Home prices rise more slowly
By: CHRIS BAGLEY - Staff Writer
Last modified Wednesday, July 19, 2006 1:02 AM PDT
Home prices inched up at their slowest rate in several years last month as a growing number of listings continued to weaken sellers' iron grip on the market, a real-estate research service reported Tuesday.
Riverside County's median home price of $422,000 was a new record, but also represented an increase of just 7.4 percent from June 2005, according to DataQuick Information Systems. That was the lowest year-on-year gain in several years. Median prices rose at annual rates above 30 percent through much of 2004.
More houses and condominiums are on the market these days, and many are staying on the market for months at a time, whereas homes often sold in less than a month in early 2005. To keep the process from drawing out even longer, sellers have become less aggressive in setting their prices, said Gretchen Gusky, who manages a Temecula branch of Coldwell Banker Residential Brokerage.
Last July, 1,983 existing homes were listed, Gusky said, citing data from the Southwest Riverside County Association of Realtors. That number has grown to 2,639, she said.
"We have more properties for sale, so there's greater competition," Gusky said.
Some real-estate professionals have recently suggested that relatively small gains in buyers' incomes may be helping to keep a lid on home prices, even in havens of relative affordability such as Riverside County. Prices in the cheaper inland counties of Riverside and San Bernardino have risen more quickly than in coastal areas, thus narrowing a large gap.
In San Diego County, median home prices actually fell slightly to $488,000 from a year-ago level of $493,000, according to DataQuick. The median is the level at which half sell for more and half for less.
Builders have begun offering more aggressive incentives for referrals from real-estate agents, which is typically a response to rising inventories of unsold homes. Builders recently were offering agents commissions at 75 new home developments in Southwest County, compared to 67 developments last summer and just 29 in summer 2004, according to a quarterly tally by Kellie Tuer, a representative of Heritage Escrow in Temecula.
Some sellers of existing homes have begun to cut asking prices when houses don't sell as quickly as they had hoped. Gusky said such sellers are still relatively rare. More of the recent sellers tend to be investors seeking capital gains, rather than residents of the homes.
"We just don't have any investors any more who go in there and flip the properties," Gusky said. "The investors that are there are looking for steals, and the sellers that are there aren't desperate."
Sales volumes have stayed relatively high in Southwest County, Gusky said, though DataQuick reported a decrease in most parts of Riverside County and Southern California. About 5,930 homes sold in Riverside County last month, a 9 percent decrease from June 2005.
Gusky and DataQuick President Marshall Prentice welcomed the region's slowdown after the hotter pace of recent years.
"We view this as the normal winding down of a real-estate cycle, where declining demand gradually erodes price growth until it halts or reverses," Prentice said. "We expect more markets to see prices flatten or decline a bit in the second half of this year."
-- Contact staff writer Chris Bagley at (951) 676-4315, Ext. 2615, or cbagley@californian.com.
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