3rd quarter housing update for Southwest California. Home sales, median price and inventory information.

1. Into the Home Stretch
Unless the market completely shuts down between now and the end of the year, 2015 will go into the
record books with a slight increase in sales over 2014 and maybe even a little improvement over 2013.
After falling 16% in August, September sales ticked back up 5% for the region and stayed 6% ahead of
last August. So even if our 4th quarter is no better than our 1st quarter (which wasn’t great), we will still sell
a few more than the 10,618 units sold in 2013. So far through 3 quarters we’re running 9% ahead of last
year (7,626/8,356). However pending sale, that indicator of what the future holds, is at it’s lowest point
since January so that doesn't bode well for October sales volume.
Prices are holding up but softening. Our regional median prices dipped 1% from August to September led
by Murrieta with a 6% month-over-month drop and Temecula falling 2%. We still held a 6% advance over
last August and looking at the cumulative 3 quarters of the year we are 4% ahead of last year
($299,439/$312,901). For the region we should end the year ahead of last year again marking the 5th
straight year of price appreciation for the region.
Some folks that get paid for their opinion believe we’ll see price stagnation or even reduction over the next
12 months as new home builders ramp up and increase the supply past the demand curve. Yet others will
tell you that pending interest rate hikes by the Fed will have a dampening effect on sales. I think they’re
both right but not necessarily for our region. It’s been less than three years since those same
prognosticators were bemoaning the ‘fact’ that the Inland Empire would be lagging the rest of the state in
recovery, that our region would never again see the prices we did in 2007, that our jobs market would not
rebound with the rest of the state.
WRONG!
Turns out the IE is leading the state in jobs creation. And while our prices have not rebounded to the levels
we saw in 2008, that’s not a bad thing. The OC and San Diego have bounced back strongly making us
once again the affordable housing destination for Southern California. What sweetens that pot is that not
only are we affordable, but we have established a firm reputation as a quality of life destination as well.
Now if those pesky Millenials would just start forming households and buying homes…
In addition to the potential for interest rate hikes, the housing industry is also facing TRID, the TILA
RESPA Integrated Disclosure (TRID) rule. Making its debut on Monday, October 3rd, this massive rule
weighs in at nearly 2,000 pages and impacts all businesses that touch a residential mortgage, as well as
homebuyers. The Consumer Financial Protection Bureau (CFPB) is ready to enforce this rule. Compliance
presents a challenge, as it requires large-scale operational changes for lenders, title companies and many
more.
In response to NAR and others, the CFPB has indicated that from now through yearend their involvement
will be ‘advisory’ rather than’ ‘ punitive’, but effective 2016 the CFPB will start flexing their rather ominous
(and unregulated) muscle. At the very least, TRID marks the end of the 30 day escrow with compliance
issues expected to stretch the ‘normal’ closing period to 45 days or more.
For a variety of reasons (see page 9) the next three months represent the best home buying opportunity
we’re likely to see for the foreseeable. Do your part. Buy a home. Already got one? Buy another. Heck,
buy two. Rental rates are skyrocketing but prices and interest rates won’t be this low again so we’re
counting on you to make this economy work. Don’t let me down.

2. SW Market @ A Glance
Southwest
California Reporting
Period
Current
Period
Last
Period Year Ago
Change
from
Last
Period
Change
from
Year
Ago
Existing Home Sales
(SFR Detached)
September
2015 946 904 893 5% 6%
Median Home Price $319,339 $322,174 $300,446 1% 6%
Unsold Inventory
Index (SFR Units) 2,592 2,610 2,726 1% 5%
Unsold Inventory
Index (Months) 3 3.3 3.5 10% 14%
Median Time on
Market (Days) 60 62 64 3% 6%
Source: CRMLS

3. 0
100
200
300
400
500
600
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Temecula 378 501 493 465 410 599 582
Murrieta 396 505 483 423 399 577 530
Menifee 378 452 475 387 330 576 451
Hemet 341 453 429 241 364 525 482
Lake Elsinore 198 262 319 243 223 307 287
Perris 196 239 204 191 199 274 236
Wildomar 80 90 89 91 72 100 98
Canyon Lake 52 80 70 64 54 81 59
HomeSales
Southwest California
SFR Home Sales
Quarterly Average – 2014-2015
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Temecula $411,696 $431,460 $443,289 $421,433 $424,190 $453,256 $449,098
Canyon Lake $401,309 $423,850 $431,960 $411,760 $347,519 $435,527 $402,819
Murrieta $365,211 $373,916 $385,359 $378,290 $369,258 $382,667 $397,311
Wildomar $303,317 $314,060 $323,505 $315,909 $327,188 $341,045 $354,721
Lake Elsinore $276,497 $277,338 $285,311 $287,821 $286,995 $303,251 $304,898
Menifee $253,648 $273,164 $267,102 $274,565 $280,274 $289,494 $290,142
Perris $233,120 $237,266 $238,264 $349,304 $257,080 $259,262 $252,968
San Jacinto $189,442 $187,857 $198,605 $308,375 $204,745 $205,705 $221,655
Hemet 174576 $191,535 $192,218 $192,085 196,296 $203,526 $207,450
MedianPrice
Median Price

