The PIN Magazine February 2020 by The Power Is Now Media Inc.

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Black History Month!

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Our Cover Story

Harry C. Alford President of The NBCC

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Eric Lawrence Frazier, MBA President and CEO Office: (800) 401-8994 Ext. 703 Direct: (714) 361-2105 eric.frazier@thepowerisnow.com www.thepowerisnow.com www.blogtalkradio.com/thepowerisnow EDITORIAL TEAM Eric Lawrence Frazier MBA Editor in Chief (800) 401-8994 Ext. 703 Daniels George Managing Editor (800) 401-8994 ext. 712 daniels.george@thepowerisnow.com Goldy Ponce Arratia Graphic Artist and Design Manager (800) 401-8994 ext. 711 goldy.ponce@thepowerisnow.com

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FROMtHEEDITOR

hen I started planning for this February issue, I predicted that most people will be stuck with the traditional Valentine’s day fair; hunting down for the “favorite easy way recipes” for chocolates, or “how to plan a romantic date night” or even “the right shade of red to decorate” and so on. Well, you know what I am talking about as this is not particularly new. And I wouldn’t blame you, after all, love is in the air, we can feel it’s aroma all over, so allow me to wish you a happy Valentine, we love you all. First of all, I am quite happy with the progress that we have made so far. Last month, I shared with you our 5 point game plan and goals for the year and I am happy that we are actualizing that dream. With that, I want to welcome three VIP Agents to our team. My goal is to make sure that we are retaining VIP Real Agents who are writers and experts in all the 50 states, to contribute to the magazine and on our social platforms. We intend to be the resource for the local market opportunities nationwide. February, despite it being a month of love, others say its inventors and invention month, but I say it is the BLACK HISTORY MONTH. It is a month that I am proud to be called and to be associated with the African American Community. Everything about this month clearly tells its a month dedicated to all the African Americans. One of my favorite articles this month is about February 1st being the National Freedom Day. The day when the 13th amendment proposal was finally signed into law by President Truman. In fact, he wrote a proclamation urging citizens to pause and reflect on the

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

freedom bought for them. Also, note that this is the month when we celebrate the life history of Abraham Lincoln as he was born on the 12th of February. He was the man largely responsible for the Emancipation Proclamation. This month is epecially dedicated to the African Americans, so read on to find out why this month means so much for the African American community. In this issue, our cover story reflects the man responsible for uniting African Americans in business and the story behind the formation of the National Black Chamber of Commerce (NBCC). Harry Alford is a name perhaps recognizable to many, especially when it involves the inclusion of African Americans in business are the topic in the congress. We’ve heard him and we’ve seen what NBCC can do, but how did it all begin? That is what we are going to find out. The February Issue is fully packed with informational articles to keep you busy all through the month. We’ve picked 5 market areas that investors and homebuyers should be thinking about buying or investing in 2020. We’ve also made sure to add a few perks for our real estate agents and professionals, so read on to find out what this issue has in store for you. I also would like to remind you that we are launching three initiatives in the 2nd quarter; an online talk show called The Power Is Now Real Estate Round Table, The Power Is Now Realtor of the Year and Community Leader of the Year and lastly, and The Power Is Now Health Initiative. Details of these initiatives will be shared with you in the coming months. As it stands, 2020 will be quite a busy year for us, keep on showing love by supporting us on our weekly shows, reading our blogs, tuning in to our blog talk radio. Wewouldn’t be here were it not for you. Please take a moment and share this magazine, knowledge is power and the power is now! Have a prosperous month!

Eric Lawrence Frazier MBA CEO The Power Is Now Media, Inc.

TABLE OF

the power is now

CONTENTS 8. The State of California wants all homes to be net-zero in 2020 12. Tracking the State’s Progress. California’s renewable energy revolutions 18. California leads the United States in inflation. Housing costs largely to blame 23. Harry C. Alford, president of of the NBCC 26. At Par with the 60s: We explain why California’s unemployment rate is at its lowest it has been since 1969 28. Calfornia Senate advances a bill to cap the consumer loan interest rates at 36 percentage points 32. Mortgage Predictions: Experts predict that low-interest rates will last 36. Housing and Economic research: More homebuying in 2020, Freddie Mac Predicts 42. Big Tech Companies in Silicon Valley to inject billions to ease up the housing situation. Will it Help? 44. The Rise of iBuyer: But we are not scared says, Brokers 48. What to expect from the Richmond Housing Market 52. The Future of Real Estate: Embracing Disruptive Technologies in 2020 58. La Habra housing market trends in 2020 60. The Bay Area Market is cooling down. Here’s Why 6

magazine

64. Riverside housing market: A decade after the worst recession. Can we handle another recession? 68. Appreciation rates trends and housing market data 72. Oakland Market 2020: A buyer’s or seller’s market 76. Backing larger home loans now? What’s the game plan here Freddie Mac, Fannie Mae and FHA? 78. What the U.S.- Iran War could mean for the Housing Market 82. The Riverside Community College to ask voters for $715 million bond for college upgrading THE POWER IS NOW MAGAZINE | FEBRUARY 2020

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[POWER GREEN]

The State of California wants all homes to be net-zero in 2020

This plan has been designed to operationalize California’s Longterm Energy Efficiency Strategic Plan’s (CEESP) which aims to have 100% of new homes achieve ZNE beginning in 2020.

The California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) launched the program in order to build a self-sustaining market for all new homes to be net-zero energy by 2020.

“Zero Net Energy has been a vision for California for nearly 10 years, and with this industrysupported Action Plan, we are now ready to make that vision a reality with feasible, marketdriven concepts to transform the new residential housing market,” CPUC Commissioner Carla J. Peterman said in a statement.

even years ago, California drafted an Action Plan that would see a new generation of homes to increase their energy efficiency making it the first state in the U.S to require newly built homes to be solar-powered.

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

Net-zero energy buildings consume no energy than they produce with renewable energy sources. To achieve this dream, new buildings must have a source of renewable energy, for example, solar panels. Making California’s new solar requirement a critical step towards fostering the adoption of the net-zero energy construction.

Background of Net Zero Energy Building Goals CPUC adopted its first statewide Long-term Energy Efficiency Strategic Plan on September 18, 2008, setting the commencement of the program through 2020 or later. The strategic plan included two of its four “Big Bold Energy Efficiency Strategies” that NZE

to support the development of the Zero net energy buildings. The report also goes into detail about the need to constantly increase the energy efficiency code to eventually reach net-zero energy use. In 2015, the PUC again released the Residential New Construction Zero Net Energy Plan (Residential NZE Plan) which contains a detailed strategy for assuring the construction of new net-zero single-family homes and the low rise of the multi-family building by 2020. To facilitate the success of the plan and the attainment of netzero energy homes by 2020, the residential ZNE plan outlines a six Action Plan Framework and goals which are very critical to the ultimate success of reaching 2020 goal based on priorities: 1. Create demand and awareness This is important as it will ensure that all the stakeholders (homeowners & Developers) understand the benefits of the Zero Energy program. 2. Improve technical training, and education This is a goal that focuses on

will be achieved in California for all new residential construction by 2020 and commercial units by 2030. In 2013, the Public Utilities Commission released the 2013 Integrated Energy Policy Report which categorically highlights the works of the PUC, the CEC and many other stakeholders and beneficiaries of the plan in order WWW.THEPINMAGAZINE.COM

creating a robust and well-trained industry that is able to implement and adapt to the technology and integrated business strategies that are required to effectively meet the NZE goals. 3. Provide suitable technical tools While we recognize the varieties and the huge array of design and modeling technical tools that are currently available on the market, it is important that the NZE program has its own special suite of tools specific to the NZE program to provide consistency in the data flow. 4. Develop a work plan to finance NZE The whole purpose of this goal is to develop specific approaches and standards to quantify the value of the NZE homes, support a robust financing market and ensure that NZE homes are affordable. 5. Improve the support infrastructures One of the underlying need for the mainstream NZE is a grid and infrastructure that can effectively manage distributed generation energy. This is a goal that informs research and the direction for the utilities and state agencies to update the policies and programs to meet this need. 6. Alignment of NZE This involves aligning and coordinating all of the agencies, municipalities and market actors that are involved in achieving the NZE goals.

building energy standards, for the first time, will require that rooftop solar panels be installed on new single-family homes and low rise of the multi-family buildings to offset the home’s expected annual electricity use and achieve the zero-net electricity status. Obviously, there are exemptions to the standard, such as when buildings are deemed unsuitable for solar (shaded by trees or other buildings). The standard provides an option for the builders to tap into the community solar projects, which ultimately reduces the cost of solar power as long as these communities solar projects deliver the same customer and societal benefits as dedicated onsite systems. Affordability will be one of the huge problems impacting the development and acceptability of these homes. The CEC however in collaboration with developers has worked to give the industry some degree of flexibility. “Our hope is that this didn’t blindside anyone,” said commission spokeswoman Amber Beck, adding that the agency held meetings and took comments from stakeholders. Developers are tasked with supplying solar panels. The cost of these panels will be factored in their mortgage. According to CEC, this will result in savings of about $35 a month in energy bills.

The current building standards for homes in California save energy and water, reduce pollution, and shore up the electricity reliability, at the same time providing consumers with utility bills that exceed the upfront costs of meeting the code’s requirement. Homes built after 2020 under the NZE program are expected to have very energy efficient attics, and walls, improved ventilation systems, windows and doors, and properly installed insulation. Under this new code, new buildings will be efficient enough that their electricity use can be offset by a modest number of solar panels. The

Works Cited https://www.latimes.com/business/realestate/hot-property/ la-fi-solar-mandate-20181214-story.html https://www.burnhamnationwide.com/final-review-blog/ more-than-solar-californias-ambitious-net-zero-energybuilding-goals https://www.greentechmedia.com/articles/read/californiawants-all-new-homes-to-be-net-zero-in-2020

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

[POWER GREEN]

Tracking the State’s Progress California’s renewable energy revolution

dvancing the use and availability of renewable sources of energy is critical towards achieving the state’s ambitious climate change goals. On May 13, 2017, California smashed through another renewable energy milestone as one of its largest grid, under the flagship of the California Independent System Operator (CISO), which got 67.2% of its energy from renewable - not to include hydropower or solar sources. Factoring in hydropower sources raises the percentile to 80.7%. Currently, CISO controls 80% of the state’s power grid. Over the last seven years, the state has sought a suite of policies and programs aimed at advancing the renewable energy and ensuring that Californians, including the low-income and the disadvantaged communities, benefit from this transition. The state is working to achieve at 12

least 50 percent of its electrical power coming from clean energy resources (Solar, and wind), with projections aiming for a 100 percent transition by the year 2045. To achieve this, a new, bigger, bolder target was peremptory, prompting the creation of the SB 100. Senate Bill 100 was authored by Sen. Kevin de Leon and was signed into law by the former governor Jerry Brown. The bill established a landmark policy that required renewable energy and zero-carbon resources to supply 100 percent of electric retail sales and enduse customers by 2045. Under the policy, California’s renewable energy and zero-carbon resources supply 100 percent of the retail sales to end-use customers and THE POWER IS NOW MAGAZINE | FEBRUARY 2020

100 percent of electricity procured to serve the state agencies by December 31, 2045. As a requirement, the policy explicitly requires the transition to a zero-carbon electric system does not lead to increased greenhouse gas emissions elsewhere in the western electricity grid. Climate change is already affecting us, and California enacting such drastic measures put it at an advantage. California now has the opportunity to show the rest of the states, and countries across the world that it is possible for a state to achieve 100 percent clean energy.

