Infographic: Types of Property Purchased as Primary, Vacation, and Investment Homes in 2013

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REAL ESTATE: Demand for space forecast to continue

The demand for industrial space in Inland Southern California – and construction for all types of commercial properties statewide – is expected to continue to grow in the next three years, a study released this week said.

The report on commercial real estate from the Allen Matkins/UCLA Anderson school predicted growth would be “broad-based across all markets.” More job and income growth will mean that new offices, apartments and industrial facilities could go up across the state.

Also, increased traffic moving through Southern California’s ports will probably mean more demand for distribution centers in San Bernardino and Riverside counties. That sector already has very little vacant space, and developers continue to seek vacant land for new properties in the region.

Earlier this month, Aliso Viejo-based CT Realty Partners announced it had purchased a 17-acre plot on Jurupa Avenue in Fontana for $7.8 million and would construct a pair of distribution centers on the property, including one that will be 212,000 square feet. Construction is expected to start in November, according to a statement.

That underscores that demand exists for large distribution centers in Inland Southern California. A report on the area from Voit Real Estate Services found that 16.2 million square feet of warehouse space was under construction in the second quarter, mostly for buildings that were 500,000 square feet or larger.

Also, work on about 4.7 million square feet of space, more than double the space taken up by Skechers’ 1.8 million-square-foot distribution complex on the east side of Moreno Valley, was completed in the second three months of the year, Voit reported.

This lowered the vacancy rate to 5.6 percent in the quarter. Four years ago, when a faltering economy made the retail world nervous about getting into long-term leases on a large warehouse, vacancies were well above 14 percent.

Bob Wolf, who retired a few years ago from Germania Corp., said he expects development to continue in the Inland region.

“This is still the only place where you can find land,” said Wolf, whose company developed many of the projects in the I-215 corridor in the Moreno Valley and Perris areas.

Wednesday it was announced that one of the new distribution facilities in the Inland region has found a tenant. Yokohama Tire announced it will move into a new 658,000-square-foot facility on Fern Avenue in Chino later this year.

According to a statement, Yokohama Tire, encouraged by growth potential, wants to expand its West Coast operations. The company will relocate from a smaller warehouse in Fullerton.

“The move to the new warehouse facility is just the beginning,” Tom Masuguchi, chief strategy officer for Yokohama, said in a statement.

In the analysis by UCLA, there was a small decline in confidence from a panel of Inland-area experts that was termed “insignificant.” One half of the developers on the panel began an industrial project in the first half of 2014, but 70 percent said they plan to push a project forward in the next 12 months.

Bruce Springer, a senior vice president for Lee Associates, said as long as there is land, big-box developers and prospective tenants will be interested in the Inland area.

Interest is much less for smaller firms without the global reach of a company such as Yokahama. Springer said many of these companies are worried about the consistency of the economy, and that could continue for a couple of years.

“My sense is they’re not willing to take on more debt,” Springer said of the smaller tenants. “They just don’t want to take that risk.”

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Homeownership Rate in the Second Quarter of 2014

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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Lenders Note Impact of Higher FHA Fees

The mortgage market was buffeted by a number of changes in 2013 and 2014 among them higher fees at the FHA. NAR Research’ s second Survey of Mortgage Originators includes questions about the impact of changes to the FHA program on consumers.

Since 2010, the FHA has increased the rates it charges for mortgage insurance. On average, responding lenders indicated that 5.7% of originations were lost because of the increase in FHA fees. The distribution clustered between a response of 1.1% to 2.0% and 6.1% to 7.0%. A loss of 5.7% in sales would correlate to roughly 200,000 to 250,000 home sales lost, near the mid-point of estimates NAR Research produced in April [1].


When asked how consumers impacted by the increase in mortgage insurance rates responded to the higher costs, 68.4% of originators indicated that they had a client(s) who chose not to buy or to put off buying indefinitely. Nearly as many originators found that their client(s) were able to find funding through VA and RHS, but only 42.1% cited having success shifting their client(s) to conventional financing with private mortgage insurance. Only 15.8% of originators cited that a client(s) could absorb the losses while 10.5% indicated that they had a client(s) who waited to save for a larger down payment.


Higher fees at the FHA have had an impact on affordability. While some buyers were able to shift to other more affordable programs, many consumers were shut out of the market for ownership.