4. 0
50
100
150
200
250
3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15
Southwest California Homes I-215 Corridor
Single Family Sales
Menifee Canyon Lake Hemet San Jacinto Perris
0
50
100
150
200
250
3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15
Southwest California I-15 Corridor
Single Family Home Sales
Temecula Murrieta Lake Elsinore Wildomar

5. $0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15
Southwest California Homes I-215 Corridor
Single Family Homes
Median Price
Menifee Canyon Lake Hemet San Jacinto Perris
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15
Southwest California Homes I-15 Corridor
Single Family Homes
Median Price
Temecula Murrieta Lake Elsinore Wildomar

6. September Median Price:
2014 2015 %
Temecula $449,677 $448,921 --
Murrieta $386,494 $381,536 1%
Menifee $267,741 $298,038 10%
Lake Elsinore $288,002 $303,413 10%
Wildomar $310,104 $345,501 10%
Canyon Lake $378,270 $410,108 8%
Hemet $186,736 $210,124 11%
San Jacinto $205,352 $220,566 7%
Perris $231,625 $255,846 10%
September 2015 Transaction Value*:
Temecula $79,907,987 Lake Elsinore $29,127,609
Murrieta $57,993,447 Wildomar $13,129,048
Menifee $44,109,671 Canyon Lake $7,792,050
Hemet $33,199,625 San Jacinto $15,219,050
Perris $22,514,442 Total $302,992,920
* Revenue generated by single family residential transactions for the month.
August 2015 Transaction Value*:
Temecula $77,485,734 Lake Elsinore $26,637,000
Murrieta $71,002,600 Wildomar $10,291,045
Menifee $41,659,340 Canyon Lake $8,593,100
Hemet $31,260,901 San Jacinto $13,110,300
Perris $16,063,799 Total $296,103,819
* Revenue generated by single family residential transactions for the month.

7. September Market Activity
By Sales Type
Standard Sale Bank Owned Short Sale
Active
% of
MKT Sold
% of
MKT Active
% of
MKT Sold
% of
MKT Active
% of
MKT Sold
% of
MKT
Temecula 437 96% 165 93% 9 2% 5 3% 10 2% 7 4%
Murrieta 425 93% 135 89% 9 2% 9 6% 17 4% 7 5%
Wildomar 68 88% 34 89% 3 4% 2 5% 3 4% 2 5%
Lake Elsinore 241 86% 92 96% 8 3% 2 2% 15 5% 2 2%
Menifee 389 91% 135 91% 11 3% 11 7% 19 4% 4 3%
Canyon Lake 124 95% 16 84% 1 1% 1 5% 5 4% 2 11%
Hemet 388 90% 148 94% 15 3% 4 3% 21 5% 4 3%
San Jacinto 143 84% 59 86% 4 2% 6 9% 19 11% 4 6%
Perris 144 89% 74 84% 4 2% 7 8% 12 7% 2 2%
Regional
Average 2359 91% 858 91% 64 2% 47 5% 121 5% 34 4%
0
500
1000
1500
2000
2500
3000
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Inventory Sales
Inventory v. Sales

9. The Next Three Months: Best Time to Buy
DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 06, 2015
Low mortgage rates, declining home prices, and homes that are lingering on the
market longer are three main reasons why the next three months could be the
best time to buy so far this year, says Jonathan Smoke, realtor.com®’s chief
economist.
“The spring and summer home-buying seasons were especially tough on
potential buyers this year with increasing prices and limited supply,” Smoke
says. “Buyers who are open to a fall or winter purchase should find some relief
with lower prices and less competition from other buyers.”
Read more: 5 Top Motivators for Buying Now
The biggest challenge buyers will likely face buying in the next three months is
the limited number of choices. There are fewer homes for-sale this fall than last
year and housing inventory has already peaked for 2015, Smoke says.
In many markets, real estate is making its seasonal transition and is tilting in
favor of home buyers lately.
Also, buyers are locking in low mortgage rates as the Federal Reserve continues
to delay raising rates. For the past 10 weeks, the 30-year fixed-rate mortgage
has averaged below 4 percent, according to Freddie Mac.
Here are some more factors pointing to a slowdown in the overall housing
market:
•Median home prices dropped 1 percent month-over-month in August (however,
prices are still up 6 percent year-over-year).
•Homes are staying on the market longer: The median age of home inventory is
80 days, up nearly 7 percent from August.
•Mortgage applications dropped 6.7 percent week-to-week.
80% LTV - Subprime is BACK | commercial and residential
This scares me…
A recent email ad I received. Déjà vu all over again.

10. Interesting stats from Corelogic on undervalued v.
overvalued markets across the country. They’re anticipating
Riverside County to remain /normal/ through 2020.

12. SRCAR is maintaining it’s OPPOSITION to the HERO Program until such time as
they comply with certain consumer protection standards and meet the
requirements set forth in recent letters from the FHA and FHFA regarding lien
priority.