Real Estate News for Monday, January 9th, 2006

I just wanted to let everyone know that the Open House I hosted yesterday has just reduced it's price to $98,000! It's a total steal, click here to read more!

Now for today's top stories.

Dairies Moving Out of Inland Empire. Housing developers are paying top dollar for land to farmers, many of whom are relocating their herds north to the San Joaquin Valley. Once home to one of the nation's largest concentrations of dairy farms, the Inland Empire's $500-million dairy industry is rapidly evaporating as dozens of farmers sell out to real estate developers. In the last two years, more than 160 dairies — nearly 80% of those operating just a year ago — have either been sold or are in escrow, according to the Milk Producers Council, a trade association based in Chino. The industry could be virtually gone within five years. The dairy lands of San Bernardino and Riverside counties make up some of the largest undeveloped tracts in metropolitan Southern California. Developers are offering $400,000 to $500,000 an acre, and sometimes more, for land farmers purchased decades ago at just a fraction of that price. Five years ago, the same land sold for $50,000 to $100,000 an acre. Click here to read more.

Warning: Beware of Warnings About Real Estate. FUND investors who amassed colossal gains in real estate over the previous few years were warned not to expect a repeat in 2005. The long-running rally could lose steam, some analysts predicted, which meant that it was time to consider selling. But those naysayers turned out to be wrong. Many investors who stayed the course and ignored the warnings about real estate bubbles continued to profit: the sector ended yet another year among the top fund categories. Real estate funds returned an average of 11.9 percent, according to Morningstar, after climbing 32 percent in 2004 and 37 percent in 2003. For the five years through December, the annualized gain was 18.56 percent. By contrast, including dividends, the Standard & Poor's 500-stock index returned 4.9 percent last year and 2.7 percent, annualized, over the five-year stretch.

So now the question re-emerges: Can this highflying sector continue its ascent? Click here to read more.

Rising Rents Leave Tenants Struggling. It's not just homebuyers who are being hit with the high cost of living in San Diego, California. Those in the rental market are struggling to keep up with rents. According to a 2005 report, a San Diego County family must earn $22.27 per hour to afford a two-bedroom apartment in the county. That means that local renting families must have 3.3 minimum wage earners working full-time or one full-time wage earner working 132 hours per week just to be able to afford a modest two-bedroom unit. The study determines, based on a 40-hour week, 52 weeks per year, the hourly wage that a family needs to earn to afford rent and utilities in private housing markets across the country. San Diego County ranked eighth in affordability. The report indicates that the average renter hourly wage is only $13.71; that's nearly $9.00 less than the hourly wage needed to rent even a modest unit. Click here to read more.

Commericial Real Estate: The real estate boom is over. But don't expect market to go bust, analysts say. A doom-and-gloom report on the real estate industry caught the attention of the national media in early December, forcing down stock prices of major home builders. The report, published by the University of California, Los Angeles -- Anderson Forecast, predicted that the real estate and construction industries are headed for a slowdown that could last several years and result in the loss of 800,000 jobs, 500,000 in construction and 300,000 in financial services. "Housing is in a perilous position," concluded UCLA Anderson Forecast Director Edward Leamer, but he added that the downturn in housing won't push the country into recession. Rather than embracing the Anderson Forecast's pessimistic views, however, the seven economists and real estate industry analysts contacted by the Herald-Tribune presented far less dour perspectives. All of them believe the boom that began in 2002, and resulted in 20 to 30 percent annual price increases, is over. Sales of existing homes and new construction are falling and inventories are on the rise. With interest rates expected to ratchet further upward, buyer demand will soften and so will prices. But there won't be a bust. Click here to read more.

~Tina Jan~
Coldwell Banker Kivett-Teeters
1655 E. Sixth St.
Beaumont, CA 92223
Work: 951-845-5520 Ext. 105
Fax: 951-845-4916
Cell: 909-446-2666
Toll-Free: 1-877-TINAJAN
tina.jan@coldwellbanker.com
www.tinajan.com