What next?  That’s the question Dr. Chris Thornberg of Beacon Economics was attempting to answer for the audience attending the Oxnard Economic Outlook put on by the Oxnard Chamber of Commerce I attended this morning.

Dr. Thornberg explained that the biggest issue is the national economy—a lot of uncertainty out there for a lot of reasons.  Basic economic indicators are not that hard to read, but to figure out what Fed Chairman, Ben Bernanke, President Obama and Congress will do and how that will impact the recovery, well, that’s hard.  Clearly, he says, we’re at the bottom, the question is how strong will the recovery be?  He says according to the “Public Opinion Meter” the recession is over.  Dr. Thornberg is not so sure.  The economy today is 4% smaller than a year ago.  Across the board, unemployment is stabilizing but that just means that job losses are lessening, not reversing.  But the silver lining is that as bad as unemployment is in California, it is in better shape than the United States. 

So what shape will the recovery take?  He said some are predicting a “V” shaped recovery—a quick rebound.  Others are predicating a “U” shaped recovery, basically the same but not quite as quick.  Then there is the cruel “W” shaped recovery which I don’t need to elaborate on or the “L” shaped recovery that isn’t a recovery at all.  Whichever you pick, Dr. Thornberg wryly states it will certainly be an “S” recovery, as in SLOW.  He explains that underlying problems are not fixed.  Some relief for symptoms, yes, but that the road to health will take some time. 

Dr. Thornberg also does not believe home prices have bottomed out completely, despite the widely watched Case-Schiller Index showing home prices in many markets have had an increase.  He attributed some of that increase to seasonal buying, low interest rates and low inventory.  He stated that 15% of all homes mortgages are either delinquent or the properties have been foreclosed on and still owned by the banks.  There is also much craziness in the commercial real estate market but we don’t hear about it as much since much of that is handled in back rooms.  And he doesn’t think that low interest rates will continue for long.  His emphatic message was if you were thinking about a refinance, DO IT NOW.  We may be seeing inflation in 1 to 1½ years and interest rates will go up.  He pointed out that FHA is a disaster and so is Fannie Mae and Freddie Mac (the major sources of home financing in the U.S.) and were it not for the Fed buying the bonds to support them they would be in serious trouble.  This cannot continue indefinitely.

But despite his warnings, Dr. Thornberg thinks the longer term outlook for California is good and may emerge much stronger from this crisis.  In the meantime…there are no easy fixes.

It seems they’re everywhere. You can’t get away from them. They capture you in your car. They have official looking TV ads. They’re even on your computer screens when your surfin’ the net. “They” are the Loan Modifiers -Companies who provide a service to consumers to help get their home loans modified so the consumer can stay in their home. The problem is there is often a hefty upfront fee before they even begin “working” with your lender. And, yes, they’re even willing to let you miss a mortgage payment, so that their fee can be paid. The fees, often several thousand dollars, are monumental for those seeking some sort of mortgage relief and there is no guarantee that the modification will be granted by your lender.

The California Attorney General has already taken action against a few of the worst offenders. Now the State Bar of California is doing their part by listing 16 attorneys under investigation who are engaged in loan modifications.

San Francisco, September 18, 2009 — The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public.  Click Here to read the full story (includes the list of attorneys under investigation)…

I hear many stories of people being taken advantage of by these schemes with little to no result. Consumers end up in far worse financial shape than when they began the process with the loan modifier. Consumers would do better by using a low-cost or free service from local non-profit agencies skilled in working with lenders and consumers on credit and mortgage-related issues. In Ventura County, I know of 2 agencies that can assist.

• SurePath Financial Solutions (Formerly Consumer Credit Counselling Service)
• Cabrillo Economic Development Corporation

I am obviously out-gunned in the war against fraudsters, so Homeowner Beware! Choose carefully when seeking financial assistance and question those seeking you out. These companies are in business…and like all businesses, they’re in it to make money, regardless of the financial position it puts you in.

(This article was written by my fellow agent and collegue at RE/MAX Gold Coast REALTORS , Janet Dorsey.)

The City of Ventura is currently in the final stages of drafting an ordinance that will require Ventura property owners to apply for an annual permit to legally rent out their Ventura properties. (Applies to condominium units, single family homes, second dwelling units as well as apartments)  Property owners will be required to pay for the permit which will include an exterior inspection of the property by a code enforcement official.  Upon inspecting the exterior, the City official may require an interior inspection for an additional fee.  Obviously, they will require property owners to fix any substandard conditions or non-permitted uses and be assessed for any violations.

The City of Ventura’s stated goal is to eliminate substandard living conditions and one key method is through a permit process. The permit fees are to be used to financially cover the costs of implementing the ordinance.

