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So Long, Farewell, Auf Wiedersehen, Adieu…

Comes a time when we all must exit stage right, one final bow to the audience, and ride off into the sunset. For me, that time is now. After nearly 3 decades monitoring our local real estate market and more than a decade sending out this compendium of all things housing, and burdening you with my witticisms, opinions and prognostications, this is it. Retirement beckons so in the future this report will be delivered by fresh voices in an updated format. 

Most of you know that Walter Wilson has been supporting our I-215 corridor cities, and effective April 1, Adam Ruiz will be supporting our I-15 corridor cities (no, that‘s not an April fool joke). So thanks for coming along.  I‘ve certainly enjoyed our little visits and hope you have too. I‘ll miss you. I‘m happy to be finishing this on a high note as the market is absolutely on fire. I‘ve chronicled us through the great crash of 2009-2010 and charted the ongoing recovery and I‘m glad we haven‘t crashed again (yet) so I can take credit for this great market expansion. 

Somebody else will walk us through the next correction. If anything, the market is picking up speed, and that may not be a good thing. We‘re running out of houses to sell, though hopefully that will ease a little heading into spring, and eventually we‘ll run out of money, interest rates will start to climb and things will slow back down to a more reasonable pace – maybe even correct a little. So much is out of our hands when it comes to federal and state policy, pandemic relief, mortgage forbearance and eviction moratoriums, that when this all grinds to a halt, who knows exactly what will be left.

But for now we‘re golden. Month-over-month sales were down about 3% (815 / 787) but still higher than last February (743) bringing our year-to-date sales up a solid 11% ahead of last year (1,422 / 1,602). That‘s the strongest start to the year since 2010 (1,832) and, at least for now, shows no sign of slowing. Our inventory shrank a little lower in February, down another 3% month-over-month (552 / 517) and down a whopping 2/3 from last February (1,502). 

For most cities that‘s literally a 3 week inventory, down from an already paltry 2 months a year ago. Remember that a market in balance is considered to be 6 – 7 months so you might say our market is significantly unbalanced in favor of Sellers right now. That‘s why you hear anecdotal stories of homes getting 15 or 20 or 40 offers within hours of hitting the market, including some offers before hitting the market (thanks to a new ‚coming soon‘ category). The average home is staying on the market a scant 6 days before being snapped up, down 71% from the 29.6 days it took to sell that house last year.

So again, what happens when you have strong demand chasing limited supply? That‘s right, prices go up. Median price across the region was up 2% month-over-month ($466,065 / $477,361) but up 15% over last February ($405,560). Year-to-date median price was up 15% as well ($400,374 / $471,708). 

If when the pandemic threat is reduced and more sellers are comfortable putting their homes on the market, that may reduce some of that price pressure. New construction will take some of the pressure off as well, and eventually interest rates will creep up too. They were up a little last week but still sub-3% so the incentive remains even though price appreciation is moving affordability further and further out of reach for some buyers.

Most of our cities have finally recovered from the precipitous drop they experienced in 2009 – 2010 and are establishing new benchmark prices. Spurred by 20 sales in excess of $1,000,000, Temecula set another average price milestone in February stretching above $700,000 for the first time ever ($707,108) and a median price of $605,000. With 13 $1 million+ sales, Murrieta‘s average price hit a new high as well at $660,354 with a median price of $550,000. With the exception of Canyon Lake, where prices fluctuate so wildly it‘s hard to compare, every city across the region experienced double digit price appreciation over last year. 

With pending home sales up 10% coming into March and inventory at the lowest level ever for our region, upward price pressure should be with us for the foreseeable future. Well, as Porky Pig used to remind us “Th-th-th-that’s all folks!” Walter and Adam will be around to answer your housing questions from here on and guide you through the challenges that most assuredly lie ahead. 

Thanks for everything. It’s been quite a ride.

Gene Wunderlich is Vice President, Government Affairs for Southwest Riverside County Association of Realtors.  If you have questions on the market, please contact me at GAD@srcar.org.   

Written by Gene Wunderlich, Sr. Staff Writer

Gene Wunderlich is the Government Affairs Director for Southwest Riverside County Association of Realtors. If you have questions on the market please contact me at GAD@srcar.org or to keep up with the latest legislative and real estate trends go to http://gadblog.srcar.org/.

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