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DRE Commissioner Says Better Days Are Ahead


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Wednesday, October 20, 2010

Left to right: SILVAR President-elect Gene Lentz, DRE Commissioner Jeff Davi, Board Director Suzanne Yost, Los Gatos/Saratoga District Chair Bill Rehbock and C.A.R. Past President Jim Hamilton.  

At Wednesday's Los Gatos/Saratoga District tour meeting, California Department of Real Estate Commissioner Jeff Davi congratulated SILVAR members. He noted the recent housing market has been the toughest for California and agents who are still in business should be proud.

"There is something to be said for you being in this business," said Davi. "If you are here today in this business, you are survivors."

Davi said he is certain the housing market will fully recover. The question is when. Price stabilization is happening, the low-priced end of the market has reached the bottom and is already stabilizing.

"The fact that there is still business being done is good. There has been some price depreciation and agents are working more for less… You have better days ahead," he assured REALTORS®.

As is the case with every housing market downturn, the number of real estate license applicants, as well as the number of licensees, has dropped. At one time, the DRE was receiving 200,000 applicants a year; last year, the DRE received only 20,000 applications. About 20 months ago, there were 550,000 real estate agents; as of Wednesday, there were only 471,912 agents. Licensee renewals are at 80 percent, since agents tend to keep their license even if they are no longer active, he said.
Despite the positive signs of market improvement, Davi told members, "foreclosures are not behind us." In past downturns, foreclosures have never trumped notices of default; now, they have.

In 2006, there were 12,000 foreclosures. In 2007, foreclosures jumped to 84,000. The following year, there were 240,000 foreclosures. Last year, the number of foreclosures slightly fell to 200,000 – still a lot, but a good sign, nevertheless, he said. Davi predicts there will be 150,000 this year. Foreclosures need to get back to the 2006 level. He predicts it won't happen till the year 2013.

Davi marveled at the very low mortgage interest rates. "I promise you this, rates are not going to stay at 3 or 3.5 percent fixed. The affordability index is fabulous. Buyers are now better off. They have great opportunities in this market."

Enforcement actions have gone "through the roof" and the DRE staff is overwhelmed with work. "It has been a challenge," he remarked.

No one should be paying upfront fees for loan modifications or forensic audits; nor should anyone pay short sales negotiators, Davi warned members. "It is against the law," he said.

Davi lamented that much of what has happened the last three years could have been prevented if consumers knew more about the risks. As a result, his department has become more active in protecting consumers.

Davi informed REALTORS® about two new task forces formed by his department. The first involves an enforcement triage and advocacy program, which will accept complaints from consumers, alert brokers about these complaints, and seek to resolve them quickly. The "heads-up" move will fend off legal action in cases where a simple phone call can resolve differences. The second task force will involve broker supervision, to ensure when brokers fire unscrupulous agents they will alert the DRE immediately, so the DRE can take corrective action.

"We have to rid the industry of the bad agents," Davi said. "The only way we can do this is with your help."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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