News and Information to Keep You a Step Ahead!

Sabrina Blair

Sabrina Blair

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On June 22, your OCAR Board of Directors voted to elect Tammy Newland-Shishido as 2017 President-Elect and Adam Rodell as 2017 Treasurer. Congratulations to you two!

Some words from our newly-elected officers:

Tammy Newland-Shishido, 2017 President-Elect

b2ap3_thumbnail_TammyNewland-Shishido_200x300.jpg My personal mission statement is to live a balanced life with a passion for service and developing leaders.  This is why I am a servant leader in my community, industry and at the Association.   The rest of my mission statement is, to be willing to risk for great abundance and excellence.  When you make changes you risk, but change is necessary for growth.  I believe we have the best Association, with the focus being on members and benefits for our members.  We listen to you and have made changes at our Association that our members have asked for.  I look forward to following in the footsteps of our Association leaders and continuing to move our strategic plan forward.  We have a lot of talent on our board of directors and I look forward to serving with our directors and being of service to our members.

Adam Rodell, 2017 Treasurer

b2ap3_thumbnail_RodellAdam.jpg I am truly honored and privileged to be able to continue serving the Members of the Orange County Association of REALTORS®.  As your Treasurer, I will continue to guide our Association in the most fiscally conservative manner possible, while always being willing to seek out our Members' voices for future growth potential.


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Your Guide to the Residential Purchase Agreement (RPA)

The RPA is the cornerstone of every successful real estate transaction. REALTORS® should be extremely well-versed with the principles and applications of this form. Receive step-by-step instruction from the expert! California Association of REALTORS® (C.A.R.) Assistant General Counsel Gov Hutchinson will show you how to properly complete the RPA. Sign up today for the next session on September 20 in our Laguna Hills office.

Even if you’ve previously taken an RPA course, you will benefit from this training:

  • Get familiar with the latest changes
  • Receive instruction on forms related to the RPA such as the Residential Listing Agreement (RLA), Requests for Repairs (RR), and more
  • Understand all mandatory and recommended disclosures Learn how to create, modify, cancel, or close a transaction
  • Ensure all commissions are paid-in-full and on-time
  • Better serve and protect your clients 


$80 for Non-Members


Members, register via My Account

Non-Members, please send us your information here (we'll contact you to complete registration).

Additional Information:

This course is Bureau of Real Estate (BRE) accredited for 4 hours of Continuing Education (CE) in Consumer Protection. Cal BRE Sponsor No. 0001.  

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NOTICE: As of June 23, Supra is currently experiencing issues.

One group especially affected is eKEY users. The app is unable to perform the update necessary to enable the mobile device to access the lock boxes. To fix this issue you need to obtain an update code via www.surpaekey.com or contact OCAR.

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Watch the latest edition of the OC Broker Update to hear about:

  • New Wire Fraud Advisory & Updated zipForms®
  • OCAR's Inaugural Leadership Academy
  • Broker Summit: The Future of the MLS in the Age of Zillow
  • MLS Forum

You can also access the OC Broker Update handout which summarizes the topics covered in the video. We have also created the OC REALTOR® Update handout for you to provide to your agents to keep them apprised of timely news, changes and events.

Upcoming OCAR Events and Fundraisers

June 29 - Broker Summit: The Future of MLS in the Age of Zillow

July 14 - MLS Forum featuring Art Carter and Edward Zorn of CRMLS

August 5 - OCAR Palooza to benefit OCAR Cares

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OCAR Members are eligible to apply for State or NAR Director positions. For questions or to submit your application, please contact Debby Ritter.

 State Application National Application

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As of June 1st, ShowingTime for the MLS is available 24/7 to all OCAR members through CRMLS!  Discover how you can use this showing appointment tool to save time, generate more showings and help you sell your listings more efficiently. 