How big of a deal is it? There is an enormous symbolism in the 100 percent. Which instantly sets a new marker for other states to match. Some notable states to say they will follow suit include Massachusetts, New York, Oregon, Washington, and Pennsylvania. It is worth noting that the SB 100 is not a big leap for the state of California or even a flash out of the

blue, or it is a new concept in its entirety, Hawaii has hit its high target. It is a plan and a step in the right direction - towards less pollution and more clean energy. This policy marks the culmination of a 15-year journey towards clean energy. Achieving 100 percent clean energy in California is 100 percent possible. Already, Californiaâ€™s big utilities are on their way to meeting the current target of 50 percent by the year 2030 with most of them running ahead of the schedule. As of the first Quarter of 2017, California was on the vanguard of solar installation capacity race with almost 19,000 megawatts. Additionally, the second Quarter of 2018 saw Californiaâ€™s grid operators hit a new record with solar alone providing more electricity than natural gas. We have to reckon with the fact that the age of clean energy is here, and it is here to stay. All this immeasurable growth goes a long way to show that California is far much capable of reaching and exceeding the ambitious clean energy goals. All these efforts to make sure that we have clean energy in the state are not in vain. There are several benefits. A healthy environment means a healthy economy. They go hand in hand. All the efforts by the state towards creating a renewable clean source of energy and climate policy have

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drawn huge investments and created local jobs. In 2016 for instance, the total state clean tech investment grew by 12 percent to $1.7 billion, which is more than two-thirds the total of the U.S. investment in cleantech. Currently, California is the number one state in solar employment recording 86,414 jobs. Overly, this reflects a 14 percent rate of growth in 2017. Last but not least, California has tripled its wind-energy capacity since the passing of the first renewable energy goal. All through 2017, the incredible growth has created 12 wind manufacturing facilities in the state, producing $12.6 billion worth of investments.

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As a whole, the project creates an economic vantage. From Californiaâ€™s track records of clean energy, further investments in clean, renewable energy will continue to foster Californiaâ€™s economy. California should pursue this dream and other opportunities that come along the way, enabling it to move into higher levels of renewable energy and to also continue to prove that a clean economy is a strong healthy economy.

Works Cited https://www.vox.com/energy-and environment/2018/8/31/17799094/california-100-percentclean-energy-target-brown-de-leon https://www.energy.ca.gov/sb100 https://www.weforum.org/agenda/2017/05/clean-californiawhy-the-state-is-setting-renewable-energy-records https://www.energy.ca.gov/sites/default/files/2019-12/ renewable_ada.pdf

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

[POWER ECONOMICS]

CALIFORNIA LEADS THE UNITED STATES IN INFLATION

HOUSING COSTS LARGELY TO BLAME

he local inflation in the state of California is racing higher and quicker in the last decade and we could blame the price gasoline for that, but housing costs in the state are largely to blame. At the national level, the consumer prices are barely moving, and inflation is

chocking, reaching 1.8% in May last year. However, for the Californians, inflation is a different case. According to the U.S. Bureau of Labor Statistics, there are multiple Californian metropolitan areas that saw the biggest jump in the Consumer price index (CPI) in May. San Diego recorded the highest jump, with inflation

over the past year reaching 3.8%, followed by Los Angeles and the Orange Counties, where consumer prices rose 3.1%. Inland Empire counties of San Bernardino and Riverside, the inflation index swarmed up to reach 2.9%. The San Francisco Bay Area saw consumer prices reaching 4%.

“Housing has a huge weight in the index,” said Lynn Reaser, chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University in San Diego. “The problem is we are not building houses rapidly enough to accommodate the increase in demand.”

from the shape of the coastline to prop 13, all of which have attached a fairly expensive price tag to the Californian dream.

The Demand-Supply Chain

All of these are issues we need to illuminate as far as the housing prices are concerned. However, one thing we can all agree on is that over the past few decades, California hasn’t been building enough houses to keep up with the demand.

Part of these high inflation rates in the ma jor metros of California are heightened by the supply of housing in the county. To understand these statistics better, we have to understand the demand-supply chain. Most people are coming into the state from neighboring states, but, the supply side is torpefied. However, much as we want to blame housing costs for inflation, there are unique factors that have made the situation in California worsen,

Simply put, the state hasn’t built enough homes to keep up with the ever-growing demand. Is rent control a good or a bad thing? What about the effect of the NIMBYs on the supply chain?

Even when the construction was booming in the mid-2000s, new homes weren’t being built in the coastal cities where many people now work. While construction in places like the Inland Empire and the Central Valley crazed, places like L.A and San Francisco flatlined which explains the variations in the inflation rates.

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

Tight Labor Market The demand for housing stems from a growing economy. The fact that these metros experience high inflation rates is a reflection that the economic activities in these areas are robust, putting upward pressure on the prices. The mandated minimum-wage increases and the tight labor market are also putting pressure on the employers to pay higher wages too, to counter, they are passing at least some of that pressure along to the consumers. Californiaâ€™s economy in April last year saw a forward surge, as employers added 46,000 net jobs as the unemployment rates held steady at 4.3%. Wage growth has also been growing, with the average hourly earnings growing by 5.2% in April. The average hourly earnings in Los Angeles and the orange Counties rose 7% from a year earlier, reaching $31.60. In the Inland Empire, wages grew 6.2%, while in San Diego County, the wages were essentially flat. Rising prices of gasoline among other consumer prices rose. The index of the L.A-O.C gasoline pump prices rose at an 18% yearly

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pace in April, which is the biggest jump since November 2011, forcing drivers to pay more, largely due to the surging crude oil prices, and the new state gasoline tax. Overall, according to the data from the Bureau of Labor Statistics, the inflation rates in L.A and Orange Counties moderated since 2018, where the annual average in the consumer prices was 3.8%. There were several high-profile bills that died in 2019 among them is Senate Bill 50, which would have allowed at least four units of parcels in most single-family neighborhoods across the state. An increase in the CPI can have far-reaching consequences for the renters in rent-controlled buildings, as cities tend to peg allowably increased to the inflation measures. Works Cited https://www.latimes.com/business/la-fi-inflation-california20190613-story.html https://www.ocregister.com/2018/05/14/southern-californiainflation-at-a-10-year-high-blame-housing-gas-prices/ https://www.kqed.org/news/11666284/5-reasonscalifornias-housing-costs-are-so-high

C OV E R S T O RY

Harry C. Alford

arry C. Alford is the president, CEO and a co-founder of the National Black Chamber of Commerce, setting himself as the nation’s preeminent champion of African American business empowerment. Starting out with just a vision of what the African American community needs to fully seize their place in the economic mainstream, Harry in a span of a decade has built a global organization that has netted a place at the table in the White House and also at the top levels of the Corporate world in America. Mr. Alford has been responsible for opening doors of opportunity that have led billions of dollars in new businesses for black-owned businesses throughout the nation. He is a relentless and an energetic advocate, helping emerging entrepreneurs in Africa, south America and the rest of the Black Diaspora. For this and many other works like it, Harry has been nominated for several awards including the cultural Ambassador by the United States Department. Mr. Alford is a California Native who has left his mark at the highest levels of both the private and public domains. Harry first earned top honors as Company Commander in the Army’s Officer Candidate School class, after which he put his leadership skills to test, working in a series of key sales and executive positions at fortune 100 companies such as Proctor & Gamble, Johnson & Johnson and the Sara Lee Corporation. Working in the public sector, though not an easy call, Mr. Alford has been able to navigate this complex world leaving dramatic impression as the minority business development point person in Indiana Gov. Evan Bayh’s administration. In less than two years, Mr. Alford was able to increase the minority business participation at the State level by more than 500 percent. For that achievement and others, Harry has been named The US Department of Commerce’s Region 5 Minority Business Advocate of the year 1991. In October 1996, he was again honored by The African Americans for Corporate Responsibility of New York for his successes in minority business development. Mr. Alford is regularly called upon by the Congress to testify on various legislative initiatives related to small business development, e-commerce, health care, social security reforms and global trade issues.

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The NBCC Story Over the past, there have been numerous attempts to establish a National Black Chamber of Commerce. The forerunner to the NBCC was the National Negro Business League which was pioneered by the visionary Booker T. Washington and funded by Andrew Carnegie. The league comprised of a coalition of 40 southern towns with business associations serving the needs of segregated establishments in the Black Neighborhoods. Beginning in the 1950s, attempts to create a national network of chambers dedicated to the needs of Black owned businesses failed one after the other. By the 1920s, The National Negro Business League had become dormant, only re-establishing again in 1991 with only 16 chapters. While working as the Deputy Commissioner for Minority Business Development for the state of Indiana, Mr. Alford

realized that every ethnic segment of America had a national business association representing its economic interests and promoting a â€œfair playâ€? for its constituents, but African Americans were not. Harry noticed that the great Civil Rights Struggle had succeeded and that America from the African American perspective was at a crossroads. At this point, Harry began studying the writing of economic advocated like Booker T. Washington, Frederick Douglas, Theodore Cross and others. He dedicated himself to making a National Black Chamber of Commerce a reality. The first step towards making this possible would be to establish a local chamber that would serve as a prototype for the newcomers. the journey began, starting as the Hoosier Minority Chamber of Commerce, and was well received by the African American business community but faced severe resistance from the mainstream groups and traditional Black circles such as the Indianapolis Chamber of Commerce to see if there was a legal mans to prevent such an organization from forming. At its inception, Indianapolis was one of the most segregated cities in the United States, but with the Hoosier Minority Chamber of Commerce, Indianapolis became a model for Black business development. Representation was visible and tangible across all levels

of construction, service and products. Today, Indianapolis is considered one of the most diverse cities in the nation. In 1993, Harry and Kay incorporated the National Black Chamber of Commerce, Inc. in Washington. From the original 14 chapters, the NBCC has grown to over 200 chapters located in 40 states and 50 nations. It is the largest Black business association in the world. NBCC is driven by a formal Board of Directors with a strategic plan and an ongoing Business Agenda. There are approximately 151 active chapters in the united states, 40 of them are in the developmental stage and 50 still on the off shore. Individual chapters govern themselves and are merely a federation of self-governing, dues paying entities. Works Cited https://www.desmogblog.com/harryc-alford https://www.nationalbcc.org/about-us/ management-bios https://www.bloomberg.com/ graphics/2017-alford-national-blackchamber-commerce/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

[POWER ECONOMICS]

AT PAR WITH THE 60S:

WE EXPLAIN WHY CALIFORNIA’S UNEMPLOYMENT RATE IS AT ITS LOWEST IT HAS BEEN SINCE 1969

ationally, the unemployment rate plunged to 3.7 percent in September 2018, the lowest since 1969. In August, the rates were recorded at 3.9 percent, according to data from the Labor Department. September marked the third consecutive month of an unemployment

rate below 4 percent. Fast forward to 2019, in April, the United States economy added a total of 263,000 jobs, registering 103 straight months of job gains, showing no signs of stalling. For more than a year now, the unemployment rate in the U.S. has been at or below 4 percent.

Hiring was strong across most sectors with business services recording the highest additions (76,000 jobs) followed by the construction industry (33,000 jobs), and finally health care (27,000 jobs). The government on its part has added 12,500 jobs in April, which included some boost from the Census Bureau.

affected areas of the East Coast during the employment surveys. Some other sectors, for instance, the leisure and hospitality sector which saw a drop of 17,000 jobs, BLS noting that storms may have been a big influence on this drop. In August, the hospitality sector saw an increase of 21,000 jobs.