Ken Fears, Director, Regional Economics and Housing Finance

Ken Fears is the Manager of Regional Economics and Housing Finance Policy. He focuses on regional and local market trends found in the Local Market Reports and the Market Watch Reports . He also writes on developments in the mortgage industry and foreclosures.

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New Home Sales in June

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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Actor Michael C. Hall’s house is for sale

Price: $4.5 million


  • 5,618 square feet
  • 6 bedrooms
  • 6 full bathrooms
  • 0.35 acres

Actor (and “Dexter” star) Michael C. Hall has listed his Los Angeles home for sale, according to Redfin.

Hall’s home, which he bought in 2013 for $3.825 million, features a main house, plus guest quarters, “cutting” edge appliances and a pool.

If it doesn’t sell soon, he may have to “slash” the price.

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Video: Mortgage rates for July 24, 2014

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.

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National mortgage rates for July 24, 2014

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.

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Mortgage rates remain in place amid turmoil

Escalating unrest in Ukraine may also have kept down mortgage rates, which tend to track the yield on the 10-year Treasury. On July 17, a Malaysia Airlines passenger flight flying from Amsterdam to Kuala Lumpur was reportedly brought down by a missile strike from rebel separatists fighting in Ukraine, raising tensions between Russia and the West. The yield on the 10-year Treasury the day before the plane crash ended at 2.54 percent. It fell to 2.48 percent on the day of the crash as investors put more money into the safety asset. The yield has yet to bounce back.

“There could be sanctions imposed on Russia, and that will have an economic impact on Europe,” says Guy Cecala, publisher of industry trade publication Inside Mortgage Finance. “When there is concern about the euro, that generally puts downward pressure on rates.”

Another unrelated global influence on mortgage rates is the Chinese government, which increased its purchases of U.S. Treasuries this year at the quickest rate on record, according to government data released last week. The country upped its holdings of Treasury debt by $107.21 billion in the first five months of this year and now holds about 10.6 percent of the $12 trillion U.S. Treasury market, according to federal data.

Don’t leave out the Fed

The Chinese Treasury shopping spree comes as the Federal Reserve continues to scale back its purchases of Treasuries and mortgage-backed securities, a program it employed during and after the recession to lower interest rates and boost economic activity. In its past five meetings, the Federal Open Market Committee, the Fed’s monetary policymaking branch, has reduced purchases by $10 billion and is on pace to conclude the program by its October meeting

Last week, Fed Chair Janet Yellen reiterated that the FOMC won’t raise the federal funds rate, a key benchmark rate for business and consumer loans, including mortgages, for a “considerable time” after the bond-buying program ends.

“The message is sometime, but not tomorrow,” says Cecala. “And that’s keeping rates low, too.”

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REDLANDS: Mall sold; buyers intend to add residential units

A San Diego-based investment company has purchased the Redlands Mall with an eye toward adding residential units to the downtown facility, a city spokesman said Wednesday.

Brixton Capital, a branch of investment firm Brutten Global, has closed escrow and acquired the property, which has been closed for four years, for an undisclosed price. The enclosed mall is located on 11 acres bordered by Orange Street, Redlands Boulevard and Brookside Avenue.

According to the city’s statement, Brixton Capital plans to convert the mall to a mixed-use development that includes both residential and retail development.

The seller of the property, the Howard Hughes Corp., acquired it in 2010 in a spinoff deal as part of a bankruptcy reorganization plan filed by General Growth Properties, which also owned several other Inland Southern California retail properties. The mall had been having trouble attracting tenants for years.

The only business operating in the mall building now is a CVS Pharmacy, which has an outside entrance. Also, a separate building on the property houses a Denny’s restaurant, a Mattress Showroom and a Union Bank branch.

The mall has more than 173,000 square feet of space that can be leased, and the freestanding building has an additional 12,586 square feet.

According to its website, Brutten Global, which was founded in 1978, specializes in “out-of-favor, inefficiently operated, often overlooked, somewhat contrarian assets across a variety of investment classes.”

The company’s portfolio includes retail properties and apartments, and it was an investor involved in the purchase of the NBA’s New Jersey Nets team in 2004. Brutten Global has holdings in 16 states and four foreign countries.

Contact the writer: 951-368-9553 or at

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