COVERAGE INFORMATION:
California Department of Real Estate (DRE) NEWS CLIPS service coverage:
Monday through Friday (except state holidays) each week includes electronic format articles retrieved from newspapers
or news services that report real estate related news in California and some national services. Coverage is for California
newspapers that are available electronically via the Internet – and any significant related breaking news.
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© Copyright 2023, California Department of Real Estate Links to web sites do not constitute an endorsement from The California Department of Real Estate. These links
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Top Stories
A landmark verdict sent shockwaves through the real estate world. Here’s how agents are adapting.
ANDY MEDICI, The Sacramento Business Journal (Subscription)
Veteran real estate broker Vickey Barron has some harsh advice for agents starting out in the industry.
“I would tell them to go drive the UPS truck and get $170,000 a year and health benefits,” Barron said. “I just cannot, with a good heart, encourage them to enter the ring because I think they will get knocked out.”
That’s because the New York-based Compass Real Estate broker has been keeping up with the wave of class-action lawsuits targeting how commissions are structured — including a recent $1.78 billion jury verdict in Sitzer/Burnett v. NAR that sent shockwaves through the industry.
National News
Americans Rush to Buy Houses as Prices Hit New Milestone
ALEXANDER FABINO, Newsweek
Amid declining mortgage rates, the U.S. housing market saw a surge in activity with housing prices reaching their highest point since October of last year.
A report issued by Redfin late last week indicated a reinvigoration of buyer and seller participation in the housing market, marked by a steep increase in pending home sales and housing prices for November, coinciding with the drop in mortgage rates, which currently stand at 6.64 percent, according to Mortgage News Daily.
Lower Rates Contributed To November Homebuilding, But More Supply Still Needed, Analysts Say
ERICA DRZEWIECKI, National Mortgage Professional
Housing inventory is on its way up, with single-family residential construction in November jumping 18% above October’s revised figure, the highest since April 2022.
The U.S. Census Bureau and Department of Housing and Urban Development’s monthly residential construction report indicated total month-over-month increases
in privately-owned housing starts and completions.
Housing Starts Surge in November
HANNAH JONES, Realtor.com
New residential construction activity surged in November, rising 14.8% from October’s level to an annual rate of 1,560,000 housing starts, 9.3% higher year-over-year. This surge was due to both an 18.0% increase in single-family housing starts month-over-month and an 8.9% increase in multi-family starts. Single-family housing starts rose to 1,143,000, the highest level since April 2022 and 42.2% higher than the previous year’s level. Multi-family starts clocked in at 404,000 units, which though higher than the last 3 months, remains 33.7% lower year-over-year. This uptick in housing activity aligns with the slight improvement in homebuilder outlook in December, likely due to easing mortgage rates.
The Office Market Had It Hard in 2023. Next Year Looks Worse
PETER GRANT, The Wall Street Journal (Subscription)
Office building owners, hammered by falling demand and high interest rates, struggled in 2023. But they mostly managed to stay afloat.
That is going to be a lot harder to do next year.
Many landlords have been able to extend their loans, often by putting in more capital. But a lot of those extensions are now expiring, and owners are losing hope that occupancy rates will rebound soon.
California News
Where’s the cheapest spot to live in California – and it’s not cheap
JONATHAN LANSNER, The Orange County Register (Subscription)
So where is California living the cheapest? And how do those costs compare to the “heyday” of 2016?
Think inland and farming regions.
No. 1 is El Centro, at the Mexico border. It costs 0.1% above the US average – that’s the No. 78 highest of the nation’s 384 metros. That expense ratio is up 4.4 percentage points vs. 2016, the 40th largest increase nationally).
The next two are Central Valley agriculture hubs, both costing 2.4% above the US norm – 66th highest. Hanford costs are up 5.3 points (No. 31) since 2016. And Visalia is up 7.8 points (No. 8).
California home sales volume: the slide continues in October 2023
CARRIE B. REYES, First Tuesday Journal
California home sales volume continued at a dwindling pace in October 2023, still down significantly from 2022. This latest decrease follows a weak seasonal bump which struggled to build momentum during the (usually) busy spring buying season.