California’s tremendous growth since the recession “There is no denying this is a strong jobs report,” said Joel Prakken, chief U.S. economist at Macroeconomic Advisers. “The only number you can point to that looks disappointing is that manufacturing employment has stalled.” The Bureau noted that Hurrican Florence

The Golden State is one of the counties that has seen its unemployment rate plummet over the last 2 years. The employers in the state added a net of 23,600 jobs in the months of October, for a total of 17.56 million, and a yearover-year growth rate of 1.8% U.S. payrolls grew

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

by 1.4 percent year-over-year. This tremendous growth indicates a very healthy economy, showing the resiliency by the labor market despite the headwinds from the trade tensions between the United States and China and the global manufacturing downturn. Ever since the great recession, the state has added more than 3.37 million payroll jobs, also recording a 116-monthly gain, which surpassed the long expansion of the 1960s. This has accounted for more than 15% of the nation’s job over the same period. Overly, the state’s economy appears to be contradicting the national trend of moderate growth this year. In the month of January last year, payrolls in the state rose year-over-year by 1.5% compared to the previous month’s 1.8% growth. Over the same period, the U.S. nonfarm job growth slowed from 1.9% to 1.4%. In California, the sectors adding more jobs to the economy over the year were education and health services (90,800 jobs); professional and business services (62,600 jobs); leisure and hospitality (48,000 jobs) and government (36,700 jobs). Contrary to the national level, California’s expansion seemed broad-based with every sector experiencing some sort of growth expect the mining and logging sectors which remained relatively flat. Other growing sectors included

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construction (34,400 jobs); Manufacturing (11,600 jobs); financial activities (13,500 jobs); trade, transportation and utilities (7,100 jobs); other services (1,300 jobs); and information (1,200 jobs). While the job growth rate is a good indicator of economic expansion, economists have to also take into account the size of the labor force. California labor market has grown substantially, and October’s addition of 40,800 more workers and job seekers could indicate that people are finally becoming confident enough to join the labor force to find jobs. Nonetheless, the longer-term trend seems less encouraging, the labor force peaked in February 2019, year-over-year, it has shrunk by 57,400 workers. However, it is too early to speculate. But generally, the high costs of living in the state and the pricier housing costs constrain the growth of the labor force.

Works Cited https://www.latimes.com/business/story/2019-11-15/ californias-unemployment-rate-record-low https://www.pbs.org/newshour/economy/making-sense/ the-unemployment-rate-is-the-lowest-its-been-since-1969heres-why https://www.washingtonpost.com/business/2019/05/03/ us-economy-added-jobs-april-unemployment-fell-percentlowest-since/

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[POWER ECONOMICS]

CALFORNIA SENATE ADVANCES A BILL TO CAP THE CONSUMER

LOAN INTEREST RATES AT 36 PERCENTAGE POINTS

he California Senate advanced legislation that would cap the interest rates for the consumer’s loans, a measure that the proponents say is designed to blunt the predatory lending practices. The bills cap the consumer loan interest rates at 36 percentage points above the main interest rates set by the federal reserve, which is currently at around 2 percent. The consumer groups in the state say that some loan companies charge interest rates that are as high as 225%. This legislation applies to loans between $2,500 and $9,999 and it would also require the lenders to offer borrowers a credit education summary.

Predatory Lending in California

many other individuals for the crimes that relate to predatory lending.

Of late, the idea of predatory lending has drawn a lot of attention, with people led to believe that it involves large institutions such as banks and subprime lenders who exploit the vulnerable and struggling homebuyers and homeowners in distressed neighborhoods.

According to the Federal Deposit Insurance Corporation (FDIC), predatory lending involves;

In California, the state, and local prosecutors are shifting the norm and focusing more on the small lenders, real estate brokers, mortgage brokers, appraisers and so

• I mposing unfair and abusive loan terms on borrowers, mostly through aggressive sales tactics. • Taking advantage of the borrower’s lack of understanding of the complicated transactions. • Outright deception. • Lending falls under

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

predatory lending classification and crime in the state when the lender managers the loan transaction to extract the maximum value for itself without regarding the borrower’s ability to repay the loan. For most predatory lending schemes; • They tend to target households based on illegal, discriminatory practices, for example, race, ethnicity, age, and gender which are unrelated to creditworthiness. • These loans are unjustifiable and unreasonable and often have complicated loan terms that maximize the lender’s potential earning capacity at the expense of the borrower.

Targeting borrowers on illegal discriminatory practices This is something common with most predatory loans. These lenders have a variety of public information that they use to target their potential customers. They prey

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uneducated, unsophisticated individuals who lack the ability to scrutinize the involved paperwork and the loan terms. It is also not uncommon to find these lenders preying on households that have limited incomes but significant equity, for instance, homes that are owned by the elderly. To reach their targets, these lenders will engage in direct telephone calls, door-to-door solicitation, direct mailing and TV commercials. Well, in and of themselves, these channels are not wrong, in fact, they are valuable marketing strategies that most people use. However, these activities become illegal when the lender engages in fraudulent behavior by directing these techniques to vulnerable homeowners in an effort to make money rather than to meet the needs of the customers. Another common thing you will find with these predatory lenders is that they fail to explain the loan terms, by omitting some references to a balloon payment or even discouraging the borrower from exploring a lower cost option are some of the tactics that turn an otherwise legal transaction into an illegal one. Combating Predatory Lenders

The Assembly Bill 539 focuses on ending a decade long practice of charging borrowers taking out loans between $2,500 and $10,000 with an interest that exceeds 200 percent. Nationally, the rate will be capped at a recommended 36 percent, a move that is considered a compromise between the lenders and consumer advocates. “Many Californians living paycheck to paycheck are exploited by predatory lending practices each year,” Newsom said. “Defaulting on high-cost, high-interest rate installment loans push families further into poverty instead of pulling them out. These families deserve better, and this industry must be held to account.” “Predatory lending has been an issue in our state for a very long time,” Assemblywoman Monique Limón said this summer during a rally at the Capitol for AB 539. “This piece of legislation is really about tackling one of the hardest issues that this state is trying to tackle. Which is how we help those who are in need who are looking at financial services and products as a way to get out of poverty? One in three individuals who take out this product go into debt and default.” According to Limón, this new

law is nowhere near perfect. A borrower taking out a $2,500 loan, with a 36 percent interest could still face a $4,122.36 total bill on a 36-month repayment plan, this is according to the Safe Affordable Credit Coalition which is the organization behind the bill. One more thing to note is that the bill only covers the loan product itself, and not the ancillary costs, for instance, the credit insurance that is often defaulted into the service. These extra costs can increase borrowing by more than a third, as they are not regulated by this new law. The new law comes at a very good time when people are increasingly turning to mid-sized installment loans when they find themselves in a financial crunch and have a few other options. By signing the law, California became one of the last states to regulate interest rates on these growing loans.

argued that rate capping could put some lenders out of business and also cut off loan options for the vulnerable Californians. “I would suggest that we not feign naivete about credit,” Democratic Sen. Holly Mitchell said in response to critics. “To assert or assume that you can earn credit by being taken advantage of someone who is going to charge you 200% on a $2,500 loan is just not the case. Here’s what I think, predatory lending is driven by greed and is no way fulfilling any need. With this bill, lenders will not be able to victimize unwitting borrowers, who are often the people of color.

Works Cited https://www.sacbee.com/news/politics-government/ capitol-alert/article235966792.html https://www.shouselaw.com/predatory-lending.html https://www.kpbs.org/news/2019/sep/13/californiaadvances-bill-cap-consumer-loan-interes/

Critics of this bill including the Black and Hispanic chambers of commerce

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

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[POWER LENDING]

MORTGAGE PREDICTIONS: EXPERTS PREDICT THAT LOW INTEREST RATES WILL LAST

ast year we experienced the longest economic expansion with the job market proving to be more resilient than ever before. A strong job market and low mortgage rates should be able to sustain the housing market through 2020. However, the problem will be finding enough homes for buyers. If you are looking to buy a new home or refinance your current home, this might be the year to do all that, todayâ€™s mortgage rates are expected to continue all through 2020. The average 30-year fixed mortgage rate started 2019 at 4.68 percent and steadily declined before closing out the year at 3.93 percent. In 2020, we should not expect anything dramatic as far as rate fluctuations are concerned. The rate will be mostly stable, not straying too much higher

or lower from the 4 percent mark. The government-sponsored mortgage company Freddie Mac said that the rate for the 30-year fixed mortgage averaged 3.72 percent in the first week of Q1 2020. Both Freddie Mac and Realtor.com predict that the mortgage rates will rise, but moderately in the year. Freddie Mac predicts that the rates will average at 3.8 percent while Realtor.com predicts an average of 3.9 percent. The drop in the mortgage rate in 2019 marked a dramatic turnaround from the prediction in 2018, where the mortgage rates briefly reached 5 percent and the Federal Reserve signaled two interest rate increases were on the way. Rather, the escalating trade wars hit the investorâ€™s confidence in the market, the Fed cut rates and investors felt

the need to secure mortgage debt so bad that they were willing to accept lower yields, which ultimately drove the mortgage rates down. For the potential homebuyers, this drop in the mortgage rates was a balm on their already constrained budgets. Lower rates would mean that they would be able to take out larger loans for the same monthly payments, however, economists say that homebuyers should prepare for a tough housing market in 2020, shaping where and how people live and spend. After a drop in the mortgage rates, home appreciation accelerated, ending 13 months

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

of slowing home price growth, according to the data by the S&P CoreLogic Case-Shiller U.S. National Home Price Index, which basically measures the home prices. The rapid rise in home prices, especially in the coastal markets where home prices have grown more quickly than the incomes is pressuring homeowners and renters alike, where most of them are opting to move out to less expensive and affordable markets, for instance, Texas. “Homebuyers are increasingly not only looking at suburban environments near large metropolitan areas but also considering options across

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state lines,” said Realtor.com economist George Ratiu in his forecast. “Cities in Arizona, Nevada, and Texas will continue to benefit from shoppers looking for more affordable alternatives to California.”

expenses continues rising,

Housing costs will continue to chunk up a large portion of the worker’s income, forcing most of them to cut back on the discretionary spending for restaurant meals, entertainment and a host of other consumer products, this could have a ripple effect on the economy, as consumer spending accounts for about 70 percent of the United States economic activity.

volatility, can be expected to

“As the housing share of

consumers will likely trim back on non-housing spending,” said Ratiu. “A slowdown in consumer spending, coupled with rising global uncertainty and market lead companies to contain costs and trim employment goals.”

Works Cited https://www.houstonchronicle. com/business/real-estate/article/ Low-mortgage-rates-forecastfor-2020-14953168.php https://www.washingtonpost.com/ business/2020/01/06/experts-predictwhat-housing-market-will-bring/

[POWER LENDING]

HOUSING AND ECONOMIC RESEARCH: MORE

HOMEBUYING IN 2020, FREDDIE MAC PREDICTS

etâ€™s recap the 2019 housing market; it was one full of surprises, a market dominated by low rates, high demand, and limited housing supply, particularly on the lower-priced end of the housing market spectrum. Will 2020 remain the same? Over a year ago, the mortgage rates nearly hit 5 percent levels, something only experienced during the start of the year, now as we prepare to enter a new decade, the mortgage rate is significantly lower than that comfortably sitting at the 3-4 percentage point bracket. The Government-sponsored enterprise, Freddie Mac tells people to be hopeful and should not be worried about mortgage rates rising. The

rates according to Freddie Mac should stay low for the rest of the year and well beyond that. In its newest housing market forecast, the companyâ€™s economic housing research group states that they expect mortgage rates to remain around 3.8 percent for the rest of 2019 and the rates are expected to stay on that level for all 2020 and 2021.

A Good Year to Refinance Given the recent plunge in the mortgage rates, we should expect a rise in refinance originations in the coming quarters. Moving forward, a combination of low mortgage rates, a tight supply, stronger consumer confidence are likely to offset declining business sentiment, staging a continued

improvement in the housing market heading into the fall. We cannot overlook the effects of trade tensions. It will have a lasting impact on the housing market that will continue to be felt in early 2020. Without the short term effects of the tax cuts and the fiscal stimulus experienced in 2018, Freddie Mac predicted a decelerating growth to 1.8 percent in 2020. Another forecast from the Mortgage Bankers Association show that 2019 was a good year to refinance, in fact, the

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

According to Freddie Mac, the good times should continue rolling in, with the latest forecast showing that there is an expected $834 Billion in refinance originations in the year 2020.

