Inland Empire Real Estate

Inland Empire -The decision to buy now or wait gnaws at your brain the way puppies chew grasstops. Before you go cold inside with the new knowledge that you were stupid because you followed the expert with the Queen Mary hair, follow this simpe dictum: Know YOUR Market … Ignore the Rest.

But how do you know your Inland Empire real esatate market? Whether you’re looking to buy real estate in Moreno Valley, Riverside, Corona, Temecula, or Murrieta, there are 5 numbers that can go a long way towards helping your inner puppy teeth.

1. Own versus Rent Index
2. Unsold inventory
3. Price declines

Own versus Rent Index.

Divide your purchase price for Inland Empire real estate by the annual cost to rent it. If the resulting number is 15 or lower you might have a good deal.

For example, there are 14 2-bedroom/1-bath homes for sale in the 92557 zip code of Moreno Valley. The average asking price of these 14 homes for sale is $147,136. A quick check of GoogleBase shows that you could rent the same Moreno Valley house for about $975. $975 x 12 months equals $10,980. The $147,136 purchase price divided by the annual rent of $10,980 results in an Own/Rent ratio of 13.4.

It might be a good time to consider buying one of those Moreno Valley homes for sale.

Unsold Inventory.

This one is about simple supply and demand. If the supply of unsold homes in Riverside is high, then prices should come down. More than 6 months inventory is considered a buyer’s market and less is considered a seller’s market.

For example, 43 homes have sold in the Orangecrest neighborhood of Riverside in the last 30 days. There are currently 194 homes for sale in this same Riverside neighborhood. 194 unsold homes divided by 43 sold gives us 4.5 months of unsold inventory.

Orangecrest might be a seller’s market.

Price Declines.

Another factor to consider before you buy Inland Empire real estate is whether or not prices are declining. A good indicator is to look to see if there have been at leat two quarters of stable prices. But don’t be in a rush to buy just because prices aren’t declining. Prices could remain stagnant for months.

For example, consider what’s been going on in the Corona, Murrieta, and Temecula real estate market for the las 12 months.

Notice that prices have declined steadily in the Corona, Murrieta, Temecula corridor of the Inland Empire for the last 12 months. Buy cautiously in this market.

Leave a comment on this post and I’ll run the numbers for your market!

Inland Empire - Do you think “maze” and “labyrinth” are interchangeable? Scholars divide them into two distinct types, based on the nature of the path. They consider a “labyrinth” unicursal (ie having a single path to the centre), whereas a “maze” has a number of dead ends or alternative routes that may be taken.

Whether you view Riverside real estate as a maze and Moreno Valley real estate as a labyrinth, or vice versa, there are two must-read articles today. One shows just how hard it is to make heads or tails out of this market. The other shows why mortgage rates are climbing.

Ever wonder what it’s like to attend an auction for real estate foreclosures? Here’s a recent one from San Diego County.

Wonder when Oliver Stone will make a movie?

(many thanks to BusinessWeek.com for the tip.)

RIVERSIDE - Riverside is the 14th largest Motropolitan Statistical Area (MSA) according to the U.S. Census Bureau. In fact, over 4 million people live here in the Inland Empire. But I’ll save the dry MSA statistics for a different post. Today I want to talk about Riverside real estate.

Take a look at these two charts. The first shows the median price for Riverside real estate for the last 90 days. The second shows the median price for Riverside real estate over the last 30 days. I know it’s July, but “do you see what I see?” … an 8.3% drop in 90 days and a 1.8% drop in the last 30 days.

The good news is that price declines are decelerating. The bad news is Riverside real estate prices dropped dramatically in the last 90 days. I guess it’s all in how you look at it.

And here’s the part that I find interesting, inventory is actually up over the last 30 days. If this trnd continues, look for prices to continue to fall.

“Neither we nor anyone else can predict when the housing market will recover and it would be folly for anyone to try to do so.” - Richard Syron, CEO of Freddie Mac, Guarantor of $2.2 trillion of U.S. mortgages

INLAND EMPIRE - What does this mean for Inland Empire real estate in general, and Moreno Valley real estate in particular?

Well, a good place to start is Freddie Mac’s belief that they will now lose 26% on each of 22,000 properties that are foreclosures. In other words - shazaam! - your swimming pool just became a bowl of water. But wait. It gets worse.

On average, one of every 10 mortgages are foreclosures during the last three months, while those who were at least 30 days behind rose to 6.35% of outstanding mortgages. Meaning that in a tract of 100 homes, 10 are foreclosures and another 6 are about to be foreclosures - that’s 16%!

That about covers the Inland Empire, but what about Moreno Valley? If I were a Wall Street analyst, would I rate Moreno Valley real estate as Buy, Hold, or Sell?

I randomly chose one tract in the 92553 zip code that has 251 homes to analyze.

There are currently 12 homes for sale. The average is $123/sq. ft. with a range of $90/sq/ ft to $183/sq.ft. Nine have sold in the last 365 days for an average of $137/sq. ft. These sales ranged from $93/sq. ft. to $191/sq. ft.

Crunch the numbers and you find that homes are available today for an average of 10% that what they’ve sold for in the last 365 days. Not bad considering what Freddiw Mac reported today, huh?

Watch what happens when you look at the last 90 days of sales … the average sale drops 12% to $121/sq. ft. and makes the available listings look overpriced!