Today is also Election Day, and I hope you exercised your right to vote. As I always say, you can’t complain if you don’t participate! Before we jump into the numbers, last month, I wrote that our National Chief Economist was optimistic that we were not headed into a recession mainly due to the strength of the job economy, specifically the number of jobs available. Since then, we have seen inflation numbers continue to rise, and talks of a recession are becoming much more common. I am sure you are feeling it everywhere…at the gas pump, grocery stores, retail shopping, etc. We know that housing plays a big part in our economy so let’s jump right into the statistics for our region.
The median home price in Southwest Riverside County held steady from a month ago ($600,000), was up 13% from a year ago ($530,000), and up an impressive 44.6% from 2 years ago ($415,000). Unsold inventory is still hovering just over 2 months (6 months is considered a healthy market), and days on market increased again from last month to 8 days, up from 5 days last year but still significantly lower compared to 18 days 2 years ago. Unit sales dipped 4% from the previous month and 3% from last year. Unsold inventory saw another increase of 24% from last month and is up an incredible 88% from last year. However, I must remind you once again that we are nowhere close to the inventory levels we need to be. Median prices are up in all of our local cities, ranging in an increase of 1.9%-25.5% Year-Over-Year.
While we are still seeing solid numbers across the region, things are definitely cooling off. Many of our cities saw a dip in median sales price from last month, but all are still showing an increase year over year. Additionally, the closed sales price is just over 2.25% higher than the list price in the region as a whole. We expected to see some cooling, so I wouldn’t be alarmed. Our shortage of inventory will still keep demand alive, which in turn keeps prices up.
I have mentioned before that we have some supply help on the way. We hosted a City Managers breakfast for Hemet, San Jacinto, Perris, Moreno Valley, and Beaumont last month, and I am happy to report that those cities have over 14,000 units either approved for construction or already under construction. Additionally, Lake Elsinore has over 20,000 units in the entitlement plan, as presented to a local group of business leaders last week. All of our cities understand the need for more housing, and developments remain strong throughout the region.
On the Legislative Front, we had another big win defeating AB 2050 (Lee and Carrillo) which would have forced property owners to stay in the rental business for at least 5 years before seeking to use the Ellis Act to go out of business. Another example of an overreach by Sacramento, which does nothing to help with increasing supply. Crossover, the date when Bills must pass out of their house of origin, has passed. As a result, some Bills that we have been monitoring have died. We continue to monitor close to 50 Bills that have some effect on housing in the State.
Things aren’t slowing down, and the next few months will definitely keep me on my toes.
If you’d like a copy of my entire report including the mentioned slides, or to be added to the distribution list, please email me at Adam@srcar.org.
As always, I am available if you have any questions about the report. Until next month…