by Gene Wunderlich
As I look at our housing sale chart for the past few months, it looks for all the world like a Magic Mountain Roller Coaster Ride – one of the scary ones. Our single city sales have spiked from 230 units per month to 120 the next, back up to 210, drop back under 100. It’s a dizzying ride and one that defies short-term forecasting in any meaningful sense.
By the numbers, April sales were down 15% from March and 14% under where they were a year ago. When taken together, single family sales were down 9% from the same period last year but 10% ahead of where we were in 2009, which turned out to be a record setting sales year.
The reason for that is in 2009 we had a weak 1st half but a gangbuster 2nd half – thanks to the First Time Homebuyer Tax Credit. 2010 was just the opposite with a strong 1st half but a weak finish after the tax credit expired mid-year. This year we’re about the middle of the road with no stimulus – the market is making itself. A traditionally strong summer buying season will dictate whether this is another one for the record books or just another one. The national forecast is for a strong 2nd half this year with a 4% increase in housing sales over last year. We’ll see.
Temecula home sales are down 14% from 2010 but 17% ahead of their 2009 pace. Murrieta is down 18% from last year and Lake Elsinore is down 19% this year but right on track with their 2009 volume. Median prices across the region remained fairly static. Regional median was down 4% month over month to $228,149, but up 1% over the same period last year. Temecula’s median price is up 3% over last year to $299,933. Wasn’t it only yesterday when it was a robust $575,935?
Murrieta’s median is also up over last year by 2% to $266,240. Who remembers when it hit $576,224? Wildomar prices are virtually even with a year ago at $222,745 while both Canyon Lake and Lake Elsinore prices slid a few percent the past year. Lake Elsinore’s median home price at $172,837 almost mirrors the U.S. national median home price of $170,000.
Activity remains brisk this spring with buyers trying to jump through the hoops of loan qualification to take advantage of these record low prices and interest rates. If you read my front page article you know that our government is doing everything in their power to make qualifying for a loan even tougher putting home ownership further out of reach for many well qualified American families.
If you’re still on the fence waiting for prices to drop even further, you should take a hard look at the numbers. Our prices have been relatively stable to slightly increasing over the past 2 ½ years. The worst of the foreclosure market has blown past us and, while we will continue to have distressed properties for at least the next two years, the pendulum has shifted from bank owned homes to short sales, which typically command a higher price than bank-owned’s.
The opportunity to purchase a home for under $200,000 with 3½% down and under 5% interest will be little more than a nostalgic memory by this time next year. Oh, the market won’t be rocketing along like it was in 2004 anytime soon, but once the momentum starts Folks, you’ll sit back and enjoy the rise if you’ve acted accordingly. Or you can just grin and bear it when your landlord sends the rent increase. Of course that’s just my opinion, I could be wrong.