Affordability, Foreclosures, Inventory and Unemployment 5/20/2009

First Chart is showing what percentage of a population can afford the median priced home, in its area – for Riverside / San Bernardino Counties the lowest percent of families that could afford the median priced home was in the third quarter of 2006 at 18% – now in the first quarter of 2009 it is 65% of families that can afford the median priced home, which is superior to the National affordability rate of 64% for the first quarter of 2009.

affordability

Next chart is the number of Moreno Valley homes in foreclosure, or lender owned over time.  NOD = Notices of Default – the first step in the foreclosure process; NOT = Notices of Trustee Sale – date has been set for the foreclosure transfer back to the lender; and REO = Real Estate Owned or properties now owned by their lender.  Note the total number was fairly stable until May 2009; First noticed by an increase in the Notices of Default, followed by the NOTs (homes going to the foreclosure auction) and now the growth is in the number of lender owned homes (REOs).

foreclosuresNext chart is based on the number of active listings divided by the number of pending sales (over 1-month) to reflect the months of standing inventory (which is the time needed – based on sales for the current number of listings to sell).
inventory
Breaking down the listings / pending sales over 1-month – the following was found based on type of sale:

  • Only 6% of listings are Standard sales and 88% of Standard sales are selling.
  • 22% of listings are REO and 63% of REO properties are selling.
  • 60% of listings are short sales, but only 13% of short sales are selling.

Next chart is the changes in Unemployment (local area is Riverside – San Bernardino – Ontario, CA)
unemployment-growing
Next chart is the median sales price per square foot for the 4 zip codes in Moreno Valley – between Jan 2008 and April 2009.  For contrast the median prices per square foot from July 2006 (about the top of the market) to April 2009 are:

July 2006 April 2009 difference
92551 $ 232 $ 77 – 67%
92553 $ 251 $ 75 – 70%
92555 $ 230 $ 81 – 65%
92557 $ 248 $ 88 – 65%

squarefootprices

Median Prices July 2006 April 2009 $ Loss
92551 $385,000 $129,000 – $256,000
92553 $359,000 $103,000 – $256,000
92555 $470,000 $195,000 – $275,000
92557 $405,000 $145,000 – $260,000

The low (very affordable) home prices are attracting buyers, and we have seen a shift from too many homes for sale and too few buyers – to too many buyers and not enough properties (priced correctly).  This will result in price increases.  However, more foreclosures will increase the inventory and a growing unemployment problem might push some potential homebuyers out of the market.

Beverly A. Bayer, SRA – Appraising MorenoValley.com

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    2 Responses to “Affordability, Foreclosures, Inventory and Unemployment 5/20/2009”

    • When do you think the Moreno Valeey house prices will hit 2006 levels, if ever?

    • James.

      Because home prices in Moreno Valley went up so high / so fast – caused by lending not based on the buyers ability to pay – prices were artificial.

      prices now are too low – in my opinion and are correcting, but slowly. It may take 20 years+ to get back to 2006 prices.

      Beverly Bayer

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