Riverside Area Real Estate Market Update Two Months into 2010

Westcoe Realtors, Riverside California…OK…so we are two months into the New Year, and enquiring minds want to know: what is happening with our local real estate market?  And the answer is…..(envelope please)…exactly what was happening in the past few months of 2009.  In a nutshell, there is little change.

In the latter months of 2009, the huge issue with local real estate was the dirth of bank foreclosures that were making it onto the market for sale.  Everyone knew there were tons out there in the pipeline, but they had not reached the market.  Optimists hoped for a flood of inventory that would allow the massive demand for homes we are experiencing to balance the market, while skeptics remained convinced the big banks would continue to manipulate their repossessions in order to present a “best case” set of books to Wall Street.  And who is right?  Who wins?

So far, the skeptics.

The available inventory on March 1 is up slightly from that of January 1 (1115 homes for sale as compared to 1034), but that gain in homes for sale is not enough to start shouting “trend” at the top of one’s lungs.  Also, the number of homes that entered escrow in January was identical to the number of homes in February…at 400 homes. 

The pending sales at 400 is up from the last few months of 2009, but that is to be expected, as the holidays is traditionally a slower time of year for real estate sales.  If you go back to September and October pending sales of 2009, the pending numbers are 483 and 415 respectively…which again means the beginning of 2010 looks a lot like the last few months of 2009.

So…what does all this mean?

For now, it means that the planes are still circling the airport, but none are landing.  Of the large amount of properties that have had a Notice of Default filed upon them (the first step of the foreclosure process), very few are ultimately hitting our market.  What the future holds depends upon whom you talk too…but there are so many varied opinions on what is happening with this potential bank inventory that the only clear picture is that no one really knows.  The future with regards to the availability of bank repossessions is a guess, and nothing more.

On the demand side, here in the Riverside area, we are still gung ho with all the people who desire to purchase a home at the reduced rates of our current market…but our problem is that they are all fighting over the same pieces of cheese.  We have no problems that about 1000-2000 homes for sale wouldn’t cure, but for now, we will take what we can get…and what we are getting is the slow dribble of homes that are coming from the banks.  Combine these limited bank repo’s with the ever frustrating “short sale” market (think shopping without knowing a price or availability…and taking months to get an answer) and a few ”normal” sellers, and you’ve got a pretty clear picture of what we deal with on a daily basis.

In the end, we will adjust…we always have.  And eventually, the market will swing towards a more balanced arena between buyers and sellers.  It’s just that it hasn’t happened yet in the first two months of 2010.  Stay tuned, and we’ll see what comes next.