Westcoe Realtors, Riverside California…OK, so two months are not exactly the equivalent of a trend, but we can comment on what is happening so far in January and February of this year, 2012.
Let’s talk inventory first. In a nutshell, it is down. The numbers of homes available for sale in Riverside on March 1, 2012 as compared to March 1, 2011 is down 37%. That is a huge change in the amount of homes a potential buyer has to look at. If you compare March 1, 2012 with just a couple of months ago (January 1, 2012), our inventory is down almost 15%. It’s still way to early in the year to make any predictions from this data, so we will just have to wait and see what the spring brings.
The banks say they have more inventory on the way (code for all their potential foreclosures), but we stopped believing anything the banks say a long time ago. Short sales are on the rise, and regular “standard” sellers (those sellers with equity) are increasing some as well. We will need a few more months to see where all this settles out, but for now, the homes for sale are definitely fewer than at any time last year.
As for pending sales (those homes in escrow, but not yet closed), for the first two months, they are up 8% as compared to the same two months of 2011. This is not unexpected by those of us who live this real estate market every day, as we have definitely seen an uptick in the number of buyers in the market. We think this is a result of both the much more affordable home prices, and the super-low interest rates available for these buyers. Don’t forget…FHA financing is open to almost everyone, and only requires a 3.5% down payment. Not bad…especially when you get a 30 year, fixed rate at around 4%. No more rent increases!
Lastly, the closings for January and February are also up compared to last year…by 17%. This too is expected with the increase in buyer demand. Closings are usually about 60 days behind the pendings, but they don’t necessarily go hand in hand, due to the longer time it can take to close a short sale. It is almost impossible to predict closing sales from the pending sales statistics, but it’s just nice to see that whatever the ratio, it is up for 2011.
So…the bottom line? Simple…we expect 2012 to be a better year than 2011 (better rates, prices, economy, etc.), and so far, so good. Remember, we have said many times that this recovery will not be a huge “V”, but more like a “U”, in that sales and prices will creep up very slowly. However, while we cannot get too carried away with a couple of better months, it’s sure nice to see us headed in the right direction.
Take care, thanks for reading, and stay tuned…hopefully there is more to come.