“Bubble Watch” digs into trends that might indicate economic and/or real estate market troubles ahead.
Buzz: Riverside County’s high-end housing market had the third-largest jump in asking prices in the nation for the fourth quarter.
Source: Realtor.com produced a ranking of high-end housing in 95 U.S. counties based on year-over-year changes in listing prices. The research study defines the luxury market as the costliest 5% of houses. It then computes this specific niche’s “entry-level” rate– i.e., the lowest one– as the high-end cost criteria to compare with the previous year’s market conditions.
Riverside County’s luxury real estate market had an “entry-level” cost of $2.28 million in the 4th quarter, a criteria that jumped 46% in 12 months.
That gain was topped just by 2 Colorado counties near Denver: Jefferson at $2.97 million, up 81%, and Arapahoe, at $2.51 million, up 49%.
Nationally, the $3.4 million luxury entry cost was up 14% for the year.
Riverside County has the housing that meets the pandemic period’s desires– large, non-urban living with some relative bang for the dollar.
But that specific niche has actually proven to be more difficult and more expensive to find. A Realtor.com scorecard ranked Riverside and San Bernardino counties as the U.S. market with the second-biggest drop in homes-for-sale inventory and the biggest dive in overall listing costs at year’s end.
Who understood a pandemic could flame a homebuying frenzy for the upper crust’s housing in California? This high-end ranking’s 20 largest gainers were found in 5 other Golden State counties …
San Luis Obispo: $3.34 million, up 44% in a year, the fourth-largest gain amongst 95 counties studied.
San Diego: $5.38 million, up 42%, No. 5 boost.
Santa Barbara: $18.87 million– the nation’s price leader– up 40%, No. 6 boost.
Monterey: $9.26 million, up 39%, No. 9 boost.
Contra Costa: $3.16 million, up 33%, No. 18 increase.
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Let’s not forget 2 of Riverside County’s ocean-proximate neighbors had luxury gains, too– albeit smaller sized increases: Los Angeles County’s $8.21 million entry price was up 16% (54th amongst the 95), and Orange County’s $5.96 million was up 13% (No. 63).
You could state luxury house hunters have found out a Southern California’s real estate secret: Riverside County is among the area’s finest real estate deals.
Just ponder a fast search of Southern California listings to see what a purchaser may get at rates around Riverside County’s $2.28 million luxury entry cost.
Let’s start with a listing in the city of Riverside, a house built in 1991 with four bed rooms and 5 restrooms in 6,584 square feet on a 59,000-square-foot lot.
Compare that with a West Hollywood house built in 1924– 3 bedrooms and two restrooms in 1,760 square feet on a 5,431-square-foot lot.
Or a North Tustin house built in 1989– 5 bed rooms and 5 restrooms in 5,545 square feet on a 25,000-square-foot lot.
Or an Ocean Beach home built in 2007– six bed rooms and four restrooms in 3,786 square feet on a 7,000-square-foot lot.
And in San Bernardino County– not consisted of in Realtor.com’s study– you ‘d get a Chino Hills house integrated in 2007 with five bed rooms and 5 restrooms in 4,277 square feet on a 21,000-square-foot lot.
On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … 4 BUBBLES!
Riverside County has some swank communities– from old orchard houses to desert mansions to big, freshly constructed houses more detailed to coastal cities.
Understandably in this pandemic, there’s been a rush to buy bigger living quarters, particularly for folks who can afford the move-up. And I comprehend how low home mortgage rates ballooned home hunter’s purchasing power.
But the length of time does interest stay in bigger houses, specifically in markets beyond task hubs, when the coronavirus (ideally) is just a bad memory?
It’s all however certain that today’s traditionally low rate of interest will not last permanently.
And substantial appreciation rates in regional real estate markets are scary, no matter the underlying principles.