If you bought a home in Hemet three years ago, there's a good chance that you've made more money (in equity) as a homeowner than you have at your day job. But don't quit your day job just yet...

The news is pouring in from all over America: you and everyone you know will go through foreclosure this year!

Is it really as bad as all that? Will there be a Real Estate crash in 2007? Will it affect Hemet, San Jacinto, Riverside and the Inland Empire?

I recent went with the Hemet-San Jacinto Association of Realtors to the CAR Expo. CAR is the California Association of Realtors. An Expo is kind of like a convention. Well, an Expo is a convention, only it sounds a lot cooler to say "Expo" than "convention". Give it a try.

There were all sorts of great seminars there. One of the seminars had a panel of economists discussing the future of the Real Estate market.

One of the ways to size up the Real Estate market that affects you directly is the value or price of your home.

If the price of homes is going up, that's called "appreciation". It's called "appreciation" because your net worth increased $200,000 over four years and you really appreciate it.

If home prices are going down, that's called "the Apocalypse". I mean, "depreciation". But the way the newspapers are carrying on, it seems that it's the end of the world as we know it.

So at the Expo the panel of economist experts said that home prices wouldn't see any significant gains in California until about 2010.

Here's what you need to know about economists: most of them wouldn't have a job as economists if they could accurately predict the future value of Real Estate. They would be super-gazillionaires laughing at the rest of us while sipping martinis on their yachts.

It's almost impossible to time any market, whether it's the real estate market or the stock market or your local fish market.

Because I'm a home loan expert, people ask me all the time: What do you think will happen with the prices of homes? What do you think will happen with interest rates? I've learned to always preface my opinion with this statement: "Well, my crystal ball is in the shop, but if I had to guess..."

Last year, I thought interest rates would be a lot higher than they are now. Didn't you? The average 30 year fixed rate mortgage is about 6.00% today. Unless you're listening to a radio commercial from a mortgage loan company. Then a 30 year fixed mortgage is 3.5% with no points or fees and you get a free ballet-dancing dolphin.

Here's some bad news: Foreclosures are on the rise. Some of these are because many people got awful home loans in the last couple of years from unscrupulous mortgage lenders and brokers. Others took all the equity out of their home to buy yachts and martinis. But can you blame them? They made a lot more money as homeowners than as economists.

The good news:
- Banks don't want to foreclose. They'll do whatever they can NOT to have to become landowners. They like being banks.
- If you've got a decent home loan, can make the payments, you won't have to worry about it.
- If you bought your home a couple of years ago, it's a pretty slim chance that a drop in home prices will wipe out all of your gains.
- If you were "priced out of the market" and thought you couldn't afford a house, a drop in prices is going to be good for you.

Whatever happens to the price of real estate in Hemet, you can be sure that it's going to go up over time. Like they say, they're not making any more dirt.

Still, the best time to buy a home in Hemet is like the best time to plant an oak tree.... 20 years ago.


PS - Bad news about real estate is way more popular than good news online. If bad news makes you happy, check out how many of the top visited real estate sites have names like "HousingDoom" or "To Hell in a Handbasket".