I can’t believe we’re already in February. There has been a lot of talk about the housing market recently, including social media and news sources. Interest rates have declined, and housing prices are softening as a result of a less competitive market. This helps improve affordability and is bringing some buyers back to the market. I’ve even been reading about multiple offers on a home coming back into play. Is this a reality or applicable to our region? Unfortunately, I’d have to say no. While some of those things are true, the data for our area still paint a different picture. However, I will remind you that my report covers the last closed month, which represents contracts that were signed potentially 2-3 months ago. So there is some lag time, and we may see some of the benefits I mentioned coming soon.
For now, let’s take a closer look at the numbers for our region from January 2023.
The median home price in Southwest Riverside County dipped 2% from the previous month ($545,000/$558,000), is down 4% from a year ago ($565,000), but was up 17.2% from 2 years ago ($465,000). So even though there has been a recent decrease, if you purchased your home 2+ years ago, you are still seeing positive growth in your home’s value. Unsold inventory remained at 4 months (6 months is considered a healthy market), and the median time on the market increased again from last month to 42 days. This is up from 13 days last year and significantly higher than 2 years ago when it was just 7 days. After a slight recovery last month, unit sales dipped 9% from the previous month and are down 46% from last year. Unsold inventory decreased again from the previous month by 12% but is up from last year, with an increase of 36%. Median prices showed more decreases than increases throughout the region, with a total median price variance from -16.2% to 5.6%.
I know that’s not the most uplifting news to read, but it’s not all bad. Mike Fratantoni, Senior Vice President and Chief Economist for the Mortgage Bankers Association, recently said, “Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.” Nationally, first-time homebuyers represented 31% of all buyers, up from 28% a month ago. So it would appear that there’s some light at the end of the tunnel, especially for first-time buyers.
I don’t have much of a legislative update for you at this time. Bills are still being introduced and have an introduction deadline of February 17. At that time, I’ll be diving in with our State lobbying team to see what we need to be aware of for both support and opposition. Once that happens, I’ll be sure to keep you updated and informed.
I hope I have covered everything that affects you and your business. Please let me know if I left anything out or if you need anything explained further.
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…