Tip of the Iceberg by Bruce Norris

California Comeback?

What we see on the surface of the real estate market looks benign. Below the surface, however, looms trillions of dollars of problems we are attempting to ignore. Conducting business in the most unnaturally manipulated market ever seen has been challenging to say the least. And that’s exactly why you must attend our upcoming event, The Tip of the Iceberg, on February 27th in Costa Mesa. 

Over the last three years, California real estate has been decimated with several California markets seeing price declines in excess of 50%. Many are now pointing to a “Comeback” and the numbers provide support for their conclusions: inventories are down and median prices are escalating, sales have increased, and there’s been a decline in bank-owned properties.  

Beyond these indicators, state and national policies toward borrowers who stopped making their payments have become increasingly lenient. But how long will this continue? When will we reach the ultimate point of foreclosing, absorbing our losses and moving forward?  

Some say the worst is over. We’re not convinced!  

The Tip of the Iceberg will most likely be the last report I write for a few years. As I finish the research, it’s clear the next few years will greatly depend on how the new restrictions, changes, and guidelines are implemented. 

In my opinion, none of the events required for a comeback to begin have taken place. The current state of the market is merely a mirage, created by unnatural intervention. We have entered a new era. Welcome to: government intervention! 

Our past reports have concentrated on the real estate market from a macro perspective—the roots of major trends in the market. However, the reality of the current situation is, what may be happening in Riverside, isn’t happening in other California markets. 

The Tip of the Iceberg presents the micro perspective in markets where our clients buy wholesale, to resell at a profit or hold properties and rent. For the first time, I have access to the data that makes the view from the micro perspective possible. On the back of this page is just a taste of the valuable information included in our latest report:

A Case Study: Hemet

What’s the likelihood that Hemet is ready for price increases in the near future? Property is very affordable, inventory is low, forecloses have decreased and prices have stopped declining. Everything sounds great, however, looking beneath the surface and asking a few pertinent questions yields a more complete picture of the situation. If the stats you are looking at arrived at these levels by artificial means, you’d better figure out what’s real and what isn’t. 

First, and most importantly, what percentage of homeowners holds equity in their property? Now we uncover the reality of the situation: approximately 60% of homeowners with a property valued under $300,000 owe more than the property is worth. Nearly a third of the homeowners owe double what their house is worth! Is it realistic to think home prices in Hemet will rise?

Secondly, where are the wholesale deals in Hemet and what are the trends?

Also, we’ll be looking at the price per square foot of home sales. Is there a difference in price between a home that sells for $500,000 and a home that sells for $300,000? We’ll get to the bottom of it.

These are the insights awaiting you at The Tip of the Iceberg. 

Perhaps you feel you’ve “heard it all before.” However, by missing this event you’ll be deprived of current information with direct insight into the current real estate investment market. You may save a few on the attendance fee, but the cost of making poor investment decisions due to being uniformed on the current state of the market is far greater. 

The Tip of The Iceberg promises to deliver a startling and informative portrait of California’s current Real Estate investment market, while casting a very discerning eye toward its highly uncertain future preparing your business and your family for the coming years.

I’m throwing in some additional bonuses. Register before February 21st and you’ll receive one free year of our California Economic Update Newsletter ($129 value). You’ll also be given unlimited access to much of the data and reports we used in preparing this report via our web  portal. We sold out before the early-bird pricing ended last year so please do not wait to register.