With ShowingTime you will be able to:

-    Use the 'Schedule a Showing' link to request showings on other agents' listings

-    Add showing instructions and determine the best settings for each of your listings to begin receiving online showing requests

-    Set your notification preferences, including 2-way text messaging

-    Benefit from the speed and accuracy of ShowingVoice, our text-to-voice notification system

-    Download and use the ShowingTime Mobile App to request and confirm appointments while on the go

-    Easily manage and customize your own feedback templates sent to showing agents

-    Create personal profiles for sellers displaying feedback, showings and more

ShowingTime Videos:


ShowingTime Materials:

Benefits and Features
Mobile App Guide
Mobile App: How to Setup Sellers on App

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Watch the latest edition of the OC Broker Update to hear about:

  • New CRMLS Rule Changes
  • HUD's Warning for Landlords
  • OCAR's Inaugural Leadership Academy
  • OCAR Palooza Sponsorship Opportunities

You can also access the OC Broker Update handout which summarizes the topics covered in the video. We have also created the OC REALTOR® Update handout for you to provide to your agents to keep them apprised of timely news, changes and events.

Upcoming OCAR Events and Fundraisers

June 29 - Broker Summit: The Future of MLS in the Age of Zillow

August 5 - OCAR Palooza to benefit OCAR Cares

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Familiarity with these ten factors will enable you to address the questions your clients may ask about the real estate market and where real estate values may be headed.

By David Girling
Girling Real Estate Investment Group

With the Super Bowl in the rearview mirror and baseball season just around the corner, I thought I would take a page from David Letterman’s playbook and do a “Dave’s Top 10 Economic Factors REALTORS® Should Be Following Today.”

Today’s headlines convey different messages about real estate. Some are optimistic while others are pessimistic and still others fall somewhere in between. It is important that, as REALTORS®, we be able to read past the headlines and make sense of the news for our clients. The goal of this article is to give you the tools to address in client meetings some of the economic factors that are affecting real estate today.

David Girling wrote this article as a follow-on to a speech he delivered in mid-February. On Thursday, May 19, Girling will present an Orange County Real Estate Market Overview from 2:00 P.M. to 3:30 P.M. at OCAR’s Laguna Hills office. It's free for members, register now.

10. Interest Rates

Mortgage rates are one of the factors that drive the real estate market, and they result from the general level of interest rates, especially that of the ten-year U.S. Treasury Note. For the past three or four years, mortgage rates have been at historic lows because the Federal Reserve has employed a monetary policy that has kept rates low (see Figure 1). Although the Fed raised the Fed Funds rate in December, weakness in the Chinese economy and falling oil prices caused mortgage rates to drop. This is because the United States is viewed as a safe haven by investors; and as they buy U.S. securities, bond prices are driven up and interest rates fall as a result. (There is an inverse relationship between the price of bonds and interest rates.)

Because of the historically low rates, mortgage payments are attractive for many buyers; and as REALTORS®, we should be able to convey to our clients exactly how compelling they are. For example, with a $500,000 loan, the payment is $1,458 per month for an interest-only, 7/1 loan with an interest rate of 3.5 percent. The same loan amount for a 30-year amortizing loan is $2,287 per month at 3.5 percent. However the more important aspect of low rates is the purchasing power achieved. And, if rates ever do go up, it is important to understand the impact on purchasing power that will result. A rule of thumb is that a 1 percent change in rates equals a 10 percent loss or gain in purchasing power. This sort of information supplied to clients may be all that is needed to turn a renter into a buyer.


Figure 1. For the past three or four years, the Federal Reserve’s monetary policy has kept mortgage interest rates at historic lows.

9. Dow Jones Industrial Average

The low rates created by the Fed’s monetary policy have forced investors to look elsewhere for yield. As a result, both real estate and stocks have benefitted, with the Dow Jones Industrial Average surpassing the 18,000 mark and real estate growing at double-digit rates over the past three years. However, there are some who suggest that both real estate values and equity prices can no longer be supported and may be overinflated (or experiencing a bubble). Relative to home prices in 2007 and today, the Dow has far surpassed the peak 2007 levels while real estate values are, in general, still below peak-level prices but within approximately 10 percent across the different sectors. Since the beginning of the year, the stock market has experienced a drop while real estate values are still rising, although the rate of appreciation has slowed. The relationship between the stock market and real estate prices is one that REALTORS® should monitor.