Questions to consider:

• Are all rental owners in the city being asked to subsidize other property owners who are not complying with regulations already in effect?  
• How much of the fees collected go toward the administration and collection of fees and issuing permits? Is it cost effective and does it resolve the problems?  
• Will this program really help crack down on garage conversions and boot-leg units since owners of these properties would be unlikely to register their units with the city?  
• Are inspections of brand-new construction, or units in condominium/townhouse communities, really necessary?  
• The city already has existing laws that allow staff to inspect units and require owners to bring them into compliance.  Does this improve/strengthen existing laws?  
• Will the city actually do the inspections?  The city already charges properties with 4 or more units for inspections but often allows the owner to do their own inspections and simply fill out a certification form. 
• What does including the Ventura Business License/Permit No. in an advertisement have to do with the proposed Rental Housing Preservation program? What does it accomplish?  

The final proposed ordinance and resolution will be on www.VCCAR.net once it has been posted by the city.  You can also find more information on the city’s website at www.cityofventura.net/fire/building_safety/safehousing

What you can do: 

Attend the Ventura City Council meeting on Monday, November 24th at 6:00 PM

Get the word out.  If you are unable to attend the council meeting, write or contact the city council members and make your concerns known.  You can find contact information for the Ventura City Council is on the City of Ventura website.

UPDATE: 11/18/2008
The Ventura City Council will NOT be discussing the Ventura City Rental Housing Preservation Ordinance on November 24th.  The date has been changed to December 8th at 6pm.  This new hearing will probably NOT have an ordinance to be voted on, only a staff report.  There will now be more public input before the city council votes on a specific ordinance.

UPDATE: 1/14/2009
Last night, the Ventura City Council abandoned the proposal to inspect all rental homes and duplexes and charge a fee.  The city will be shifting two city inspectors who examine new construction to code enforcement.  They are still considering requiring that rental owners register with the city and pay a small fee, but for now, mandatory inspections are out.

As a consequence, millions of U.S. citizens are under the impression that asbestos exposure is a concern of the past and are unaware aware that the remodeling of older homes has the potential to cause toxic exposure.  Homes built before 1980 could easily contain asbestos.  Nonregulated asbestos material can be legally performed by homeowners, regular contractors, or licensed asbestos abatement contractors as long as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) are not violated.
The health risks involved in handling non regulated asbestos materials is small but the removal should be done in a manner that will minimize the release of fibers due to breakage. It is recommended, because breakage in inevitable, that one wears asbestos related safety equipment including a disposable tyvek suit, gloves and must be medically able to wear a half mask respirator with High Efficiency Particulate Air (HEPA) filters, and adhere to the principles of wet removal and without visible emissions.

It’s worth taking the time to do research before tackling a big project whether you plan to do it yourself or hire a contractor.  For more in-depth information on health issues associated with asbestos, visit the Mesothelioma Cancer Center.  You should also visit the Ventura County Air Pollution Control District’s Website.

Anyone who has purchased Ventura County real estate in the last few years may benefit if the current market value is less than the price you originally paid.  The Ventura County Tax Assessor, Dan Goodwin, is proactive about lowering assessed values and most folks will not have to do anything to take advantage of Prop 8.  His department will automatically review each year’s lien date value to determine whether it should be maintained, lowered, or increased.  Unless there is a change in ownership or new construction, your assessment can never increase above the factored Proposition 13 base year value.  If you feel the assessment is still higher than the market value for the lien date you may file an Application for Changed Assessment.  You may also want to download this Assessment Appeals Information Pamphlet. 

Below is a quote from the June 20th, 2008 news release from the County of Ventura notifying Ventura County Property about their right to challenge their assessments.

The Ventura County Assessment Appeal Boards announced today that taxpayers that wish to challenge the value placed on their property by the Assessor may file an application to reduce their assessment.  The time for filing applications during the regular equalization period commences on July 2, 2008, and ends on November 30, 2008.  November 30th falls on Sunday, therefore, Monday, December 1, 2008 is the final day to file an application.  An application received on or post marked by December 1, 2008, shall be deemed to have been filed within the specified time period.  Applications may be request in person, by mail, or by phone and may also be obtained online at: http://ceo.countyofventura.org/cob. All applications must be returned to the Clerk of the Board of Supervisors, Ventura County Government Center, Hall of Administration, 4th Floor, 800 South Victoria Avenue, L#1920, Ventura, California, 93009-1920.

If you wish to file an Application for Changed Assessment, you will also need information on closed comparable sales to support your request.  The best way to get that information is through your real estate agent who can search the MLS database.  If you don’t already have a favorite Realtor (or if I am already your favorite), call me and I’ll be happy to help you.

For more comprehensie information on Proposition 8, visit the Ventura County Tax Assessor’s website at: http://assessor.countyofventura.org/TaxSavings/Declineinvalue.html.