2012 Ends with Numerous Year-End Closings in Southwest Riverside County

The year of 2012 ended with the most activity in southwest Riverside since the peak of activity in 2006. In December alone, public homebuilders closed on over 900 lots. The lot condition ranged from finished lots to unimproved mapped lots. One of the year end highlights of 2012 were two tentative map lot projects contained within the Temecula School District boundary with Land Advisors brokering the sales. The two maps combined to generate over 300 lots and were bought by two public homebuilders.

On the apartment front, a notable fully leased apartment complex is in escrow at a rumored sales price of +/- $215,000 per door.  While this per door number might seem low when compared to the coastal market, the comp will represent the highest per door sale since 2008.

The above transactions are a result of a number of factors from low interest rates to lack of housing supply available to both buyers and renters. In 2012, we saw a decrease in foreclosure sales as well as REO sales and higher sales volume all together when compared to 2011. As we move forward in the New Year, home sale prices are forecasted to receive upward pressure because supply is expected to remain flat.

Source: Mitch Casillas, Marketing Consultant, (949) 852-8288 ext. 23

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The American Dream… Renting in the Central Valley?

As the Central Valley land and homebuilding market continues to slog through foreclosures, short sales, and tepid new home sales, many potential homebuyers are waiting out the current real estate cycle until real signs of economic growth emerge.  

  • According to Affiliated Appraisers, the median sale price of a single family home in Kern County rose 0.8% to $132,000 from September to October this year, but decreased by 2.2% year over year.
  • The number of foreclosures dropped 9.9% from September to October of this year, and is down 36.1% since October 2010.
  • October saw 522 closed homes sales (new and resale) throughout the County, down 11.4% for the month and off 7.1% for the year.
  • Properties owned by lenders account for 40.5% of all sales compared with a national average of 30.1%.

Due to the lack of confidence in the economy and homebuilding market, many would-be homebuyers are now turning to renting instead of buying.  According to RealFacts, many potential buyers with good credit who can afford to purchase a home now are electing to wait on the sidelines, and rent an apartment or townhome for a while instead.

Indicative of demand, average monthly rent in Kern County rose 2.8% in the third quarter 2011. The County had the 16th highest rent of 24 metropolitan statistical areas in California.  Its 98% occupancy rate earned it the State’s No. 4 spot on occupancy.  Over the last 3 quarters, rent for two-bedroom townhomes in Kern County increased by 10.7% compared to the previous three quarters.

Kern County is following a pattern typical of inland communities and other tertiary markets… They tend to be the first to collapse and the last to recover.

Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 x14