8. Rent versus Buy

The housing crisis created more renters, and the number of single-family homes in the United States that are rentals went from 9 million to 12 million in 2013. Approximately 15 million of the total 90 million homes in the country are now rentals. REALTORS® should be able to help their clients determine if renting or buying is the best alternative by using one of the rent-versus-buy calculators at our disposal. As an example, take a purchase price of $710,940 (December Orange County median home price) with an interest rate of 3.5 percent, a loan-to-value ratio of 80 percent, and a tax rate of 25 percent, and add to the resulting payment the monthly cost of property taxes. Compare the payment to a rental at $3,500 per month looking at both interest-only and fully amortizing loans and the pre-tax and after-tax payments (see Figure 2). The decision would be to buy in all scenarios. And this analysis looks only at monthly cash flows and does not incorporate the benefit of any appreciation (e.g., $154,000 improvement in value at 4 percent appreciation over five years).

Figure 2. At today’s interest rates, when one compares rent payments with mortgage payments on both fully amortized and interest-only loans for the purchase price of $710,940 (the December median home price in Orange County), purchasing offers a clear advantage over continuing to rent.

7. Home Prices

Some experts believe that, once housing prices return to the peak levels of 2006–2007, we may be close to another bubble. Driven by low interest rates, limited inventory, strong buyer demand, and improved job markets, prices in some areas of California are approaching peak levels. However, for January, the California median home price was 21 percent below peak levels, and the Orange County median home price was 9 percent from peak levels. Newport Beach prices were 17 percent off peak levels according to the Newport Beach Home Price Index (see Figure 3). Although home prices are at eight-year highs, they are generally 10 to 15 percent below peak price levels. Unlike stock prices, home prices have not yet reached 2007 peak levels.

Figure 3. Unlike stock prices, home prices have not yet reached 2007 peak levels. For example, in January, Newport Beach home prices were 17 percent off peak levels according to the Newport Beach Price Index.

Home prices continue to improve; and according to the California Association of REALTORS®, the median home prices for January were as follows:

California  $ 468,330 (up 8.8 percent year over year) 
Orange County $ 704,950 (up 4.5 percent year over year) 
Newport Beach $2,521,279 (up 5.6 percent year over year)

On average, 2016 predictions call for a 1 to 4 percent growth in home prices consistent with the year-over-year growth that has been decelerating. It is important for REALTORS® to be aware of this type of home price information. One way REALTORS® can further differentiate themselves is by developing a more detailed understanding of the neighborhoods they farm.

6. U.S. Homeownership Rate

Across the United States, the homeownership rate currently stands at 63.8 percent, the lowest since 1994. The rate peaked at 69.2 percent in 2004, was steady until mid-2006, and has been dropping since the housing crisis that started in 2006–2007. Some see this development as a negative; however, REALTORS® could view it as an opportunity. Many of the homeowners who became renters during the housing crisis will become homeowners again.

5. Foreign Investment

Most will agree that the recent improvement in the housing market was fueled primarily by low interest rates and foreign investment. However, the strong dollar has caused foreign investment to pause because U.S. real estate is now more expensive. The Chinese, who have overtaken the Canadians as the number one investors in U.S. real estate, are an exception because they view the United States as a safe haven and continue to invest at a steady pace, despite the strong dollar. Foreign investment is important for the continued strength of the real estate market because it supports prices. One development that may have an impact on foreign investment is an announcement by the Treasury Department that it will be tracking secret buyers of luxury properties because of concerns about money laundering in high-end real estate. (Almost 50 percent of the homes selling for more than $5 million were purchased by shell companies.) The initiative will start in Miami and New York but is expected to expand to other states.