Rates are not guaranteed to drop One thing to keep in mind is that Freddie Macâ€™s predictions could be wrong. The reverse could happen where the mortgage rates could increase significantly. And there are three reasons to make this phenomenon a reality. First, the economy may be way much better than expected, if thatâ€™s the case, the Fed may signal out that it is a good and healthy economy with no prospects of a further rate cut. The second likely case is that consumer inflation could unexpectedly creep higher, forcing the Fed to slow the economy. The third likely scenario is the government borrowing may get out hand, provoking the bond investors to demand higher interest rates in order to hold on to very large amounts of the U.S. Treasury bonds.

best year for the refis since 2016, and the best year to

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purchase mortgages since 2006.

Given that the country is very much intertwined with the global economy, a recovery in one country is nothing. Given that the rates are already at their lowest predictions given

by Freddie Mac, the opportunity for the rates to decline further is close to impossible, which is the least that could be said of rates rising.

going by Freddie Macâ€™s predictions, they will stay that way all through 2020. However, who can guarantee tomorrow? If you are seeing an

Buy Now or Wait?

opportunity, take it now, do not hesitate.

The opportunity at hand I quite remarkable, and I suggest people buying or refinancing. Nonetheless, is this the best time? Most consumers are wondering if this is the opportune moment to lock in the rate and purchase soon or wait a little bit for the rates to drop even further. But the answer is quite obvious. Consider that the mortgage rates are at their lowest point they have been in nearly 40 years, why not take advantage of the opportunity right now? If you are in a position to buy or even refinance, these rates make a lot of sense, take that opportunity right now while we are still at the historic low, waiting further could lead to wasted opportunities. Now is a good time to be in the market looking for a home or refinancing, rates have never been this low and 38

Works Cited https://themortgagereports.com/55272/freddie-macpredicts-mortgage-rates-in-the-3s-until-2020 http://www.freddiemac.com/research/forecast/20190828_ low_mortgage_rates_strong_labor_markets.page? https://www.housingwire.com/articles/freddie-mac-hereswhat-to-expect-from-the-housing-market-in-2020/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

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[POWER TECHNOLOGY]

BIG TECH COMPANIES IN SILICON VALLEY TO INJECT BILLIONS

TO EASE UP THE HOUSING SITUATION. WILL IT HELP?

he housing market is unsympathetic gashing across levels of society and it’s worse in states like California. Undoubtedly, the San Francisco Bay Area may be the engine of the country’s economy, but the skyrocketing housing prices and other consumer prices are leaving thousands of people homeless. The situation has attracted various concerned parties including the big tech companies who have injected $5 Billion to fuel the campaign for affordable housing in the state, but is it enough? Apple becomes the latest company to inject $2.5 billion into affordable housing initiatives around the silicon valley. Other companies that have taken a pledge include Google and Facebook each pledging $1 billion each in June 40

and October, respectively and Microsoft kicked in pledging a $500 million check in January last year. Nonetheless, Apple’s commitment and the putative good deed drove somewhat mixed reactions from the public, and weighing in from the campaign trail, Senator Bernie Sanders had this to say; “Apple is the latest tech industry tax evader that has portrayed its entry into the housing business as an act of philanthropic altruism,” Sanders, who is seeking the Democratic nomination for president, said in a statement. “We cannot rely on corporate tax evaders to sol ve California’s housing crisis.” Like it’s, Apple’s housing pledge comes from the sub-market rate loans and the land transfers THE POWER IS NOW MAGAZINE | FEBRUARY 2020

it expects will turn in a modest profit for the company. But the question I think most people are willing to turn a blind eye on is the fact that the combined $5 billion in land and financing so far pledged by these tech companies will actually be enough to address the core issue of the housing crisis facing the people of California county, and in particular, people living in the West Coast cities. Even though California boasts of its huge contribution to the country’s GDP, people in the various states are suffering, it gets even worse in Silicon Valley where housing costs are so high that most people end up paying almost half their incomes in rent. The average cost of a house in Silicon Valley is well over $1 million, and the average apartment rent is nearly $3,000 a month. The move by Apple and other tech companies isn’t avantgarde. Should we applaud it, yes, but it’s not something to marvel upon? Even in a more contemporary period, some actions like providing down payments and assistance programs to low-to-moderate

homebuyers have been pursued by universities and a host of health care institutions. But the fact that these companies are stepping into combat housing crisis in Silicon Valley is so encouraging and I would hope that the government does something, to speed up processes that will bring ease to the already existing tension in the state. Apple’s plan is not solely focused only on its staff, the company is putting $1 billion into an affordable housing investment fund for California and the same amount into a mortgage assistance fund for the first time buyers, which the company is optimistic will help teachers, veterans and service workers. “The giving back here should be seen as necessary and required,” said Sunia Zaterman of the Council of Large Public Housing Authorities, “because these corporations are benefiting from the workforce, from the transportation systems, health systems, that are already in their communities.” The company is also dedicating $300 million worth

of its land for affordable housing. In addition, the company will donate $150 million to an affordable housing fund with the local nonprofit Housing Trust Silicon Valley and give $50 million to address homelessness. This announcement comes as Silicon Valley communities put pressure on the tech companies who have notoriously expanded in the Bay Area but doing nothing for the people they displace and who cannot afford the skyrocketing housing prices. “Before the world knew the name Silicon Valley, and long before we carried technology in our pockets, Apple called this region home, and we feel a profound civic responsibility to ensure it remains a vibrant place where people can live, have a family and contribute to the community,” said Tim Cook, Apple’s CEO. “Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”

Works Cited https://www.marketplace. org/2019/11/04/apple-pledges-2-5billion-to-ease-californias-housingcrisis/ https://bitterrootmag.com/2019/11/22/ big-techs-throwing-5-billion-ataffordable-housing-will-it-help/ https://www.cnbc.com/2019/11/04/ apple-to-give-2point5-billion-foraffordable-housing-in-silicon-valley. html

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[POWER TECHNOLOGY]

THE RISE OF IBUYER: BUT WE ARE NOT SCARED SAYS BROKERS

an you compete with technology? Ever since the dawn of mankind, our lives revolve around curiosity, driven by the urge to know whatâ€™s next. The 21st century has seen the rise of technological forces that led us to our knees. This power cut across all industries and real estate is no exception. Professionals in this industry are well aware of the technological disruptions in the industry. The most successful real estate professionals are embracing the power of technology, and incorporating it into their everyday practices to increase efficiency and draw in more clients but the rise of the iBuying platforms has led a new wave of trepidation for realtors.

What are iBuyers? Lately, there is a lot of hype around the iBuyer space, that most people are left in limbo, without getting the full perspective of this new technology. iBuyers are 44

simply real estate companies. Thatâ€™s something you need to know right from the word go, these companies buy and sell properties through technology. They emerged on the scene after sensing the potential in this industry. The fact is, real estate transactions tend to be so complicated, thus calling the need for a more transparent, quick and open solution. Companies like Opendoor, Offerpad, Knock, RedfinNow and Zillow Offers have decided to come in and simplify this process. These companies use advanced algorithms to determine home values and make instant cash offers. In most cases, iBuyers represent a simpler and more convenient alternative to the wonted home sales. Through the iBuyer model, real estate agents are quickly learning the benefits and challenges of the industry both on the sell-side and the buy-side. These companies take pride in offering convenient, seamless THE POWER IS NOW MAGAZINE | FEBRUARY 2020

transactions that go along way to improve the consumers’ experiences buying and selling homes. Theoretically, iBuyers are effectively cutting the need for a real estate agent, since the companies are buying directly from the homeowners and selling them directly to the homebuyers. There is a significant difference between flippers and iBuyers, in that the latter don’t seek to buy distressed properties or the properties

that require a lot of work. Rather, iBuyers are targeting homes that are already in perfect shape and only need minimal work to be done on them. One other thing that iBuyer platforms are focusing on is that they want to unload properties quickly so their business models are centered around high volume but lower margins. “For decades, real estate agents only had one solution listing homes for sale,” said Tyler Hixson, director of real estate partnerships and strategy for San Franciscobased iBuyer Opendoor. “Now, sellers have tons of unique situations and life circumstances, and one solution will never work to sol ve a complex problem in any facet of life.”

iBuyers Vs Real Estate Agents The iBuyer “changes the way you do business as technology has done … to everything in the last 30 years,” said Joel Singer, CEO of the state Realtor association for the past three decades. “But it doesn’t change it in a way that should generate fear. It should generate a sense of opportunity.” So there’s really no battle between iBuyers and the real estate agents. Even in the advent of this new technology, where these big companies are paying cash directly to the homeowners and later reselling these homes has sent shockwaves in the industry, WWW.THEPINMAGAZINE.COM

there is no need to be worried. The fact is, the traditional model of selling homes in America has survived decades of disruptions in technical advancement many thought they would eliminate the broker. In fact, Singer cites that 91 percent of the home sellers this year used an agent. But why should we be so confident? It is simple, the iBuyer route is not meant for every home seller. Basically, if you are a follower of real estate developments, you will notice that over the last one year, the iBuyers have received tremendous publicity due to their “step out of the box” concept that they are largely advocating for. If you look closely at their working model, you will realize that all that the iBuyer platforms are doing is that they are connecting a relatively small group of large, qualified investors to prospective home sellers for a service fee that is relatively higher than what the traditional broker would sell. I like the iBuyer model simply because it is a simplified and expedited offer and a “contract to close ‘’ process, which is very different from the standard thirty to forty day escrow period. Through the iBuyers, that transaction allows a seller to move on to their next home, quickly. Good for some sellers, but not all sellers. While some sellers don’t like to be kept waiting, you will agree that the largest percentage are the sellers who l

must decide whether speed and convenience trump potential increase of the net returns on the sale of the home. In this economic boom, trust me that most homeowners want to gain the maximum benefits at the closing table and are patient to wait for a ready, willing and qualified buyer.

Quit being Anxious Another thing you have to realize is that the industry itself has evolved and adapted quite well. About 80 percent of the agents say that they are now completely or almost completely mobile. Almost 90 percent use social media in their business models and an average agent spends about $2,000 a year on technology. What does this tell you, iBuyers have a slight chance of beating a well cohesive industry. Again, the nature of home sales is more personal and complex than any other transaction you will find in the online space. “You cannot automate that (homebuying) experience,” Singer said. What you have to realize is that buying and selling a home will remain a very painful process. Statistics show that about 25 percent of the homebuyers complain about the process being too costly, while about a fifth say that the process is long, inefficient and a tough battle (Google Consumer Poll). “What should be an incredibly joyous thing, buying a new house, buying your first house, … is often quite nerve-wracking, quite

difficult, (with) a lot of uncertainty and stress,” Singer said. “Until we can figure out how to deal with that, we make oursel ves as an industry ripe for certain amounts of change.” But even with the rise of the iBuyers, the industry remains to be full of potential disruptors, among them being discount brokers, flat-fee brokers, and other brokerages that let agents keep their commissions and brokerages with their own exclusive listing services. All these are challenges that agents have to keep up with. In Phoenix, about 40 percent of the home sellers are getting offers from the iBuyers, but many of them opt for a traditional agent. That doesn’t mean that there is no place for iBuyers, there is. For sellers willing to take less for their homes for the added “convenience price” or certainly sellers willing to take cash sales. Singer estimates that iBuyers will handle 10-15 percent of all homes sales by the end of the next decade. But they are so unlikely to take over. “We’re going to be in a world where the biggest competition today and your biggest competition in the foreseeable future really aren’t these outsiders. … Your major competition is each other.”

