Welcome to another edition of the REALTOR® Report! At the risk of sounding repetitive, the real estate market continues similarly to the previous months. Home prices remain relatively flat, although some cities had double-digit median price increases. Inventory and affordability remain challenging, as demonstrated by the lowest sales volume since February 2023. I will go into that deeper later in the report.
Thankfully, there are a lot of other things to cover this month. Let’s talk about the economic impact of selling a home in California. I have shared this information before, but thanks to a recent Press Enterprise article reminder, I want to go into a little more detail. According to the National Association of REALTORs®, the economic impact of every home sale in California is an astounding $249,000. (See final page) A pretty impressive number if you ask me, and an obvious reason why the housing market plays such an essential role in local, State, and National economics. Now, think about the impact when sales are down. Almost everyone knows that it’s challenging times to be a REALTOR®, but how many people think about the ancillary services? When real estate is slow, so are loan officers, home inspectors, title and escrow offices, contractors…the list goes on and on. I show the total monthly sales volume to indicate the business happening in every city. This is just a reminder of how important real estate sales are and hopefully a reminder of why I share the data with all of you.
What does this mean for you? If you are a REALTOR®, hopefully, it’s a reminder to stay busy, connect with old clients and business partners, and continue marketing yourself. If you are selling or considering selling your house, have a plan because things will likely happen quickly for you. As a buyer, you must have your ducks in a row, working with your REALTOR® to create a solid offer. The market remains competitive, and being adequately prepared can be the difference between a successful and a challenging experience.
Let’s take a closer look at the numbers for our region from September 2023.
The median home price in Southwest Riverside County took a minor hit, decreasing by 2% from the previous month ($580,000/$589,900) and improving by 1% from one year ago ($573,000). Comparing the median price to where it was 2 years ago, it has increased by 8.4% when the median price was $535,000. Unsold inventory has increased to 4 months, getting closer to the 6 months that is considered a healthy market. The median time on the market was 15 days, down from 22 days last year and double the time 2 years ago when it was just 8 days. Unit sales were down by 17% from last month and remain down 22% from last year. Unsold inventory was almost flat from the previous month, with a 1% decrease, and remains significantly down from last year, with a decrease of 41%. Median prices expanded the range in price in our local cities, with a total median price variance from -10.0% to 13.3%.
On the Legislative side of things, we continue to be very busy. The legislative session has ended, and many bills are still awaiting action on the Governor’s desk. As a reminder, the Governor can sign the bill into law, veto the bill, or do nothing, allowing it to become law without his signature.
Two ballot initiatives that I have previously reported on were passed and will appear on the November 2024 ballot. ACA 1 seeks to lower the voting threshold on housing and infrastructure bonds to 55% rather than the current 2/3rds requirement. ACA 13 is an indirect attack on Proposition 13. I say indirect because nothing in the bill explicitly references Prop 13, but it does open the door for future attacks. While somewhat complicated, ACA 13 would make it easier to get rid of Prop 13 and almost impossible to reinstate. ACA 13 was initially slated for the March ballot but will now appear on the November ballot. There are lots of moving parts on this one, so stay tuned.
Another significant change for California is SB 696 (Portantino), which allows for online notarization. Online notary services have been utilized in many other states for a few years but have never been permitted in California. Like most others that get signed, this bill goes into effect on January 1.
Additionally, we got some good news on homeowner’s insurance. Commissioner Lara announced last week a set of executive actions that will transition homeowners from the FAIR Plan back to the normal insurance market with commitments from insurance companies to cover all parts of California, including high wildfire risk. The FAIR Plan also expands coverage to homeowners associations and condo developments by $20 million per building. This is a much-needed help for homeowners in California! For more details, contact your insurance representative or visit https://www.insurance.ca.gov.
I don’t mention a lot about Federal issues, but I would be remiss if I didn’t mention the National Flood Insurance Program. You might not think that’s a big deal in California, but almost 3,000,000 homes in California are in a high or moderate flood risk area. With the government shutdown looming, so is the NFIP. We got a short extension until November 17, and we are diligently working on a more permanent solution. If this sounds familiar, that’s because, since 2017, the NFIP has been extended 25 times!
I told you it was busy, and 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 detailed 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…