4. Housing Affordability

Rising home prices have impacted housing affordability, which has been decreasing since the beginning of 2012. In California, the percentage of home buyers who could afford to purchase a median-priced, existing, single-family home as of the third quarter of 2015 was 29 percent according to the California Association of REALTORS® Housing Affordability Index (HAI). The number was even lower for Orange County at 20 percent. The HAI peaked at 56 percent at the beginning of 2012 and has dropped steadily since home prices started to appreciate. The median price for a home in California has doubled since February 2009, while the median price for a home in Orange County has risen 62 percent in that same period. Wages, which grew at 2 percent in the past twelve months, are not keeping pace with home price growth, so fewer people have been able to afford to buy as prices have climbed.

3. 2007 Peak versus 2016

It seems that everyone wants to compare real estate prices today with the price levels at the peak in 2007. Because I find that it is also helpful to compare the levels for other economic factors today with their peak levels, I created the chart shown in Figure 4. Other than home prices, the factors I found especially interesting were the following:

  • Interest rates. Along with foreign investment, low interest rates fueled the housing recovery. Imagine where the recovery would be if rates were still around 6 percent, as they were in 2007.
  • Housing affordability. In 2007, affordability was even lower than it is today, but the easy credit conditions offset the impact of the low affordability.
  • Oil prices. In 2007, oil prices were double what they are today, and gasoline is cheaper today.
  • National debt. The most ominous of these factors is the level of national debt, which has increased from $9.2 trillion to $19 trillion.

Figure 4. It may be instructive to compare the levels of several measures of economic activity in January 2007 with the levels of these same measures in February 2016. Perhaps most interesting in this comparison are the numbers given for interest rates, housing affordability, oil and gasoline prices, and the national debt.

2. Housing Inventories

Low housing inventories have added support to home values. Further, I do not think that inventory levels will improve significantly for the reasons listed below.

  • Some homeowners still have negative equity and cannot sell.
  • For someone selling one property and buying another or just downsizing, property taxes might be higher.
  • Capital gains taxes could be significant.
  • Some homeowners may be reluctant to give up their low mortgage rates.
  • New construction is not meeting demand, and homebuilders are underperforming with some smaller builders having trouble getting loans.
  • There is a fear of not finding an adequate replacement because of low supply and high rents.
  • Some homeowners are still affected by the 2007 crisis and are unwilling to sell.
  • Many single-family homes that might be listing candidates are now part of the rental pool because so many were purchased by investors during the past few years.

I have been compiling this list since it became clear that inventory levels were becoming a key driver of real estate values and activity. Low supplies and high demand will continue to support home prices.

And the Number One economic factor REALTORS® should be following today is—

1. Is There a Real Estate Bubble?

I hope that my discussion and analysis of the preceding nine factors will help to address the question of whether a real estate bubble is developing or not. Below is a summary of how I might expect some of the previous nine factors to impact real estate values and activity.

  • When interest rates go up significantly, there will be an impact on real estate values.
  • Wages will need to keep pace with values if housing affordability is to be addressed. Easier credit conditions (lower down payments) can also help, but lower prices are the most likely result.
  • As prices approach peak levels, some may suggest we are approaching a bubble.
  • Continued foreign investment will support prices.
  • If housing inventory levels remain low, prices will be supported.
  • As long as buying is still seen as a viable alternative to renting, prices will remain strong.
  • The homeownership rate has declined, but those renters who used to be homeowners may come back into the market as buyers, providing additional support for home prices.

In summary, these are ten factors that REALTORS® need to monitor. Many of these factors will continue to support real estate values and buying activity. Share this knowledge with you clients. They will appreciate you for it.

David Girling completed his undergraduate work at the University of Southern California and earned the degree of Master of Business Administration from the Anderson Graduate School of Management at the University of California, Los Angeles. In 2008, he formed Girling Real Estate Investment Group (Girling REIG) with his father, Bing, and has more than thirty years of experience in the financial services industry.

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