Works Cited https://www.ocregister.com/2019/09/26/agentshave-little-to-fear-from-ibuyers-realtor-chiefsays/ https://chicagoagentmagazine.com/2019/10/28/ dont-feat-the-ibuyer-how-to-compete-againstand-cooperate-with-a-growing-trend/ https://johngiffen.com/dont-let-those-ibuyersscare-you/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

WHAT TO EXPECT FROM WHAT TO EXPECT FROM THE RICHMOND HOUSING MARKET THE RICHMOND HOUSING MARKET

JOE FISHER The 2019 housing market all across the united states saw the overall positive economic activity, although it seemed to slow down in growth in the second and third quarters of the year. The gross domestic product in the country saw a 4.1 percent annualized gain in the first quarter, and a 2 and 2.1 percent gains in the second and third quarters of 2019. The year 2020 will be a year marked by the same mild growth as 2019. Realtor.com forecasts a 1.7 percent gain, which will likely be due to the continuing rise in housing costs, forcing

consumer spending to wane when it comes to non-housing spending.

Overall Market Predictions Generally speaking, 2020 is expected to be a tepid year for the U.S. housing market. The existing home sales are expected to drop by 1.8 percent on average, according to the predictions by Realtor.com, thanks to being an uptick in the new construction and a lack of affordable inventory in so many markets. On average, the home prices are expected to continue to rise and the U.S. home value

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

forecast to grow by 0.8 percent this year. However, the predictions forecast a much lower than the gains we’ve seen in recent years. Over the past five years, the average U.S. home has seen its value grow by more than 25 percent, and so far, it is fair to say that a gain of less than 1 percent in 2020 would be a significant slowdown.

Richmond Housing Market predictions The recent forecast for the Richmond, VA housing market suggests that the home prices might rise more slowly in the coming months compared to the previous years. The real estate market in Richmond was a contested one in 2019, which partly was due to the limited supply of inventory and steady demand. This trend will most likely spread in the coming quarters of 2020.

Houses will be moving more quickly One way to show the competitiveness nature of a housing market is by looking at how quickly a typical home sells in the area. Richmond, Virginia houses have been moving very fast over the last few years, a trend that will continue through 2020. According to Redfin, homes sold in May 2019 spent an average of just 11 days on the market before going under contract. nationwide, homes listed for sale spent a median of 36 days on the market. This shows how competitive the Richmond market is. It is a hot and active market and that trend is not about to stop anytime soon. In fact, Richmond has been named one of the fastest metropolitan-sized housing markets. The summer of 2019 saw a housing war where buyers fiercely competed for the limited inventory. As a result, it was not uncommon to find listing agents reporting multiple-offer scenarios, as well as offers above the ask-price.

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Starter homes are hard to find Starter homes in Richmond are hard to come by. To define starter homes in simple language, these are homes that are priced at or below $250,000, which is a market dominated by the first time home buyers, making it a very important segment of the market. These properties are moving very quickly which is a trend that will be extrapolated to 2020. “Houses under $250,000 aren’t spending any time on the market. There is so little firsttime homebuyer inventory. That’s where we’re seeing many examples of multiple offers.” Laura Lafayette, CEO of Richmond Association of Realtor.

The Price Forecast Forecasts suggest that home price growth might be slowing in the area. It’s no surprise since this is a trend that has been witnessed in multiple cities across the country as of midsummer 2019. Zillow’s most recent home-price forecast for the Richmond housing market predicts smaller gains in the months ahead. By estimation, the

house value in the area could rise more slowly between Q2 2019 and Q1 2020. The company back in Q2 2019 stated that “Richmond home values have gone up 6.0% over the past year and Zillow predicts they will rise 0.9% within the next year.” This chart from Zillow shows the median home value for Richmond over the past 10 years. From the chart, it is clear that house prices started to climb in post-recession, late 2012. The prices rose even further between the years 2017 and 2018 then slowed a bit, and the prediction for 2020 can be seen from this chart. However, let’s try to be realistic, given the current situation, not just in Richmond, but everywhere, there is a supply tension and it is possible that prices could climb at a faster rate than Zillow predicts. Works Cited http://www.metrodepth.com/richmond-housing-markethot-in-2019/ https://www.mashvisor.com/blog/us-housing-marketforecast-2020-takeaways/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

THE FURUTE OF REAL ESTATE

EMBRACING DISRUPTIVE IN 2020 THE FURUTE OFTECHNOLOGIES REAL ESTATE EMBRACING DISRUPTIVE TECHNOLOGIES IN 2020

ANDRE JACKSON

y now, it’s quite clear that real estate is not about ‘location, location, location.’ technology has changed that fazed narrative into a new mantra, ‘location, experience, and analytics.’ While historically the real estate industry has trailed other industries when it comes to the adoption of new technologies, and the use of data and analytics, that trend has changed over the past few years. Now we are seeing numerous companies utilizing technologies such as artificial intelligence (AI), and the Internet of Things (IoT), which ultimately has become an imperative part of the commercial real estate industry. While we cannot say that there is a 100 percent transition from the traditional real estate industry into the technology-based industry, managing the risks, such as cyber risks continue to be at

the forefront and the center for real estate executives as they continue to make decisions about the digital tenant experience and to make this transition a smooth one. One way to better understand this new concept of ‘location, experience, analytics’ is through the application of AI to modernize the leasing process. The conventional way would follow a manual and laborious process which often results in cost overruns, speed and accuracy issues and a higher chance of fraud. By automating the process, and many others like it with the power of AI, administration, accounting, and analysis can have a very big influence on the overall tenant satisfaction. Though on a very small scale, companies are adopting the use of robotic and cognitive technology solutions to build up lease administration systems that are very flexible and scalable. One proven advantage of this is that companies can even look for solutions that

connect different leases, properties, and equipment with building sensors that enable smarter decision making. This is something we should be expecting to pick up all through 2020, as more companies realize the benefits of the automated process.

Data Ownership and Privacy Concerns With technology comes the question I like to avoid, “is my data safe?” I believe that no one can guarantee that machines have been proven to fail. Data and the ability to access it is a question that technology will seek to answer in 2020. While it is a challenge presenting many questions and challenges all at once, this represents a tremendous opportunity for the commercial real estate stakeholders, to enhance operations and improve the tenant experience. Deloitte 2020 Commercial Real Estate Outlook surveyed 750

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owners, operators and investors in 10 different countries in an attempt to gauge the top tech trends and 40% of the respondents are already gathering the IoT sensor data, of that 40% they are using it to primarily harness data and insights for decision making (75%) sharing insights with the tenants (54%) and sharing that information with investors (50%). The survey also found out that when tenant experience and related technological investment is put at the table, 64% of the executives surveyed said that they increased their investments over the past 18 months. 78% of the respondents expect that their organizations to at least hold or increase these commitments over the next 18 months. No one wants their data to be handled carelessly, which means the industry needs to focus on tenant experience through the capturing of data and proper use of analytics and emerging technologies anchored by the rapid change in the expectations of the tenants and end-users.

Smart Buildings Of the surveyed respondents, 75% believe in smart buildings and say that they will be the new norm in the next five years. You have to understand that these new technologies are no longer a ‘pie in the sky’ but rather they represent enormous real estate opportunities that companies need to start thinking about and take advantage of today. “Changing end-user expectations are requiring companies to adjust their mindsets and look at real estate as-a-service, which means creating an augmented and memorable experience with physical spaces and moving away from a mere functional use,” Jim Berry, partner at Deloitte & Touche LLP. “Overall, real estate has lagged other industries in making investments in technology. However, we are seeing more of a focus on and a sustained increase in these investments, which we believe is driven by the rapid change in needs and expectations of tenants and endusers,” said Berry.

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Fractional Property Platforms These are expected to become increasingly popular with real estate investors in 2020. Real Estate Fractional Ownership (REFO) is a model that makes real estate more accessible by lowering the minimum investment amount committed by each investor. Regardless of investors’ net worth, this model is making the average joe benefit from real estate’s potential for generating consistent cash flows and long term capital appreciation. REFO industry is a collective of real estate crowdfunding, peer to peer lending and security token offering, and they normally identify themselves as real estate investment, based on their expertise and preference. While the model allows more people to gain a fraction of real estate ownership, in some instances, it can become quite difficult to evaluate great quantities of real estate investment, and often calls for investors’ due diligence. Nonetheless, it is a model that has been widely accepted and will only continue to attract masses in 2020.

Works Cited https://medium.com/denzity/how-real-estate-fractionalownership-platforms-work-4cb23dfb7127 https://www2.deloitte.com/us/en/pages/real-estate/ articles/commercial-real-estate-industry-outlook.html

LA HABRA LA HABRA

HOUSING MARKET TRENDS IN 2020 HOUSING MARKET TRENDS IN 2020 BRIANA FRAZIER The California housing market kicked off 2019 with a weak start, but throughout the year, itâ€™s been improving according to a recent report by CAR. With the mortgage interest rates down, the market predictions for 2020 are brighter than most people would anticipate. On the contrary, the 2020 US housing market read very different figures, pointing to a slowdown, which is only starting to reflect on the state housing market. Experts predict that several economic factors might cool Californiaâ€™s booming real estate market even further. With that out in the open, what do these changes reflect on individual counties and metro areas in California? To answer that, we look at the La Habra housing market and the trends we should be expecting this year.

in the state of California. It has a population of 62,183 people and 13 constituent neighborhoods. Housing costs in La Habra are among the highest in the nation, even though real estate in this city is nowhere near comparable with the most expensive communities in the state. Unlike other communities where there is a fine line between white-collar jobs and blue-collar jobs, La Habra is neither predominantly one nor the other. Rather, it is constituted of a mixed workforce of both the white

and the blue-collar jobs. On the overall, La Habra is a city of sales and office workers, service providers and professionals. On the downside, the average commuter hours to work is quite long. People spend about 30.50 minutes each day getting to work which is higher than the national average. The percentage of people living in La Habra who are collegeeducated is higher than the national average of 21.84%: 26.84% of the adults in La Habra have at least a college degree.

La Habra is a larger medium-sized city located

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Average Rent in La Habra

source: YardiMatrix The per capita income in La Habra in 2010 was $28,846 which is middle-income relative to California, and upper-middle-income relative to the rest of the U.S. This equates to an annual income of $115,384 for a family of four. However, the La Habra housing market is a mix of both rich and poor people as well.

The average rent for an apartment in La Habra is $1,743, which represents a 5% increase compared to the previous year, where the average rent was $1,654. The average size for a La Habra apartment is 806 square feet, however, this number varies greatly depending on unit type, with the cheap and luxury alternatives for houses and apartments alike. The studio apartments are the smallest and the most affordable, 1-bedroom apartments are closer to the average, while a 2-bedroom apartment and 3-bedroom apartment offer more generous square footage.

La Habra is an extremely ethnically-diverse city. People who live in La Habra pride themselves on being in a home that belongs to a variety of racial and ethnic groups. The people of Hispanic or Latino origin are the most prevalent group in La Habra, accounting for 59.67% of the cityâ€™s residents. La Habra also has a high percentage of its population that was born in another country:28.51%.

La Habra Home Prices and Values According to Zillow.com the median home value in La Habra is $593,546. The prices have gone up 1.7 percent over the past year and Zillow economists predict that these prices will rise by 0.3 percent within the next year. But, is it a good time to buy a home in La Habra city? Or is investing in La Habra worth it? If you are looking for homes for sale with a good flipping profit, La Habra can be a profitable property investment option. Based on the Walletinvestor.com forecast, the long term increase in the La Habra housing market is expected. The predicted price of a home in La Habra is approximately $680,278 by 2025-01-31. For investors wanting to invest in this market, the 5-year investment profit is expected to be around +14.58 percent.

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Source: RentCafe.com

Crime Rate in La Habra, CA The crime rate in La Habra is relatively higher than the national average across all the communities in the united states, from the

largest to the smallest. However, it’s good to point out that at 20 crimes per 1000 residents, it’s not among the communities with high crime rates. According to Neighborhoodscout.com, the chance of becoming victimized in La Habra is 1 in 49. Relative to California, La Habra has a crime rate that is higher than 52% of the state’s cities and towns of all sizes.

