Welcome to another edition of the REALTOR® Report! Happy New Year, and welcome to 2024! I hope you all had a wonderful holiday and are ready for what’s sure to be a busy and exciting year ahead. I would also like to congratulate the newly appointed Mayors and Mayor Pro Tems! I look forward to continuing to work with you, your council, and your city staff to continue our conversations around housing and to keep all housing a priority and a successful part of our economy.
As we close out 2023, it shouldn’t be a surprise that we had one of the slowest sales years for unit sales. Even though this report only covers single-family homes, I have drafted a chart showing the historical data for sales of all property types, dating back to 2017. Our region has grown significantly during that time, and the need for housing development continues to be a challenge. You can see that 2023 sales were down 24.55% from the previous year. When you look at this decrease in sales, it should help explain the increase in median prices for our area. With fewer homes available and demand still present, prices remain steady or increase even with the interest rate challenges we had in 2023.
Speaking of interest rates, we finally saw a drop in mortgage rates after months of increases! Today, rates are generally in the upper 6% range and have already brought back some buyers into the marketplace. However, this may also drive up prices even more. Inventory is still tight, and more potential buyers will generate more competition among buyers. The lower rates are beneficial, but you should be aware that it may not make things that much more affordable if prices continue to rise. Once again, using an experienced and reputable REALTOR® is extremely important as you prepare to sell and/or purchase a home.
Let’s take a closer look at the numbers for our region from December 2023.
The median home price in Southwest Riverside County dropped by less than 1% compared to the previous month ($581,191/$583,280) and improved by 4% from one year ago ($558,000). Comparing the median price to where it was 2 years ago, it has increased by 2.7% when the median price was $565,000. Unsold inventory is holding steady at just about 4 months, getting closer to the 6 months that is considered a healthy market. The median time on the market increased again to 26 days, down from 35 days last year but up considerably from 2 years ago when it was just 10 days. Unit sales slightly increased 3% from last month but are down 4% from last year. Unsold inventory decreased from the previous month by 12%, and it remains significantly down from last year, with a decrease of 26%. Median prices were up in every city covered in my report, with an increased range of 1.4% – 14.2%.
On the legislative side of things, we have a few new laws that impact housing. These laws address restrictions and/or exemptions for housing development, deal with ADUs, address environmental restrictions, and a few are related to tenant rights. Unfortunately, nothing addressed the regulatory costs associated with building homes, which would immediately help lower the cost of new developments. While we will continue to advocate for this, we will likely play more defense against bills again in 2024.
Our State Legislators reconvened this week, and in just 2 days, 50 new bills have already been introduced. With many more to come, plus those that weren’t approved or killed in 2023, along with an earlier Primary Election than usual, 2024 is off to a quick start, and I imagine it won’t slow down until after November.
Rest assured that I will do my best to keep you updated as much as possible. Please feel free to contact me if you have any specific questions about what’s included in my report or even what may not be included.
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…
Adam A. Ruiz
Government Affairs Director
Southwest Riverside County Association of REALTORs®
