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REALTOR®: Real Estate is Cyclical, California Will Turn Around, Experts Say

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Wednesday, October 31, 2007

"The only constant in real estate is change. With these changes come opportunities. You have to know the market," stressed Alan Okamoto, chair of the Asian Real Estate Association of America, and one of five panelists in the first Bay Area Multicultural Real Estate Summit, held recently at the Elks Lodge in San Mateo.

The summit was the initiative of 11 associations of real estate professionals and brought together over 300 Bay Area real estate practitioners, government officials and service providers in an educational conference format focused on dissemination of information, demographic trends, financial reforms and business practices which affect the fast growing multicultural real estate communities in the counties of Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara.

A panel of experts in the real estate industry discussed the state of California's real estate industry. Comprising the panel were California Department of Real Estate Commissioner Jeff Davi, Okamoto, Freddie Mac Expanding Markets Manager Sergio Barajas, California Association of REALTORS® State Legislative Chair Steve Goddard and Julius Nyanda of the San Jose Association of Realtists. Fidelity National Financial's Senior Vice President for Market Development Pablo Wong served as moderator.

"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."

The DRE Commissioner said there are 547, 300 licensed real estate agents in California today, up from 269,000 in 1991, but he predicts the number will drop in the near future. Already the number of new licensees has dropped from 1,000 to 35 per week.

Both Davi and Goddard advised real estate professionals 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." He advised them to weed out their client data base, keep in touch with their 50 best clients, and use this time to improve their skills.

The panelists observed future growth and opportunities in real estate will lie with ethnic minority groups. "Clearly over time, the non-white population is where growth is occurring and where you should focus," Davi told real estate professionals.

Okamoto indicated the Asian market is one of the emerging markets, with Chinese Americans being the most populous, Indians second, and Filipinos third. This ethnic group has strong credit ratings and business opportunities, but many are linguistically isolated. He pointed out that 30 percent of the Asian population in the San Francisco area is linguistically isolated.

Barajas said there are products out there that can help educate agents and expand their understanding about how to market a product and gain access to emerging markets.

Nyanda predicted it will be a long stretch before things would improve in the foreclosure market. He announced since November 2006, 166 lenders have had to close their business.

Nyanda and Barajas said there are a number of lenders who are willing to work with troubled homeowners. "The key is education and linking with local providers so that homeowners will be educated about their foreclosure options," said Nyranda.

"I don't believe it is government's role to bail out people for their mistakes," said Davi. However, he stressed victims of fraud should immediately file complaints with the DRE, so criminals can be prosecuted. He also said the state should direct troubled homeowners to people who can help them, so they are not misinformed.

"Fifty percent of those with pending foreclosures don't even call a lender if they are in trouble," said Davi. "Tell your clients to call their lender and ask to get connected to the foreclosure department. If we can get people to do it early, we'll have a lot less foreclosures. There are options out there."

All panelists agreed California needs to raise its conforming loan limits. They stressed that it is important to raise this issue and the problem of housing affordability at the local government level – to their city councils, county boards of supervisors, as well as state officials. Davi said local government need to take a hard look at their policies and higher density options.

Goddard noted through local efforts, a number of communities have initiated novel ideas to address housing issues, such has converting overbuilt shopping centers into affordable housing units or utilizes spaces for dual purposes in order to accommodate certain residential requirements, like parking.

"You need to get involved with your local officials. You need to think out of the box," said Goddard.

Even as the sales pace has slowed, opportunities arise in real estate, especially in the Bay Area, the panelists noted. Jobs are being created in this part of the state, the unemployment rate is low and in many places the median home price continues to increase.

"The economy and the issue of median price are shining stars for this area," concluded Davi.

The 11 organizations that initiated the summit included seven ethnic real estate associations - Asian Real Estate Association of East Bay, Chinese American Real Estate Association, Chinese Real Estate Association of America, Filipino American Real Estate Professionals Association, National Hispanic Real Estate Professionals of San Francisco and Silicon Valley, South Asian Real Estate Association of America, three REALTOR® associations -  Bay East Association of REALTORS®, Silicon Valley Association of REALTORS®, San Mateo County Association of REALTORS® and Fidelity National Financial.


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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