Welcome to another edition of the REALTOR® Report! It’s hard to believe that we’re already through the first quarter of 2023, and things are far from slowing down. The housing market has definitely seen its share of challenges, some of which will be sticking around for a while, but the data for March 2023 shows some very positive news for Southwest Riverside County! Unit sales are considerably up, median prices are slightly up, and days on market are down by almost 50%! The question is, will we continue to see this trend, or is this just an anomaly? Maybe a little of both. I think people have started to accept that mortgage rates are most likely not going back to the sub-4 % range, and sellers are more realistic about setting their price point for selling. These things make for a much more balanced market. Many people with a record low-interest rate are probably not looking to trade that in for today’s rates, which keeps inventory tight and brings back some competition to the market. In speaking with some agents, both in and out of the area, multiple offers and offers above the asking price are becoming fairly common again, but in a healthy way. Specifically, it’s not like we were experiencing a couple of years ago when buyers were paying way above the asking price and waiving all sorts of inspections. Our State economist recently gave an update, and he forecasted a continued flattening/dip in prices for 2023, with an expected uptick in appreciation for 2024.
I want to note something affecting median home prices, locally and statewide. That is the reduction of sales in the higher price points. Sales overall are improving in the lower and middle-priced homes but are much slower in the upper-sales-priced homes. This reduction at the upper level will affect the median prices, which may explain how we see decreases in median prices but increases in sales. For the cities I cover in this report, 212 homes sold above $750,000 in March of 2022, while only 87 sold at the same price level in 2023.
For now, let’s take a closer look at the numbers for our region from March 2023.
The median home price in Southwest Riverside County increased 1% from the previous month ($560,000/$555,000), but it remains down 6% from a year ago ($593,378). Comparing the median price to where it was 2 years ago, it has increased by 12% when the median price was $500,000. Unsold inventory dipped to 3 months (6 months is considered a healthy market), and the median time on the market decreased again by 44% to 23 days. This is up from 8 days last year and significantly higher than 2 years ago when it was just 5 days. Unit sales increased an impressive 31% from the previous month but are down 36% from last year. Unsold inventory decreased again from the previous month by 14% but is up from last year, with an increase of 28%. Median prices declined in all but two cities in the region, with a total median price variance from -12.6% to 0.6%. Total sales volume also significantly increased in March by almost $120 Million!
On the legislative side, we are reviewing all 2,749 bills that have been introduced. On my trip to Sacramento last week, it was reported that our State Association is monitoring close to 800 that affect real estate. Additionally, it has been reported that as many as 40% of the bills introduced are considered a spot bill, or gut and amend bill, meaning it’s more important now than ever to keep a close eye on things. From the real estate perspective, we continue to see bills attacking Prop 13, bills seeking stricter rent control, and more bills geared towards tenant rights rather than property owner rights. As I’ve mentioned before, we continue to play more defense than offense, but it’s not all bad. There are bills dealing with water and water storage, bills offering more education and resources about property rights and estate planning, and of course seeking more funding available for housing. Additionally, the federal bill that would increase the capital gains exemption is also receiving positive feedback and seems to be moving along in the right direction.
I was excited to announce a new loan program that offered up to 20% down payment assistance called the California Dream for All program. This program was established to offer down payment assistance to first-time buyers that wouldn’t need to be paid back until the property was sold. It might not be the best solution for everyone, but for some, it could be the way into finally purchasing a home. $300 Million was earmarked from the program, which went live on March 27. Unfortunately, as of April 6, there is no more funding available. I am unsure if any additional money will be made available soon or if the program will be expanded. Initially, we were hoping for $500 Million to be made available. One thing is adamantly clear, and that’s that programs like this help! I encourage you to contact your lender and visit https://www.calhfa.ca.gov/dream for more information.
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…