Thursday, December 14, 2006
Riverside County home prices up, but number of sales down
Wednesday, December 13, 2006
By LESLIE BERKMAN
The Press-Enterprise
Inland home sales are way below the peak they hit a year ago, but in November the median price of a home in the region reached a new records.
Last month, the median home price hit $426,000 in Riverside County, up more than 5 percent from a year ago, and $380,000 in San Bernardino County, up almost 9 percent.In the same time, home sales dropped almost 36 percent in Riverside County to a total of 3,794, and almost 27 percent in San Bernardino County to 2,926."The fact we still have increasing prices is something we find surprising," said John Karevoll, analyst for DataQuick Information Systems, which released the November housing statistics Wednesday.DataQuick had predicted appreciation in the Inland region would halt by the year's end. Karevoll said the organization, which monitors real estate activity nationwide, still anticipates Inland prices will peak in the next couple of months and then decline, most likely by 2 percent to 3 percent.Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange, said he believes median home prices in the two counties are being propped up by sales of new homes, which generally cost more than resale homes. He said builders struggling to sell completed homes have been trying to avoid lowering prices by offering other incentives, including free upgrades and below-market financing.Despite Inland Southern California's rising median prices, Adibi said the value of a typical house probably has not increased when the incentives are factored out.
"We are going through an adjustment process, and ultimately these appreciations will turn negative," Adibi said. "We believe it will happen early next year."Chapman's Anderson Center has predicted prices will decline an average of 4 percent in Riverside and San Bernardino counties in 2007.Steve Johnson, a director with MetroStudy, a Riverside consultant to home builders, said he believes the Inland region's median home prices are staying higher because the more expensive homes are selling better.He said sales of midpriced homes are suffering because people are having difficulty selling their own homes to move up. Also, he said, there is a limited supply of cheaper entry-level homes. By contrast, sales have remained relatively strong in homes priced $600,000 and higher.Johnson said builders already have made major concessions this year to sell their homes, and he predicted prices will fall on the resale market in 2007. He said he expects that people who are forced to move for a variety of reasons, from job relocations to divorce, are waiting until the holidays are over to get the best price they can for their homes but will ultimately drop their demands.Karevoll said that although the market has taken a sharp correction from the buyer frenzy of a year ago, from a historic perspective it is still no worse than normal. He said although sales have slowed considerably in Southern California, sales in Riverside and San Bernardino counties were still above average for November."There is price appreciation at a moderate pace and homes are available for sale and there is no urgency among buyers, but they are still buying," Karevoll said.Still uncertain is whether adjustable-rate mortgages will have a significant negative impact on the market. Karevoll said it will become clearer next spring when many of the ARMs will reset at higher interest rates."It is hard to predict homeowner behavior, to what degree people who get in trouble fail or just tough it out," he said. Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
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