While in general, the California housing market predictions for 2020 tell us that the coming year will be a good year and a time to invest in the counties of California, as an investor, do your due diligence, remember, location really matters.

When compared to other cities with the same population size, La Habra has a crime rate that is noticeably lower than the average, which means, compared to other cities nationwide, La Habra is actually safer than most. Research shows that La Habra’s violent crime rate is 2 per one thousand inhabitants, which is about average for all communities in the U.S. across all population sizes. Violent crimes have been taken to mean armed robbery, aggravated assault, rape (not statutory), murder and non-negligent manslaughter. The chances of becoming a victim of violence in La Habra is one in 560. La Habra Annual Crimes Violent Property Number of Crimes Crime rate (per 1,000 residents)

Total

111

1,160

1,271

1.79

18.65

20.44

Property Crime Comparison Works Cited https://managecasa.com/articles/california-housingmarket-report/ https://www.zillow.com/la-habra-ca/home-values/ https://www.rentcafe.com/average-rent-market-trends/us/ ca/la-habra/ https://www.neighborhoodscout.com/ca/la-habra/realestate https://www.realtor.com/realestateandhomes-search/LaHabra_CA/housing-market https://walletinvestor.com/real-estate-forecast/ca/orange/ la-habra-housing-market https://www.rate.com/research/la_habra-ca-90631/markettrends

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

THE BAY MARKET AREA IS COOLING DOWN THE BAY MARKET AREA IS COOLING DOWN

HERE IS WHY HERE IS WHY

KENNETH SESSION

he number of bidding wars in the Bay Area is sinking, with some of the steepest declines in the San Jose metro area according to a report by Redfin. In the second quarter of 2019, San Francisco, San Diego, and Boston Metros saw the most bidding wars, characterizing those housing markets as the most competitive even though the bidding wars in each of those metros was less than half than it was a year earlier. But despite a steep decrease in the competition, the Bay Area remains to be one of the nation’s most competitive housing markets. Redfin notes that of the offers posted by their agents, only 11.2 percent faced a bidding war in July 2019. A figure relatively low by more than 45 percent a year earlier and lowest rate since at least 2011. Nationally, the bidding war rate hasn’t gone up 15 percent since November 2018, after falling steadily from a peak of 59 percent in March 218. “Mortgage rates have been mostly flat for the last month, and so has homebuyer competition, which was beginning a fast descent this time last year as mortgage rates were inching toward 5 percent,” said Redfin chief economist Daryl Fairweather. “On a local level, it’s noteworthy that some of 2018’s fiercely competitive markets_San Jose, Seattle, Los Angeles_have seen their 60

bidding war rates plummet the most year over year. Home prices in these expensive markets have also been falling annually. Overall, I expect homebuyer demand to strengthen in the second half of the year as the housing market continues to stabilize, but we may not see a big pop in bidding wars until early next year.” Another report from Corelogic also notes that the demand for the Bay Area homes is cooling and the prices keep falling. Which is good news for the people wanting to buy in the Bay Area region. According to the research by Corelogic, the median sales price for new homes dropped 7.1 percent. In addition, previously sold homes saw a 4.7 percent decline compared to last year. “I think the immediate trigger a year ago was the run-up in mortgage rates,” said Dr. Frank Nothaft, a chief economist at CoreLogic. “Mortgage rates got posted about 5% a year ago and that put up a chill on all potential buyers in the market place. When mortgage rates go up, that means the monthly mortgage payment is just taking that much bigger of a bite from family income.” For almost two years now, prices of homes in the Bay Area have been declining, with most realtors saying that they are continuously getting less ‘all-cash’ buyers and have seen clients’ homes sit on the market for an average of 25 days before the sale. Compare that to a few years ago where a home would likely THE POWER IS NOW MAGAZINE | FEBRUARY 2020

sell in less than 10 days, and realtors could get some several hundred thousand over the asking price. CoreLogic reports that in September 2019, the median sales prices for all homes in the Bay Area was about $778,000 down from $815,000 last year. In San Francisco, one of the most expensive markets in the country, the decline is steep, with only 35 percent of the homes posted by Redfin facing bidding wars, compared with 72.4 percent a year earlier and up from 28 percent in June. “Although the market isn’t as hot as it was last year, this spring and summer have been busy in San Francisco. That’s partly because homebuyers are feeling pressure to move quickly due to the high-profile tech IPOs, whether that pressure is real or perceived,” said San Francisco Redfin agent Miriam Westberg. “Low-interest rates are also a factor in increased homebuyer interest since the beginning of the year. The market has definitely picked up since the winter and it seems WWW.THEPINMAGAZINE.COM

like prices and competition are slowly heading back to mid2018 levels.” So, what’s causing this decline and for how long? Right now, the cloud of uncertainty with the stock market is very heavy. Even though the economy is still strong, unemployment levels so low and consumer confidence high, that uncertainty is scaring away most homebuyers. What we are seeing is a lot of people opting to refinance rather than enter the market, despite the mortgage interest rates being at their lowest. Sales of the existing Bay Area homes have already swooned. In June last year, sales of homes in the area saw a 13 percent fall from the previous year, the lowest they have been in a decade. Of importance to note is that the Bay Area median home prices also continued to cool in June, dropping 2.2 percent from the previous year. The biggest fall, however, was in February 2012. “Buyers do seem a little reluctant to get into bidding

wars. Mostly it seems to be because they’re worried about a recession or ‘overpaying,’” says Redfin agent Kalena Masching, who works mostly in Palo Alto, Mountain View and Menlo Park. “Buyers aren’t feeling as much urgency to make offers.” Even though the prices for homes in the Bay region are falling, they are not falling far enough. Only a few people can get access to a million-dollar mortgage. This only means most buyers are still priced out. And many of them are waiting on the sidelines, waiting for the market to cool down even further. In other Bay Area market areas, many realtors have no choice but to purposely underprice their homes to goose interest and stimulate a bidding war.

Works Cited https://www.redfin.com/blog/july2019-real-estate-bidding-wars https://www.nbcbayarea.com/news/ local/bay-area-home-prices-continueto-slide-study/2085749/

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Why did we choose to start this program? First Bank has recognized the need for a program that allows CPAs, PhDs and professionals in the legal and medical ﬁelds the opportunity to close loans based on current and/ or contracted guaranteed employment and income levels. We realize your desire to secure a home for you and your family prior to a career change, move or re-location. What would be better than having your home established prior to starting new employment? Talk about taking the stress out of your move!

Why Choose First Bank? Peace-of-Mind! With First Bank’s Professionals Program, you’re able to secure a home for you and your family – without the worry of providing past earnings history*.

* Program Guidelines: • Bank Portfolio, ARM and fixed loans • Attached/Detached SFR’s and PUD’s. • Low down payments available. No Private Mortgage Insurance. • 700 minimum FICO score. No derogatory credit in the prior 12 months. • Available in footprint states only. • Owner-occupied residence only. No second homes are eligible. • Borrowers must establish First Bank Checking account as well as set up automatic payment withdrawal prior to closing. • Borrower must start employment within 30 days of closing. • Employment must be verified with fully executed, accepted, non-revocable contract. • Two-year history in line of work must be verified and documented. Education in field of employment for prior two years acceptable provided it was in the field of employment.

Personal Touch! One point of contact. You’ll never wonder who you should call with questions. Great Rates! It’s not too late to get a great rate on your mortgage. Contact a local First Bank Mortgage Loan Consultant today for our current low rates. Let the highly-trained professionals at First Bank walk you through the process, so you can focus on what you do best.

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RIVERSIDE HOUSING MARKET RIVERSIDE HOUSING MARKET A ADECADE AFTER THE WORST RECESSION DECADE AFTER THE WORST RECESSION

RUBY FRAZIER

he trade war is still dragging on and the yield curve has been slowly but surely inverting. Silently, investors are fleeing for safety, to avoid extreme eventualities. The global growth is slowing, leading to the stock market dip, which loosely means, millennials are screwed especially in Riverside! Being the fourth most populous county in California with over 2.4 million residents. Much of the growth can be traced back to the millennium boom years when the construction jobs and new home sales had skyrocketed.

feel, from adults to infants to retirees. Over the last two years, there have been rumors of recession, if it happens, it stands to hit the Riverside market particularly harder. Most markets around the country are seeing homes sitting on the market slightly longer than usual, raising concerns, even the former U.S. treasury secretary Larry Summers says that there is a 50 percent chance of a recession this year. However, that doesn’t warrant panicking, and it is time we start paying attention to the signs of volatility.

A decade after the end of the 2008-2009 recession, Riverside’s economy remains in a state of a prolonged recovery. Even though today most cities across America are doing far much better than they were before the recession, the same cannot be said about some regions, especially in Riverside. Back in 2017, the Economic Innovation Group released a report which found out that one in six Americans live in what the group calls ‘economically distressed communities.’ typical characteristics of these cities include high shares of

Recession is no good news for anybody. The last recession left the region in deep losses in home sale volume, new constructions, and employment. With a sputtering economy comes financial, emotional and economical strain that everyone can 64

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poverty, many houses left vacant, and a large proportion of adults in those regions are without high-school diploma, high unemployment levels and a lower median income than the rest of the state in which they are located. While slowly gaining momentum, Riverside’s employment rate is finally catching up, exceeding the number of jobs prior to the great recession at the end of 2014. Supposing that the U.S. economy slips into another recession, homeowners in Riverside will be in more danger than most cities according to Redfin. Crunching a range of risk factors across 50 U.S. Metro areas to estimate which U.S. markets were the most vulnerable in a severe economic downturn,

Redfin economists analyzed how the global trade would affect the local economy, especially given the current confrontation with China. “If the U.S. enters a recession in the next two years, it will likely be caused by the global trade war,” Redfin Chief Economist Daryl Fairweather said. “U.S. industries that rely on exports, like the automotive industry and the agricultural industry, would be the most vulnerable and susceptible to layoffs.” It is highly unlikely that the next U.S. economic downturn will be caused by housing, however, if it happens, some markets will be more vulnerable than others.

Redfin analyzed the top 50 metro housing markets across a range of metrics, including price to income, loan to value, exports share of local output, and employment diversity, and then ranked them from highest to lowest risk in the event of a recession. Riverside scored riskiest, measuring 22.8 points worse than the midpoint of all 50 metros.

Redfin data show that Riverside city lacks employment diversity, and has a high price-to-income ratio. Surprisingly, San Francisco where the median home prices are almost 15 times the median income ranks 35th most vulnerable on the list, largely because most of the buyers paid for their homes in cash rather than with borrowed money that could be difficult to repay if they lost their jobs or if they faced other financial disruption. WWW.THEPINMAGAZINE.COM

Riverside Housing market Analysis The sales volume in Riverside county has remained mostly level since 2011, with the only exception being in 2014 when the area was particularly hit hard by the rapid exit of speculators. The market recovered from that exodus in 2015 when the sale volume rebounded to 11 percent. Fast forward to 2019, a true market l

recovery is yet to materialize, annual sales volumes continue to plod along, with 2018 sales volume being 3 percent below the year-earlier and as of Q3 2019, the year-to-date sales volume is 1 percent below a year earlier. Experts predict that sales volume will not fully recover for a few more years, probably reaching full recovery around 2021-2023, at which point the first-time generation Y homebuyers and Baby Boomers will converge to drive up sales volume and price. In the meantime, what we should be expecting is reduced home sales and prices. According to data by FirstJournal, Riverside’s turnover has fallen from the peak of 2009. Without the homeowner or renter turnover, homes do not easily sell. The turnover rate peaked in 2009 largely due to the tax stimulus and high levels of foreclosures, which temporarily boosted sales volumes as more tenants became homeowners. Since then, turnover has swiftly declined as potential end-users have chosen to remain where they are. To date, the turnover rate is still below the level needed for a full recovery in home sales. Riverside’s homeownership rate has rebounded after falling steeply during the recession period. From 2000, Riverside’s homeownership has hovered around 68% through the end of the Millennium Boom. As of Q3 2019, the rate of homeownership has risen fully from its bottom, now standing at 67.7 percent. This is significantly higher than the state’s average of 54 percent as of Q3 2019. While fears of a recession seem to have cooled down, it is still good to be cautious. Riverside is one of the SoCAL hottest markets with an annual appreciation rate of 3.7%. If the recession would hit again, Riverside would suffer great losses given that the county has not fully recovered from the last recession.

