Local Insights About Riverside Real Estate Market By Ruby Frazier
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he Riverside real estate market for the better part of 2022 has been nothing but hot, growing even hotter as 2021 drew to a close. If there are things that stood out the past year, it is double digits’ price appreciation, tight inventory, and bidding wars. In addition, the market saw an influx of new home buyers, prompted by low-interest rates. If you didn’t manage to buy your dream home in 2021, you might be wondering if 2022 will be it. Before taking the plunge, here are a few local insights into the Riverside real estate market: INVENTORY As of January 5, 2022, according to the California Regional Multiple Listing Service (CRMLS), Riverside, CA, currently has 136 single-family residence homes for sale. They are priced between $350,000 and $2,650,000. In the first week, there were currently 354 homes in escrow in Riverside, California, which are either pending or accepting backup offers. Riverside’s tight inventory is expected to rise slightly in 2022 as the buying frenzy of 2021 subsidies and forbearance programs expire, adding to the multiple listing service (MLS) inventories. HOME SALE Home sales in Riverside, California, have remained level through the pandemic and economic recession, and according to Firsttuesday.com, that is indicative of a recession-proof housing market.
According to homes sales data from the third quarter of 2021, homes sales went up 23% compared to the same period in 2019—an increase that firsttueday attributes to increased buyer purchase power and the fear of missing out (FOMO). With interest rates beginning to creep back up in 2022, homes sales are projected to drop slightly. That being the case because home affordability will drop. Housing affordability is expected to fall to 23% next year, down from a projected 26% in 2021. Homes sales data from December already show a home sales declines. According to Redfin.com, 352 homes were sold in December 2021, down from 405 the previous year. MORTGAGES Besides home affordability declining, there will be a lot of distressed homes sales as households struggle to keep up with their differed mortgages. According to the Mortgage Bankers Association (MBA), purchase mortgages will reach a new high of $1.61 trillion this year. This is a $0.1 trillion increase over the previous mortgage record set in 2005. In addition, new mortgage originations for home purchases are expected to total $2.32 trillion, which is less than the $2.63 trillion purchased in 2020 but still the thirdhighest total in US history. HOME PRICES Ed Pinto, director of the American Enterprise Institute’s Housing Center and former chief credit officer at Fannie Mae, predicts that home prices will continue to rise in the double digits by 2022. Managecasa.com predicts that any price increases will likely encourage some owners to hold onto their properties in anticipation of further price increases. Home sales have outpaced new listings, indicating that prices may rise further. Supply in the Bay Area fell precipitously (-42 percent), as did supply in Southern California (-24 percent). Reduced-priced listings are declining as more sellers realize they can get their asking price. After the 2020 recession, home sales volume in Riverside will begin to stabilize around 2023-2024, at which point firsttime Gen Y and Gen Z homebuyers, as well as Baby Boomer retirees, will converge to drive up sales volume and prices. Interest rates are still considerably low by all standards, and it is still an excellent time to buy your dream home. Home prices will continue to creep up, and demand for Riverside properties will increase as people escape the Los Angeles price heat. FEBRUARY 2022 | 39
