real estate agents. His talks are also available in DVD and an English or Spanish CD format

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John Burns of John Burns Real Estate Consulting #55

Bruce Norris is joined this week by builder consultant and founder of John Burns Real Estate Consulting, John Burns. Bruce and John discuss how busy John has been consulting investors and builders who have never experienced a downturn, what industries these new investors are coming from and if it’s cyclical, if builders had a chance to do it over what they might choose to do differently, land shortages, debt strategies of builders, options versus cash, land value decrease in California, portfolio deals, supply of homes the builders are currently holding, construction starts, how lending has changed the game, who the typical buyer is in 2008, the possibility of builders constructing smaller homes, if the cities like that idea, why do builders repeat the same mistakes, are those in trouble the old or new companies, Northern versus Southern California market, affordability changes in the coming years, if affordability will help the housing market, if any of the FED actions will come to the rescue, how the freezing of foreclosure won’t change anything, how interest rates might help, the California employment picture for 2008 and its effect on housing demand, recession in California, migration, presidential elections and possible tax law changes, the state of the commercial industry, commercial foreclosures in 2008, and the new loan limits proposed by the FED.

Prior to founding the Company, John Burns was at KPMG Peat Marwick for 10 years, where he was a Senior Manager in the Real Estate Consulting group. He was also a Principal and Vice President for four years at a national consulting firm, where he completed custom consulting assignments and developed several market monitoring subscription products for the 75 largest housing markets in the United States.

John Burns is a frequent speaker, and has been quoted as an expert by CNN, ABC World News Tonight, The Wall Street Journal, The Associated Press, USA Today, Bloomberg, The Los Angeles Times, The Washington Post, Builder magazine, and others. He designed and authored a weekly e-mail received by more than 25,000 industry participants, and authored the U.S. Housing Markets publication. He also created and edited several highly successful market research subscription reports.

John has a M.B.A. from the University of California, Los Angeles and a B.A. in economics from Stanford University. He is also a Certified Public Accountant. He is a full member of the Urban Land Institute and a board member of the Building Industry Association.

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Mark Kiesel of PIMCO #54

This week Bruce Norris is joined by Executive Vice President of PIMCO, Mark Kiesel. PIMCO is one of the largest specialty fixed income managers in the world, with $746.3 billion in assets under management and more than 900 employees in offices globally. Bruce and Mark talk about the strategies of PIMCO going forward into 2008, how PIMCO is more defensive on certain products in 2008, bonds compared to stocks, why bonds instead of stocks, muni bonds, what happens when cities go bankrupt, corporate bonds markets in 2007 and its growth, how bonds fair in recessions, PIMCO’s position on mortgages and housing, PIMCO’s position on housing price drops, AAA ratings and subprime, credit cycles compared to the economy, emerging market stocks, good areas for investment, what happens when ratings are lowered from AAA, how lenders will have to adjust, three major obstacles that could end our positive business cycle, the root of real estate price declines, housing inventory nation wide, rate resets in 2008-2009, increases in real estate vacancy, the shell-shocked consumer, corporate profits in 2008, hiring and unemployment, how it won’t be as bad as 2000-2001, and whether consumers have real wealth or just more stuff.

Mr. Kiesel is an Executive Vice President, generalist portfolio manager, and a senior member of PIMCO's investment strategy and portfolio management group. He also heads the investment-grade corporate desk and manages corporate portfolios for the firm. Previously, Mr. Kiesel served as PIMCO's head of equity derivatives and as a senior credit analyst. Mr. Kiesel joined PIMCO in 1996, previously having been associated with the sales and trading divisions of Merrill Lynch and JP Morgan. He has twelve years of investment experience and holds a bachelor's degree in economics from the University of Michigan and an MBA in finance, economics and international business from the University of Chicago Graduate School of Business.

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Leslie Appleton-Young of CAR #53

This week Bruce Norris is joined once again by Chief Economist for The California Association of Realtors, Leslie Appleton-Young. Bruce and Leslie discuss how lenders are exiting existing properties differently this cycle, feedback from frustrated REO agents, a due on sale moratorium, why adjustments in the lending industry has to change, short sales and how lenders aren’t cooperating, how lender cooperation might change in 2008, Realtors and auctions in 2008, the California budget deficit and its effect on real estate, possible changes with Proposition 13, if California is losing migration, the California rental market, contraction in employment in the real estate industry, how buyers are cautious, the demanding buyer, home ownership as an investment, the willingness for buyers to jump in 2008, how 25%-50% of markets were investors in some markets in recent history, 2007 versus 2008 and how transactions will bottom, C.A.R. predicting further declines in transactions, mortgage resets in 2008, how 2009 will be a better year, and possible solutions and their unintended consequences.

