We are seeing a definite shift in the housing market. Some of my educated sources have been telling me that they are going to hold off on buying investment property for a little while. The lack of available housing throughout Southern California is starting to catch up with the Inland Empire. High demand and low inventory are driving up prices in the IE, so it is quickly becoming a seller’s market. The Pending Home Sales Index showed a 1.7% statewide decrease in March from March 2015 and sales in Southern California were down 0.3% percent from a year ago. Los Angeles didn’t get hit as hard but Orange County got hit a lot harder. I know I mention those two counties a lot, but their activity directly affects us in the Inland Empire. With people not being able to buy in certain cities, it may push them to bordering cities in other counties. Since the Inland Empire has a much lower median home price and cost of living, those border cities are probably here.
Between the two counties in the IE, Riverside County than San Bernardino County. One factor might be people being driven out of coastal communities in LA and Orange counties by high prices and heading inland for more affordable options, thus pushing up prices here. With that said, our Northern Coastal county, the San Francisco Bay Area saw the biggest yearly drop, 3.7%. Month to month, pending home sales rose 12.7 from February to March. But when seasonally adjusted, home sales actually dropped 1%. That could also effect us because there is a lot of data to suggest that coming down south could actually improve one’s quality of life. I know it is a hard change for some people to make but the truth of the matter is that with so many companies building warehouses and other large centers, the opportunity for jobs is increasing. The Inland Empire is currently leading Southern California in terms of industrialization and job opportunities.
Here are some more interesting facts about the local market. The number of homes selling above asking price rose to 34% in March, to its highest level since July. The number of homes selling below asking price dropped to 33%. Half the properties received multiple offers. The average for March was 3.3 offers. Lack of inventory was the biggest concern of 40% of real estate agents surveyed. Decline in housing affordability was the biggest concern of 18%. So people are certainly out there looking for homes, but the choices that they have are becoming some serious competition. With the houses being sold receiving over 3 offers each, that can cause prices to rise quickly. Lower priced homes are going to be moving fast for more than asking price.
If someone has been seriously considering selling their home, right now is a great time to do so. With competition comes opportunity. A good real estate agent is going to give you current real market value, but that value can quickly rise as other homes in the neighborhood sell. The value you put your house on the market for right now, may be accurate, but a motivated buyer that is trying to beat out the other offers will quickly offer more if it gives them a chance to secure a home that they want. When inventory is low, especially in desired areas, prices rise quickly and someone who has been thinking about selling should certainly capitalize. Timing is everything in Real Estate!