Works Cited https://www.redfin.com/blog/next-recession-housing-market https://www.theatlantic.com/ideas/archive/2019/08/ millennials-are-screwed-recession/596728/ https://journal.firsttuesday.us/riverside-housingindicators-2/29239/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

CORONA APPRECIATION RATES CORONA APPRECIATION RATES TRENDS AND HOUSING MARKET DATA TRENDS AND HOUSING MARKET DATA

JENNY GONZALEZ About Corona Corona is a city in the State of California with a population of 168,819. The city has a total of 49,953 total housing units which comprises of homes and apartments. The real estate costs in Corona, CA are among the highest in the country, however, they do not compare to the real estate prices in the most expensive

California Communities. Corona borders the Cities pf Norco and Riverside to the north and northeast respectively, Chino Hills and Yorba Linda to the northwest and the Cleveland National Forest and the Santa Ana Mountains to the southwest. Corona is approximately 48 miles Southeast of Los Angeles. Corona boasts of an ethnically diverse community, where a significant portion of the population is made up of young, educated families.

Other than that, the Corona community prides itself on having many amenities that provide a first-rate life for the residents. The public Safety efforts by the Corona Police Department in conjunction with the Corona Fire Department have largely resulted in decreasing crime rates. If you are looking to buy a home in Corona, or simply want to invest, Corona is the best place and can turn into a very profitable investment option.

Home Prices and Values in Corona According to Zillow, the median home value for a home in Corona is $497,005 and over the past year, home values in Corona have gone up. Zillow predicts that they will rise by 1.0% within the next year. The Single-family detached homes are the most popular housing type in Corona, accounting for about 68.14% of the cityâ€™s housing units. The other types of housing that are common 68

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in Corona include large complexes, or the high rise apartments accounting for 17.55%, duplexes, homes converted to apartments or other small apartment buildings accounting for 6.14% and a few row houses and other attached homes. According to RedFin, the Corona housing market is somewhat competitive. Homes in the area posted for sale typically receive 1 offer. Homes sell for about 1% below the list price and go pending in around 58 days. Redfin notes that hot homes in the Corona market can sell for around list price and go pending in about 32 days.

short term investment in the Corona housing market would be a bad idea. The short term real estate market forecast is based on the median home listing prices for the last 5 years While the long-term housing forecast is on all the available median listing prices recorded to date.

The most common type of building size and type in Corona are the three and four-bedroom dwellings, mainly found in single-family detached homes. The city has a mixture of owners and renters, with 64.60% homeowners and 34.40% renters.

Homes Appreciation Rates in Corona In the last 10 years, Corona has experienced some of the highest appreciation rates than any community in the nation. The housing market in Corona appreciated 73.10 percent in the last 10 years. This means the average appreciation rate is 5.64% which puts corona in the top 10% of the cities with the highest appreciation rate. The long-term increase in median home price for houses in Corona is expected to increase, with some forecasts showing that the predicted price of an average home in the Corona area by 2025 will be around $572,397. On the downside,

The Market Action Index The market action index answers the question, “how’s the market?” by comparing rate of sales versus the inventory and has been hovering around 46. Over the past few weeks, the market has been cooling down, and for some time, the prices have been flat. Since the market is still on the ‘seller’s market’ side, it would be advisable to watch out for the changes in the market action index. Supposing that the MAI resumes its upward surge, prices are most likely to follow suit, if the MAI drops consistently, or even falls below the buyer’s zone, they might be downward pressure on prices. Based on data from the last 12 months, the real estate prices in the counties of Corona increased significantly. The trend is expected to hold for the next 12 months, with the median home values increasing by 1.0-1.2%. In the next ten years, Corona City real estate prices will increase by 26.62%.

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OAKLAND MARKET 2020 OAKLAND MARKET 2020 A BUYERS OR SELLERS MARKET

A BUYERâ€™S OR SELLERS MARKET

DON DUNBAR Right now, even though the California housing market shows every sign of cooling down, it is still one of the hottest markets in the country. To be more specific, the Bay Area has seen some unprecedented growth over the past few years, a growth emanating from the growth of the tech industries in the area. Another reason being the population explosion where people are coming in the county from the neighboring areas in search of better opportunities. The city of Oakland presents the best case for this explosive dynamic, representing so many other cities in the region. Housing and real estate economists are very pessimistic about the Bay Area as far as the 2020 housing market is concerned. Most agree that even if there was a housing crash anytime during the year 2020, people should not expect the housing costs to be saner, nor will it slow the sales. According to a survey by Zillow, the ma jority of economists think that the Bay Area median home values will rise more slowly than the national average, amid several years of soaring home prices, and lesser gains, a trend expected to extrapolate in the 2020 housing market. For the last 18 months, home prices have been dropping, breaking the nearly long decade of price escalation. The Bay Area Market first showed signs of buyer fatigue in 2019, characterized by falling sales and prices in core

Silicon Valley counties. In 2020, the same could happen, leading to a softer market which will be largely influenced in an up or down cycle by several forces, including low-interest rates and unemployment rates, and the more destabilizing presidential elections.

Oakland Real estate Trends for 2020 The real estate market in Oakland will continue to be an ideal market for people looking for rental property investment. Currently, the demand for the rental units in Oakland is at an all-time high. In fact over half of all the properties in Oakland are occupied by renters, a trend not expected to slow down any time soon. One ma jor driver of this trend is the fact that home prices in the area are very high, moreover, the rents in neighboring are extremely high, playing a significant role in driving more potential renters in Oakland. Another trend we expect to see in Oakland in 2020 is that home prices will see a slight increase. All through 2019, the Bay Area has been cooling down. Home prices have actually plateaued compared to 2018. However, we should expect that the prices will rise by 1.6% in 2020, which means, investing right now will allow you to profit from a strong market rebound.

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

The demand for housing will be high as the tech sector continues to expand in the area. Oakland is home to some ma jor technology companies including Uber, Hound Labs, Marqeta just to name a few. Their expansion in the region means that space will become even scarcer in the San Francisco real estate market, pushing more companies to set up their offices east of the Bay Bridge. This can be witnessed by the fact that an increasing number of developers are starting to incentivize the big tech companies by committing to large-scale projects that are tailored to the industry needs. As this expansion continues, the Oakland housing market will remain a prime target

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for real estate investors and renters alike. A drop in the interest rate is particularly the most encouraging, this trend is unfolding throughout the country as the Fed seeks an opportunity to stay ahead of a potential economic downturn, by cutting the interest rates. The Oakland real estate interest will drop from around 4% to 3.7% which means financing a property in Oakland will be cheaper than it has been for the last few years. As baby boomers move away from the market, the supply of houses will slowly increase. The exodus of baby boomers from the market is a trend thatâ€™s expected to be seen

even in the future. In fact, older residents have already begun downsizing and moving away into more affordable areas. This increases the supply over the next few years, benefiting buyers in the next decade. The tension that has been in the market will ease up will offering investors an opportunity to snap up prime real estate properties at decent prices. Basically, the 2020 Oakland real estate market will be a sellerâ€™s market despite the relative cool off in the past few months. This trend might continue into the foreseeable future as the demand continues to outpace supply. Given the current housing situation in California,

By definition, squatting legally refers to adverse possession, when someone moves into a property without the permission of the owner. Housing in California has been so bad that people are now living in abandoned buildings, giving a judge in Alameda county a hard time deciding on whether one of the women, Dominique Walker has the right to occupy the home. People are taking advantage of the adverse possession, or the squatter’s rights law. The squatters can sue for legal possession after living and taking care of an abandoned house for five years, so long as they meet certain strict conditions. The Bay Area has most of its properties empty and scattered throughout the region despite the massive financial incentives to rent or even to sell in today’s hot market. The issue of squatting recently surfaced after Moms 4 Housing moved several homeless women into an empty house in Oakland without permission in November last year, causing a lot of furor when the landlord tried to evict them

squatting will be on the rise. Squatting has been a problem for as long as the property has been a concept. In some instances, there have been times where the tenants overstay their lease and then try to claim that they have squatters’ rights. California is among the states with a very unique set of squatting laws, if you work there, you definitely need to be aware of these laws.

Before the Moms 4 Housing came into the scene, people have been silently occupying vacant properties throughout Oakland. The law allows the squatters to claim possession of a house after establishing his or her residency, by having mails and bills sent to the house, openly coming in and out of the property through the front door and paying the property taxes for at least 5 years. The Moms 4 Housing has not attempted to follow the five-year requirement to sue for legal ownership. Rather, what the group is doing is using its high profile occupation of the house to send out a political message, that everyone is entitled to housing.

Works Cited https://www.mashvisor.com/blog/oakland-housing-marketpredictions-2020/ https://www.ocregister.com/2020/01/02/from-squatter-tolegal-homeowner-in-california-its-possible/

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

[POWER MORTGAGE]

BACKING LARGER HOME LOANS NOW

WHATâ€™S THE GAME PLAN HERE

FREDDIE MAC, FANNIE MAE AND FHA

he Federal Housing Finance Agency during the third quarter of 2019 announced the maximum conforming loan limits for the mortgages to be acquired by Fannie Mae and Freddie Mac during this year. For the one-unit properties in 2020, the maximum conforming loan limit will be $510,400, an increase from $484,350 in 2019. This marks the fourth straight year that the FHFA has increased the conforming loan limits after not increasing them for an entire decade, between 2006 to 2016.

What is a conforming loan limit By law, Fannie Mae and Freddie Mac are restricted from purchasing the single-family mortgages with origination balances below a specific amount. This amount is what is known as the conforming loan limit. The loans that are above this limit are known as the Jumbo Loans. 76

In the 70s, the national conforming loan limits for mortgages that finance single-family one-unit properties increased from $33,000 reaching $417,000 in 2006-2008, with limits 50 percent higher for four statutorily-designated high-cost areas: Alaska, Hawaii, Guam, and the U.S. Virgin Islands. Since 2008, the conforming loan limit has only been increased through various legislative acts in certain high-cost areas in the United States. While some other legislative initiatives established temporary limits for loans originated in select time periods, a permanent formula was established under the Housing and Economic Recovery Act of 2008 (HERA). The 2020 conforming loan limit has been established under the HERA formula.

Baseline Limit Effect Since 2016, the FHFA has increased the conforming loan limit for the first time in 10 THE POWER IS NOW MAGAZINE | FEBRUARY 2020

years and since then the limit has gone up by $93,400. The Housing and Economic Recovery Act established a baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels.

In 2019, the median home values increased in high-cost areas which drove the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $765,600-or 150 percent of $510,400.

HERA requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the changes in the average U.S. home prices. The estimates for the increases in the average U.S. home value over the last four quarters is published under FHFA’s House Price Index (HPI).

FHA 2020 Loan Limits

Data from FHFA show that home prices increased by 5.38 percent on average between the third quarter of 2018 and the third quarter of 2019. This means that the baseline maximum conforming loan limit in 2020 will be increased by the same percentage.

High-Cost Areas The number of counties where the median home price far exceeds the FHA loan limit. To estimate, approximately 70 counties. These are areas where the loan limit exceeds the floor and are considered the high-cost areas. For these areas in which 115 percent of the local median home values exceed the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit. HERA establishes that the maximum loan limit for the high-cost areas as a multiple of the area median home value while setting a ceiling on that limit of 150 percent of the baseline loan limit.

