The first-quarter Metrostudy data for the Riverside-San Bernadino-Ontanio, California housing market shows a market cooling and price appreciation coupled with fewer new-home sales in 2014. According to data from Metrostudy Analytics, overall closings dropped nearly 3,000 in the first-quarter from 4Q13, with new-home closings alone falling from 1,606 to 1,058. The market also experienced a drop compared to 1Q13 with new-home closings coming from 1,268, representing approximately a 17 percent decrease in new-home sales.
Despite the decrease in home sales over the last four quarters, prices in the Riverside market are still on the rise, although a jump not as dramatic as other California markets. The median price for new-home closings in the Riverside market climbed from $352,100 to $392,100 between the fourth-quarter of 2013 and the first-quarter of 2014. In the first-quarter of 2013, the median new-home closing price was $325,600 marking a 20 percent price increase in the past year. The average price per square foot for new homes has also jumped slightly from $174 to $188 between 4Q13 and 1Q14. The average price per square foot this time last year for new homes was $149. The 26 percent increase in the average cost per square foot is likely to impact affordability for the new-home buyer. What has remained mostly unchanged in the market is the average age of the homebuyer. In both the first-quarters of 2013 and 2014, the average age of new homebuyers was 43. Meanwhile the average age of buying existing homes jumped to 48 from 45 in the first-quarter of 2013.
Months supply of housing has declined slightly over the past few quarters with 8.6 months in 1Q14 according to Metrostudy data, down from 10.3 in 1Q13. The Vacant Developed Lot supply has been stagnant over the last year, fluctuating less than four months between quarters and reaching 45.2 months in 1Q14. VDL inventory has also held in the range of 21,000-22,000 lots each quarter with 21,923 lots in 1Q14.
The average household income for homebuyers has decreased slightly over the past year. For existing home sales the average household income declined by approximately $2,000 and by nearly $18,000 for new-home sales. Part of the reason for this, and a possible explanation slow home sales, is the high unemployment rate in the market. Riverside had one of the highest unemployment rates in the nation in May at nearly 8 percent. This is, however, an improvement over May of 2013 in which the unemployment rate reached 9.7 percent, and is a decrease of 0.3 percent over April of 2014. A continued decrease in unemployment might help boost home sales in the coming months.
Learn more about markets featured in this article: Riverside, CA.