Leslie Appleton-Young is Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.), a statewide trade organization with over 195,000 members dedicated to the advancement of professionalism in real estate.

Mrs. Appleton-Young directs the activities of the Association's Member Information Group. She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities. She is also closely involved in the Association's strategic planning efforts and is a well-known speaker in California’s real estate community.

Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island. She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania.

Mrs. Appleton-Young earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania.

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Leslie Appleton-Young of CAR #52

This week Bruce Norris is joined by Chief Economist for The California Association of Realtors, Leslie Appleton-Young. Bruce and Leslie discuss how people join C.A.R, how the market has changed and things unexpected in the market, jumbo market problems, how Realtors audiences have changed as far as what they are looking for from C.A.R., how Realtors are seeking strategies and how to deal with unrealistic sellers, total membership during the boom, the wait-and-see attitude on membership numbers but how so far they are stronger than expected, what successful agents did to make 2007 work, how to profit in 2008, California short sales and California REOs, how the California commercial real estate market is fairing, how finding a niche is important, the First Time Buyer Fair and a partnership with the Los Angeles Times, who becomes the dominate buyers in a down market, how median home prices only recently went down, the Case Schiller index, how to truly figure out market value, why it’s important not to follow the market down and price correctly off the bat, California REO sales vs. expected California retail sales in 2008, reason why lenders haven’t adjusted HELOCs, variability by market and how the Inland Empire has more inventory, and why C.A.R. will stick with their newer First-Time Buyer Affordability Index.

Leslie Appleton-Young is Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.), a statewide trade organization with over 195,000 members dedicated to the advancement of professionalism in real estate.

Mrs. Appleton-Young directs the activities of the Association's Member Information Group. She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities. She is also closely involved in the Association's strategic planning efforts and is a well-known speaker in California’s real estate community.

Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island. She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania.

Mrs. Appleton-Young earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania.

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Mark Dotzour of Texas A & M #51

Bruce Norris is joined once again by Chief Economist and Director of Research for the Real Estate Center at Texas A&M University, Dr. Mark Dotzour. Bruce and Dr. Dotzour discuss commercial real estate, how commercial real estate will see similar financial problems, how the decline in the U.S. dollar makes real estate to foreigners look cheap, CAP rates and the future of commercial real estate, how CAP rates work, how Texas compares to California in price and market cycles, Texas and price inflation in the coming years, migration to Texas, how Texas is the number one exporting state in the country, unintended consequences of government solutions for the lending industry, Greenspan’s take on fixing the economy, how Bernanke compares to Greenspan, how Fannie Mae and Freddie Mac will come into play in the coming years, and possible tax law changes.

Dr. Mark G. Dotzour is the Chief Economist and Director of Research for the Real Estate Center at Texas A&M University in College Station, Texas. He earned his Ph.D. in the Department of Finance at the University of Texas at Austin in 1987 and served as Associate Professor of Real Estate and Finance at Wichita State University for 10 years. As Chief Economist, he is currently doing market research to monitor how global and national trends are likely to impact residential and commercial real estate markets.

Prior to his academic career, he was president of Gleneagles Development, Inc., developing residential subdivisions in Wichita, Kansas. He also served as president of Dotzour Inc., Realtors, which was a residential brokerage firm in Wichita.

He has been at the Real Estate Center since August, 1997. Since then, he has published 59 articles in magazines and given over 700 presentations to more than 90,000 people. His research findings and comments have been published in the Wall Street Journal , Money Magazine, USA Today and Business Week. He was a recent guest on the Jim Lehrer Newshour on PBS.

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Mark Dotzour of Texas A & M #50

This week, Bruce Norris is joined by Chief Economist and Director of Research for the Real Estate Center at Texas A&M University, Dr. Mark Dotzour. Bruce and Dr. Dotzour discuss how global trends have affected residential real estate, how interest rates are determined, how central banks have lost some control over monetary policy, how the lending industry is changing, how lenders found out the ultimate way to protect themselves from risk, bond agencies missing that risk, how the U.S. has exported some toxic paper and why it worked, the ramification of downgraded ratings, the credit crunch, how the U.S. just started seeing the damage from the mortgage market, how March will bring more realistic news, foreign investors, China and credit securities, real estate boom in foreign markets, what our interest rate should really by in the current market, how the U.S. would see higher interest rates, inflation in the U.S., recession and effects on Asia, stagflation and comparison to past cycles, why real estate is in demand as an asset, and Texas prices.