The 2020 FHA loan limit for most of the country now stands at $331,760, which is an increase of nearly over 2019’s loan limit of 314,827. FHA is a requirement of the National Housing Act, as amended by the Housing and Economic Recovery Act of 2008, to set single-family forward loan limits at 115% of the median house prices. The percentage is subject to a floor and a ceiling limit. FHA calculates forward mortgage limits by Metropolitan Statistical Area and county. For this year, the FHA minimum national loan limit, or the “floor,” of $331,760 is 65% of the Fannie, Freddie loan limit of $510,400. This floor applies to the lower-cost areas, which are the counties where 115% of the median home price is less than the floor limit. For the high-cost areas, FHA’s 2020 loan limit is set at $765,600 which is an increase of about $40,000 from 2019’s $726,525. FHA reports that the loan limit increased in almost all of the 3,233 counties where it backs loans, but there are a host of counties where the loan limits actually decreased. For much more on the Fannie and Freddie Loan limits, Click Here

Works Cited https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFAAnnounces-Maximum-Conforming-Loan-Limits-for-2020. aspx https://www.fhfa.gov/DataTools/Downloads/Pages/ Conforming-Loan-Limits.aspx https://www.housingwire.com/articles/fha-fannie-maefreddie-mac-are-all-now-backing-larger-loans/

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[POWER MORTGAGE]

WHAT THE U.S.- IRAN WAR COULD MEAN FOR THE HOUSING MARKET

he White House confirmed that it gave orders to have one of Iraq’s top-ranking generals, sending shockwaves across various U.S. markets. Though the situation seems to have cooled for the moment, geopolitical escalations and conflicts are far from being resolved, making most investors circumspect.

What most investors want to know are the implications of war between the U.S. and Iran? “Gold’s a winner as tension increases, and oil prices are higher too,” Societe Generale’s Kit Juckes wrote on Friday morning. “Bond yields are lower, the equity rally which was underway in the U.S. has stalled but not gone dramatically until reverse, and in the FX market, safe havens and oil-sensitive currencies benefit but it’s the yen which is the clear winner.” As threats between U.S. 78

and Iran leaders ratchet up, the dangers of an open conflict between the two nations continue to pile up. Such a clash will likely have repercussions far beyond the loss of life and tilt in the geopolitical balance. A clash that could penetrate every fabric that holds the U.S. markets and the housing market is no exception. In the event of a war, it could push down the mortgage interest rates. It would also affect the home prices and the number of sales, with the extent of spreading depending on the severity and the duration it might take to calm down. “A potential war with Iran would make Americans less likely to buy a home,” says realtor. com® Senior Economist George Ratiu. “It increases uncertainty about the future.” Right now, uncertainty is the last word that most people to hear before making the biggest financial commitment of their lives. Some of the likely events include;

Mortgage interest rates would fall According to Realtor.com, the eventuality of war would likely lead to the already low-interest rates to fall down even further. “The sil ver lining is, high uncertainty will keep mortgage rates low,” says Ratiu. Mortgage rates are tied to the 10-year Treasury bond market. “Investors tend to favor bonds [versus stocks] in more uncertain times. Bonds are more stable than stocks when there’s volatility in the economy.” There’s an old rule of thumb that investors hate uncertainty more than anything, and that’s exactly what market prognosticators have been riding on. Markets reacted accordingly when the oil and gold prices shot up, while the stock market fell and the interest rates declined. When the bonds are doing well, the mortgage rates drop. This makes home-buying more affordable which further

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

means more people are able to qualify for a loan.also when the rates are down, it also means that refinancing is easy. How far down they will go, no one knows, we can only speculate, last month, they averaged at 3.72 percent for the 30-year fixed-rate mortgage according to Freddie Mac. amid the geopolitical clash escalating, it is highly unlikely that they will drop much further, especially given the nature of international investment nowadays. “We’re already pretty low,” says Joel Kan, an economist at the Mortgage Bankers Association. “It’s hard to say how far down they’ll go at this point.”

Effects on Home Sales We all know that the market is dominated by Millenials and as they get ready to settle down and raise a family amid the housing crisis, most economists don’t anticipate any dip in the demand for housing. Even though Trump claims that the U.S. is energy sufficient, still the country depends on reserves from the middle east. If oil prices rise because of a conflict in the middle east, it would WWW.THEPINMAGAZINE.COM

affect everything, from how much a driver pays at the pump to the cost of goods coming from all over the world, which ultimately leaves less money in the pockets of most people. This could make it harder for first-time homebuyers to save up for a downpayment. A war could also spark up a recession. Companies may be reluctant to spend and some might even make some cuts. Supposing that mass layoffs sweep the nation again, most people would be worried that they will be laid off, thus save what they can rather than funneling their savings into a home. “Some [buyers] will pull out because of the possibility of a recession,” says Lawrence Yun, chief economist of the National Association of Realtors®. “But some people will jump in because of the low mortgage rates.”

Works Cited https://www.realtor.com/news/trends/war-with-iran-hereswhat-that-could-mean-for-the-u-s-housing-market/ https://fortune.com/2020/01/03/iran-us-conflict-stockmarket-oil-prices/

[POWER COMMUNITY]

THE RIVERSIDE COMMUNITY COLLEGE TO ASK VOTERS FOR $715 MILLION BOND FOR COLLEGE UPGRADING

oday, a California student graduates with an average of more than $20,000 in student debt. The least can be said of the other states considering that California gives more generously when it comes to the financial aid of the student. This means that the situation is dire in most places than in California, yet the high student debt. Gone are the days when students used to take free college for granted, studies show that a huge percentage of students are struggling even to afford food and housing. But how did we get here?

contribute to their education. Ronald Reagan who largely played a part in the slash said that the state should not in any way subsidize intellectual curiosity. Much later, the dotcom bust prompted the tuition increases under both the Democratic and Republican administrations.

Between 1977 and 2018, the undergraduate fees at UC was on an upward tra jectory with no signs of slowing down, growing nearly five times the rate of inflation in that period. It gets even worse, California State University tuition has grown by about 900% in the last four decades, adjusted for inflation and that excludes

The University of California’s 1868 Chapter states; “as soon as the income of the University shall permit, admission and tuition shall be free to all residents of the State.” back in the 60s when the lawmakers were drafting the Master Plan that would steer the future of students in some of the most prestigious public higher education system, residents enrolled at the UC were paying less than $70 per semester in “incidental fees.” The late 1960s saw the politicians push to increase the amount that students would 82

THE POWER IS NOW MAGAZINE | FEBRUARY 2020

additional fees imposed by individual campuses.

Measure A: What is it? The RCCD Board of Trustees concertedly voted to place Measure A, a $715 million college improvement bond measure on the March 3, 2020, ballot. The measure seeks to provide funding to repair and modernize some of the outdated classrooms, labs, science centers, and career training facilities at Moreno Valley College, Norco College, and Riverside City College.

Even as the cost of education keeps rising, the Measure ensures that the local students have better access to affordable, high-quality education and career training. Certainly, the cost of attending the Cal State and UC systems has skyrocketed overboard, endorsement of Measure A ensures that lower and middleincome students who are at a disadvantage of joining these universities still have an opportunity to succeed in college and in their careers. Statistics indicate that nearly 40% of students graduating from high school rely on Moreno Valley College, Norco College and Riverside City College for higher education and career training, making it imperative to repair and upgrade these colleges.

Voting YES on Measure A A yes vote on Measure A would mean that the colleges get to maintain classroom and student service centers by replacing leaky roofs, rusty plumbing, and outdated electrical systems. It would also mean that the classrooms and labs would be upgraded to help the local students complete the first two years of college affordable, and transfer to Cal State or UC systems. It would also improve student safety and campus security systems including security lighting, cameras, WWW.THEPINMAGAZINE.COM

emergency communications systems, smoke detectors, and fire alarms. Lastly, Upgrade classrooms and career training facilities for science, technology, engineering, math, and computer science In 2004, voters in the college district approved a $350 million bond measure which was a countenance for the nursing, student service, and math buildings giving them culinary academy and more. “When the community trusted us, we were able to do great things, and now we need them to trust us again,” Mary Figueroa-the board’s Vice President.

Board Betrayal would Cost the Measure A lot Of course, the measure has been objected by some members of the public, criticizing the board with claims that the bond measure doesn’t list the specific projects on which that money would be apportioned to. Figueroa said that it was important that the district redesign itself to accept the radical changes brought about by technologies and expectations. RCCD further writes that all the money raised by Measure A would stay local to support the community colleges and students. No money would be channeled to the state. “A clear system of accountability l

would be required, including a project list detailing exactly how the money would be used, a Citizens’ Oversight Committee and independent audits.”(“Measure A”) A project list, Citizen’s Oversight Committee, and independent audits will limit the types of projects the board members can use the money. The measure would also cost each homeowner less than $50 per year until the bonds are paid off. The resistance from some of the residents could be because of the action of the Board to fire Norco College President Bryan Reece in June last year where some Norco community members said they felt betrayed. If the district doesn’t support their preferred president, they wouldn’t support the district’s request for the bond. Figueroa is hope however to convince anyone opposed to the measure that the bond is in their best interest. “We’re always going to be concerned whenever any part of the community says they’re not going to be supportive,” she said. “I hope we’ll be able to explain to them how it’s going to benefit their families and students … I’m not seeing it as a lost cause. I’m seeing it as an opportunity to get into an engaged community to explain where we’re going.” Education is important for everyone. It is a basic need for every child and therefore when such a measure is brought forth, we should support it. The cost of education in the state is soaring, and if you would like a consultation with me on how to better manage your finances or access to quality loan, get in touch with me at Eric.frazier@thepowerisnow.com

Eric Lawrence Frazier MBA President and CEO of The Power Is Now Media Inc. NMLS 461807 www.thepowerisnow.com 84

Works Cited https://www.yes4measurea.org/aboutmeasure-a https://www.rccd.edu/measureA/Pages/faqs. aspx https://www.pe.com/2019/11/20/riversidecommunity-college-district-to-ask-voters-for175-million-bond/ THE POWER IS NOW MAGAZINE | FEBRUARY 2020

Home Ownership By Eric Lawrence Frazier MBA

Home ownership brings stability to individuals and families who have never had a dwelling place that they could call their own. There is something special about owning real estate that is unlike anything else on earth you can own. Real Estate you own is not like cars that decay over time and you have to replace them. Real Estate you own is not like clothes that go out of style and you have to buy new ones. Real Estate you own is not like expensive vacations or experiences that only last a moment in time. Real Estate you own is not like an apartment where the landlord may increase the rent until it’s no longer affordable. Real Estate you own is not like staying at your parents house where you know can’t stay forever. Home ownership is the beginning of wealth that increases over time and becomes your estate & legacy Home ownership is the pride of a mother nurturer and the kitchen her domain Home ownership is the pride of a father provider and protector of his territory and family. Home ownership is the foundation of permanence and the place where life happens, birthdays celebrated, deaths mourned. Home ownership is the place you build memories that can never be taken from you. Memories etched in walls and concrete, experienced in rooms and floors, Memories living in trees and shrubs planted by your hand. Howe ownership is the manifestation of you - your style, your colors, your smell, your stuff, your junk, your memories, your yard and your spaces, your life. It’s the height markers on your first child’s bedroom wall. It’s the hearts drawn in the concrete slabs when you pour your patio floor It’s the birthday parties, and anniversaries in the living room and kitchen. It’s the back yard barbecue with friends, neighbors and family contentions it’s the high school and college graduation, and wedding receptions Its’ the family nights and block parties and the fellowship of family connections Home ownership It’s more than real estate. Land, brick and mortar, wood frame construction and chicken wire. It’s more than money saved, gifts recieved and grants obtained It’s more than the debt you incur to buy it. It’s more than the payments you make to own it. It’s more than the appreciation that comes with keeping it over time. It’s memories, it’s family, and it’s life that can happen in one place Until you say it’s time to move.