Is The Lower Level of Residential Inventory Hurting Housing Sales?
This is a good question and one that was posed to us by a prospective buyer…and the simple answer is a resounding NO. We know that this flies in the face of the mainstream media and the siren they are sounding about the lack of housing, but let us tell you a different story of what is really happening in our Riverside housing market.
To begin, do not confuse “houses for sale” with “houses sold.” Here are some numbers that put this into perspective. For the first two months of 2018, in the Riverside area, there were 461 properties that closed escrow…461 homes that buyers looked for, found, wrote an offer, got said offer accepted, and finally closed escrow.
Now let’s compare this to the same two months of 2017.
Ready…how about 457 properties that closed escrow? That’s right. No change from year to year. In the “inventory starved” market of 2018, we are right at the numbers that were there for the “non-inventory starved’ market of 2017. How can this be…the real estate pundits are all raving about how the lack of inventory is hurting our housing market.
So what gives?
Two things are happening here.
First, while indeed there may be fewer houses for sale, there is still plenty for buyers to choose from…but it is selling quicker, so buyers may need to make up their minds a little quicker. Also, as a note that is not backed-up by any statistics, but merely the musings of a 40 year real estate veteran, there is less “junk” on the market now…fewer homes that will just sit there because they are in horrible shape, or waaaaay overpriced. Most sellers seem to be fairly serious about selling, so they get their homes in good shape and stay fair and reasonable with their pricing.
Secondly, Riverside is experiencing a surge in buyers because the price of an average home in Orange County has skyrocketed to a whopping $670,000 as opposed to the average price in Riverside of around $350,000. Simple economics will tell you that there are more buyers who can afford $350,000 instead of the Orange county prices. Also, with more people working from home, and the Express lanes on the 91 freeway now finally open, there are ways to ease the traffic if one works in Orange County.
Remember…Riverside will always be the affordable housing alternative to Orange County, and the vast number of people who are trying to relocate to our area from our higher priced neighbors is a daily testament to that.
The result of all this? Easy…no matter what the media says, we are different here in Riverside, and are proud of it. Our city is growing, families are loving what they find here, and more importantly, from a real estate standpoint, we have a pretty good balance right now of buyers and sellers, which is good for us all…and who can find fault with that?
Take care, and as always, thanks for reading our blog.