Dr. Mark G. Dotzour is the Chief Economist and Director of Research for the Real Estate Center at Texas A&M University in College Station, Texas. He earned his Ph.D. in the Department of Finance at the University of Texas at Austin in 1987 and served as Associate Professor of Real Estate and Finance at Wichita State University for 10 years. As Chief Economist, he is currently doing market research to monitor how global and national trends are likely to impact residential and commercial real estate markets.

Prior to his academic career, he was president of Gleneagles Development, Inc., developing residential subdivisions in Wichita, Kansas. He also served as president of Dotzour Inc., Realtors, which was a residential brokerage firm in Wichita.

He has been at the Real Estate Center since August, 1997. Since then, he has published 59 articles in magazines and given over 700 presentations to more than 90,000 people. His research findings and comments have been published in the Wall Street Journal , Money Magazine, USA Today and Business Week. He was a recent guest on the Jim Lehrer Newshour on PBS.

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The Norris Group Team Show #49

Bruce is joined once again by the experts at TNG: Craig Hill the hard money loan officer, Andrea Jennings the agent, and Greg Norris the property buyer. Bruce and Craig discuss what Craig needs to see for those looking for a hard money letter, what mistakes he's seeing in the market, how investors are buying, what risks not to make in a down market, and bulk buys. Greg and Bruce discuss the use of comps, pricing in a down market, how quickly prices are descending, how to figure out what a property is worth, how quick he’s gotten at repairs, how often auctions are spitting out deals, performance by auction companies, deficiencies he stays away from when looking at properties and the change in auction attendance. Andrea discusses selling what TNG buys, why price and condition are important, buyers in the current market, why there is lots of hand holding, and how picky they are about repairs.

The Norris Group officially started in 1997 when Craig Hill joined The Norris Group to open up the hard money loan division. Since inception, The Norris Group has added several team members including full-time Realtor Andrea Jennings and full-time property buyer Greg Norris. Together The Norris Group team has almost a century of combined experience.

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The Norris Group Team #48

To wrap up 2007, Bruce Norris takes some time to interview TNG team members Craig Hill (hard money loan officer at The Norris Group), Andrea Jennings (Realtor), and Greg Norris (Property Buyer). Together the four talks about what they've seen in 2007 and how quickly the market has shifted. Craig talks about how long he’s been in the business and how he came to work at TNG, what he’s hearing every day from investors calling in, why access to cash is important in this California real estate market, misconceptions in the marketplace, investors sitting on the sidelines in 2007 and 2008, the transition of deals, and recent auctions. Greg and Bruce discuss his background and what he brings to the table at TNG, recent real estate auctions, important skills to have, trustee sales, how he preps for a trustee sale, how title companies have made mistakes, target inventory, and how many home owners have equity. Andrea talks with Bruce about prices dropping, buyer babysitting, banks and appraisals, BPOs, repairs, REOS then and now, inventory numbers, change in agents’ attitudes, and misconceptions between investors and agents. They also warn of investors trying to play catch up 2008 and tie breakers.

The Norris Group officially started in 1997 when Craig Hill joined The Norris Group to open up the hard money loan division. Since inception, The Norris Group has added several team members including full-time Realtor Andrea Jennings and full-time property buyer Greg Norris. Together The Norris Group team has almost a century of combined experience.

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Foreclosure Expert Ward Hanigan #47

Bruce Norris is joined once again by California foreclosure expert Ward Hanigan. Bruce and Ward in this session discuss new litigation which could mean big trouble for lenders, the bill being introduced that would allow “cram downs,” the lost art of assumptions, selling real estate today in San Diego, what Ward’s students are doing now, why the real estate industry at large was so unprepared for the downturn, percentage hit in price in San Diego so far, the rental market, predicted bottom of the market, Ward’s favorite title holding entity, the Land Trust, three different entities to hold properties, and subject to.

Ward Hanigan is a full-time foreclosure specialist and trainer in San Diego County. He brings you over 37 years of real estate experience, with a degree in Economics and a Doctorate in Law. He has worked in California's foreclosure market exclusively since 1982, and as a consequence he has extensive experience finding cash, researching title, handling evictions, rehabbing, reselling, consulting, and is a "one-on-one" trainer and mentor to some of the most successful foreclosure practitioners in the Western United States.