Just 21,700 new and resale home transactions closed escrow in California during October 2023, roughly level with the prior month and down 6% from a year earlier, when sales volume downturn was taking root.
Continuing the declining trend, year-to-date (YTD) sales volume (and broker fees) are a fee-killing 29% below 2022 as of October 2023.
Crash or climb? Jobs may decide fate of California home prices
JONATHAN LANSNER, The San Diego Union-Tribune (Subscription)
Will California housing’s future be a crash, correction, cooling – or a climb?
Some folks are antsy about potential price tumbles. One poll found nearly half of Americans fear a housing crash in 2024. So my trusty spreadsheet looked at California home price history back to 1975 to see what might power the next move.
The analysis eyeballed gyrations in a California price index from the Federal Housing Finance Agency against the average 30-year fixed rate mortgage from Freddie Mac and inflation as tallied by the Consumer Price Index. Plus, we gauged home-price changes vs. statewide unemployment rate and the total income of Californians, minus inflation, as a benchmark for the broad economy.
Industry News
DOJ objects to 2nd settlement bid in MLS PIN commission case
ANDREA V. BRAMBILA, Inman (Subscription)
Not enough.
That’s the message from the U.S. Department of Justice to a federal court in Boston Monday after homeseller plaintiffs and a broker-owned MLS adjusted a proposed settlement to address the federal agency’s lingering “concerns.”
In a Dec. 18 letter, DOJ attorney Jessica Leal informed Judge Patti Saris of the U.S. District Court in Massachusetts that the agency had conferred with lawyers for the plaintiffs and MLS Property Information Network (MLS PIN) to attempt to address concerns that the deal’s proposed commission rule changes may not go far enough, but wasn’t satisfied with the latest version of the deal.
Housing groups jointly sign letter urging full funding for FHA, Ginnie Mae
CHRIS CLOW, HousingWire (Subscription)
A coalition of seven housing interest groups including the Mortgage Bankers Association (MBA), the Community Home Lenders of America (CHLA), the National Association of Realtors (NAR) and the National Reverse Mortgage Lenders Association (NRMLA) have co-signed a letter urging the full funding of both the Federal Housing Administration (FHA) and Ginnie Mae.
As government funding remains a sticking point in a very narrowly divided legislative branch of government, reductions for these housing agencies could allow them to fail to meet critical housing challenges that many Americans continue to face, the letter explained.
Adaptive Reuse
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Property News
What You Get: $3.5 Million Homes in California
ANGELA SERRATORE, New York Times (Subscription)
A 1906 Craftsman house in San Anselmo, a 1936 Tudor Revival home in San Diego and a 1970 farmhouse in Santa Ynez.
Resources, Webinars, and Other Items of Interest
Consumer Alert – Department of Real Estate Alerts Consumers About Recent Lawsuit Against MV Realty
Department of Real Estate
After California Attorney General Rob Bonta’s recent announcement of the filing of a lawsuit against MV Realty, a Florida-based company that engaged in a predatory scheme to lock vulnerable homeowners into 40-year exclusive listing agreements and placed illegal liens on their homes, the Department of Real Estate (DRE) is alerting consumers about the deceptiveness and how impacted consumers can file a complaint.
In Case You Missed It
Women at Fast-Growing Realty Firm Say They Were Drugged and Assaulted
DEBRA KAMIN, New York Times (Subscription)
The closing night party at the annual conference of eXp Realty was — in the company’s own words — “epic.”
The $2 billion company is one of the fastest growing brokerages in the world, with nearly 90,000 agents. And on this night in October, eXp was showing off.
It was a declaration of eXp’s culture: Work hard, play harder — and build wealth in the process. But in more than 30 interviews with current and former eXp agents, women said the culture has an underbelly. The company’s highest earners are granted star status, and allegations of misconduct are ignored.
In two lawsuits, the first filed in February and the second on Thursday, five women described a yearslong pattern of predatory behavior by two marquee agents. The women said the agents drugged them during alcohol-soaked eXp events, and four of the women said they were then sexually assaulted. Executives ignored complaints about the men for years, acting only after the first lawsuit was filed, agents said.
