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DRE Commissioner Jeff Davi at SILVAR Broker/Manager Meeting

Thursday, November 1, 2007

"We all know real estate is cyclical and California will turn-around," California Department of Real Estate Commissioner Jeff Davi reminded SILVAR members gathered at a Broker/Manager Meeting at the Community School of Music and Arts – Finn Center in Mountain View last Friday.

Davi said home sales in 2006 were the 11th highest on record, with 477,460 homes sold that year. He said the drop in sales and softening of the market today were bound to happen, regardless of the subprime market problems, the resulting rise in foreclosures and the credit crunch.

"Real estate has carried California in the last 12 years and could not sustain the kind of growth in sales and prices we had the last few years, regardless of the credit crunch, the subprime market and rise in foreclosures, which are merely casualties of a market that couldn't sustain what we had," Davi said. "The economy is good and we're not coupling this downturn with a recession."

Davi noted, just as sales are dropping, he expects the number of real estate agents in the state to also decrease. He said there are 547, 300 licensed real estate agents in California today, up from 269,000 in 1991, and already the number of new licensees has dropped from 1,000 to 35 per week.

The reason? As in the case when the market weakens, not all agents will survive the downturn, and only the good, serious agents will survive.

Davi highlighted successes in the department's e-licensing process, reporting 53 percent of license renewals are now done online; miscellaneous license transactions, 59 percent; and exam scheduling, 79 percent. It's a good development because the increased use of online processing by agents frees the department's resources to focus on enforcement. Brokers and managers can now check DRE Web site on information on the status of an agent's license, as well as download a complaint form.

Davi encouraged SILVAR members to report violations. "That's the only way we can get those bad actors out of business. … We are very much complaint driven," stressed Davi.

One of Davi's goals was to speed up licensing processing and he indicated that this goal has been accomplished. Licensing processing is now down 66 days from 175 days in the past.

With the increase in the number of agents has come an increase in number of violations and regulatory cases, said Davi. Cases have increased from 6,900 in 2004-05 to 9,100 in 2006-07. He announced, "We're at pace to have 11,000 cases this year."

The DRE Commissioner noted 52 percent of violations have to do with trust funds/records; 20 percent licensing and employment; 11 percent disclosure, 3 percent broker escrows; 4 percent supervision.

Touching on the issue of affordable housing, Davi advised SILVAR members to raise their concerns at the local level. "You need to hold your elected officials accountable in the city, the county, as well as the state."

He said the affordable housing issue is critical, since "like it or not, California will grow by 500,000 to 600,000 people a year."

C.A.R. State Legislative Chair Steve Goddard was also present at the Broker/Manager meeting and both he and Davi advised Realtors to use this time to re-organize, re-plan, retool to become more effective, more efficient, and to take listings that are realistic.

Goddard said even as the market slows down, agents should continue to "think real estate. That's how you keep getting better. … Use this time to weed out their client data base, keep in touch with their 50 best clients, and use this time to improve your skills."

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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.

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

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