Thursday, January 19, 2006
Inland home prices draw closer to coast
This article is from the Riverside Press-Enterprise ...Median sales figures rise to record highs while
pricier neighboring counties see a slowdown.January 18, 2006By Mark KawarThe Press-EnterpriseInland Southern California home prices are rising quickly, narrowing the gap with the higher-priced coastal counties, according to a report released Wednesday.DataQuick Information Systems numbers show that while home sales across Southern California are slowing, Riverside and San Bernardino counties reported sales gains in December compared with a year ago.The area's fast-growing housing market continues to lure buyers from coastal communities looking for larger homes, according to one economist.The median home price in Riverside County reached $411,000 in December, while the San Bernardino County median price was $361,000, according to DataQuick. Both averages were records.San Bernardino County's 28.5 percent price increase over the past year was the highest of the six counties in the study. Riverside home prices increased 10.8 percent.San Bernardino County's median home price is about 58 percent of Orange County's. Riverside County homes cost 66 percent of what Orange County homes cost.DataQuick analyst John Karevoll said that Orange County homes sold for more than double the price of homes in the Inland area just a few years ago. He predicted that home prices in Riverside and San Bernardino counties could climb to as much as 80 percent of those in Orange County."There will always be that gap" between the Inland and coastal counties, Karevoll said. "There's no way Riverside and San Bernardino (counties) will ever reach the coastal counties. But the gap is narrowing."John Husing, an economic consultant who studies the Inland area, said that part of the reason that Inland home prices are approaching those of coastal counties is that new houses here tend to be larger even though they are on lower-priced land. And while housing prices are beginning to peak in coastal areas, he said, Inland prices will take longer to top out, just as they took more time to begin rising at the beginning of the housing boom."It's the way in which the cycle has typically played out in Southern California," he said. "Sooner or later, the market will reach a point where it's at an equilibrium."Inland-area home sales also increased, while home sales fell in Los Angeles, Orange, San Diego and Ventura counties.Last month, 6,305 homes were sold in Riverside County, 16.5 percent more than a year ago. In San Bernardino County, the increase was 5.7 percent, to 4,580 homes.Of the six counties in the report, Ventura's median home price was the highest, at $630,000, followed by Orange County at $621,000.The two Inland counties had the lowest prices in Southern California.There hasn't been a decline in the average price of homes across Southern California since early 1996, according to DataQuick. But Karevoll said prices are beginning to top out. San Diego County home prices will not likely rise much longer, Karevoll said.Inland prices will increase for at least another year, and probably longer, unless there is a significant economic change, such as a national economic slump, he said.Karen Nelson, a real estate agent in Temecula and chairwoman of the board of the Southwest Riverside County Association of Realtors, said she has not seen a decrease in San Diegans moving to the Temecula area who want to buy larger houses."Folks that have grown up in San Diego can't get the kind of house they want down there, so they're coming up here," she said. "The coast will always be the coast, but Temecula wasn't even on the map a few years ago. Now it is in a big way."She said that some residents of southwest Riverside County are coping with the hot real estate market by moving to Hemet or Anza to find larger properties.Last week, the California Association of Realtors released its own housing figures for November, showing similar year-over-year rises in home prices statewide.The association's housing affordability index showed that 18 percent of families in the cities of Riverside and San Bernardino and surrounding areas could afford to buy a home in November, down from 19 percent a year ago.Karevoll identified the High Desert as the fastest-growing part of the Inland area, with the Route 210 corridor in Rancho Cucamonga and Rialto, and the Temecula area as also showing strong growth.The Palm Springs/Low Desert affordability rate was 10 percent, down from 14 percent a year ago, and the High Desert figure was 24 percent, down from 40 percent.Greg Berkemer, executive vice president of the California Desert Association of Realtors, said that home buyers in the desert, used to lower-priced housing, are finding they are being forced to move to buy homes. Every year, he said, the population center of the desert moves east, away from high-priced Palm Springs and Rancho Mirage."There was a time when people wouldn't move to Indio just because it had a bad reputation," he said. "There are million-dollar homes in Indio now." Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
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