In real estate, it is a well known fact that Spring is the best time for home sales. Summer may be better in the United States as a whole though. Home sales in Southern California grew almost 6% in May compared to April of this year, and were 3% higher than sales in May 2015. Besides that, there are other signs of stabilizing market in all types: short sales, real estate owned sales (REOs) and cash buyers are all down year over year, and far less than a few years ago during the height of the recession and recovery. Where the issues lie is with inventory of new home sales, which are an astounding 40% below average and with potential sellers’ reluctance to go on the market, especially for Inland Empire markets. You can see why this is a problem. With low rates and qualified, eager buyers, it makes the properties on the market rise in price due to high bidding.
The numbers don’t lie, there were 22,466 new and resale houses and condos sold last month in Riverside, San Bernardino, Orange, San Diego, Los Angeles and Ventura counties according to the press enterprise newspaper. The median price for homes in all those counties was $459,500, the highest median price for any month since since September 2007, on the eve of the recession, when the price was $462,000. So we are almost back to where we were. I think we learned a valuable lesson last time and banks certainly did. For the Inland Empire, there were 2,642 sales in San Bernardino County, an increase of 6% over May 2015, and 3,825 sales in Riverside County, up only 2.4% over last year. The median sale price was $285,000 in San Bernardino County, a nearly 12%increase from May 2015. The median sale price for Riverside County for May was $330,000, a 6.5% increase over the same month in 2015.
What about the loans? Government-insured, low-down-payment FHA loans accounted for approximately 1 in 5 of Southern California home purchases in May. Not in the Inland Empire though,the numbers were much higher for us at 31.5% percent for Riverside County and 32.9% for San Bernardino County. These numbers come directly from Corelogic. The current FHA loan limit for a single-family home in Riverside County is $356,500, compared with the May median of $330,000; in San Bernardnio County the FHA limit is $356,500, compared to last month’s median of $285,000. There is a higher percentage of homes in the IE that you can purchase within the FHA limit as opposed to the surrounding counties. This is certainly helping the real estate market out this summer in the Inland Empire.
Truth be told, there is never any way to predict how stable or unpredictable the market is. Things change quite quickly, but if you’re the type of person that believes in data, you will see that we are set up to have a great summer in the I.E. real estate market. It is a great time to buy and an even better time to sell. Lower inventory from a market where sellers are reluctant causes buyers to make higher offers and create bidding wars. Only time will tell, but it looks like Summer is going to be hot in more ways than one.