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Foreclosure Expert Ward Hanigan #46

Bruce Norris is joined by Southern California foreclosure expert and president of ForeclosureForum.com, Ward Hanigan. Bruce and Ward discuss how Ward got started in the forclosure business, investing in the 1980s, why Ward went for a law degree, Ward’s early mentors, California trustee sale market in the 1980s, what the trustee sale market is doing now, Ward’s Dingbat Retirement Program, how he has set up a reoccurring income stream, what properties he finds attractive, why tenants can make or break an investment, finding your customer and finding out what they want, Section 8, how San Diego has changed since late 2005, current conversion rates of trustee sales, deal breakers when looking at trustee sale properties, Ward’s take on the new subprime solutions, what lenders will be dealing with in 2008.

Ward Hanigan is a full-time foreclosure specialist and trainer in San Diego County. He brings you over 37 years of real estate experience, with a degree in Economics and a Doctorate in Law. He has worked in California's foreclosure market exclusively since 1982, and as a consequence he has extensive experience finding cash, researching title, handling evictions, rehabbing, reselling, consulting, and is a "one-on-one" trainer and mentor to some of the most successful foreclosure practitioners in the Western United States.

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Steve Silva of Market Point Realty Services #45

Bruce Norris is joined by REO agent and owner of Market Point Realty, Steve Silva. Steve and Bruce talk about how busy Steve has quickly become, how fast the market has changed compared to the 90s, the willingness of lenders to work out deals with borrowers, why the borrower and lender can't seem to make it work, how the chain of command has made things worse, inventory this cycle compared to the last downturn, the new phenomenon of builders packing up and waiting for the market to return, the requirements of being an REO agent, what an REO agent is very busy doing these days, the REO process, why comparable sales aren't always a good benchmark to use when deciphering real value, vacancy rates, and the recent purchase of an auction property that was Steve's listing that he's managed for almost one year and the journey he took with the bank.

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Christopher Thornberg of Beacon Economics #44

In this second interview, Christopher Thornberg and Bruce Norris discuss how builders are adjusting to the new California real estate reality, how builders are notoriously optimistic, why builders continue to build, inflation pressure and why it's hard to predict, consumer spending, when the subprime peak will occur, possible policy changes and the presidential elections, how property taxes will cause problems for cities around the nation, employment, out migration, and the commercial market.

Christopher Thornberg is a founding partner of Beacon Economics. Dr. Thornberg is an expert in the study of regional economies, real estate dynamics, labor markets and business forecasting. He has been involved in a number of special studies measuring the impact of important events on the economy, including the NAFTA treaty, the California power crisis, port security, California water transfer programs and the September 11th terrorist attacks. Prior to launching Beacon he worked with the UCLA Anderson Forecast where he regularly authored the outlooks for California, Los Angeles and the East Bay as well as performing a number of specialized forecasts for regions and industries. Dr. Thornberg lectures on a regular basis at a variety of public and private events, has appeared on CNN, Fox News and CNBC and is widely quoted in the press. He received his Ph.D in Business Economics from The Anderson School and his B.S. in Business Administration from the State University of New York at Buffalo. He specializes in International and Labor Economics. Dr. Thornberg continues to teach in the MBA program at UCLA and previously held a faculty position in the economics department at Clemson University.

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Christopher Thornberg of Beacon Economics #43

Christopher Thornberg is back with Bruce Norris discussing recent CEOs being fired or leaving financial firms, past bubbles vs. current real estate bubble, bond ratings, affordability issues in real estate, Super SIV fund, how real estate will change consumer spending, how foreclosures will effect prices, foreclosures in some of the most respected and stable financial institutions, possible bank solutions, what rental markets will do in the coming years, and why banks will have a hard time if they set bad precedents.

Christopher Thornberg is a founding partner of Beacon Economics. Dr. Thornberg is an expert in the study of regional economies, real estate dynamics, labor markets and business forecasting. He has been involved in a number of special studies measuring the impact of important events on the economy, including the NAFTA treaty, the California power crisis, port security, California water transfer programs and the September 11th terrorist attacks. Prior to launching Beacon he worked with the UCLA Anderson Forecast where he regularly authored the outlooks for California, Los Angeles and the East Bay as well as performing a number of specialized forecasts for regions and industries. Dr. Thornberg lectures on a regular basis at a variety of public and private events, has appeared on CNN, Fox News and CNBC and is widely quoted in the press. He received his Ph.D in Business Economics from The Anderson School and his B.S. in Business Administration from the State University of New York at Buffalo. He specializes in International and Labor Economics. Dr. Thornberg continues to teach in the MBA program at UCLA and previously held a faculty position in the economics department at Clemson University.

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