2011 Riverside-San Bern. Economic Conference Residential Real Estate Section Now Online

Miss the 2011 Beacon Economics Riverside-San Bernardino Economic Forecast Conference on Thursday, November 3rd at the Riverside Convention Center?

Fear not -- you can still download the section on residential real estate by clicking here or on the book cover to the left.

As in the past this section was authored by me and MetroIntelligence.

Here are the key points from that chapter:

• Falling home prices in the Riverside/San Bernardino region have dramatically increased home affordability, with 72% of households able to buy the median-priced home at current interest rates, up from the single digit percentages seen as recently as the fourth quarter of 2007.
• The new home market in the Riverside/San Bernardino region has been decimated, with sales falling by 90% between the first quarter of 2006 and the second quarter of 2011. After falling by 37% between mid-2006 and early 2009, since then prices have ranged mostly between $270,000 and $285,000.
• Although existing single-family home sales did stage a strong rebound after the end of 2007 due to various tax credit programs, since these programs expired, sales fell back to about 14,400 by the second quarter of 2011.Prices, after reaching a trough in the second quarter of 2009, rallied through the second quarter of 2010 but during the second quarter of 2011 fell back down to just under $174,000.
• Sales of condominiums, which started to fall in 2004 as prices began to freeze out traditional first-time buyers, rebounded by 85% between the third quarter of 2007 and the second quarter of 2011 to over 1,600 units. Prices, which fell by 63% from peak to trough by the third quarter of 2009, have since risen by nearly 18% to $142,947.
• Although the combination of a shadow rental supply, a soft economy, and high unemployment will continue to affect the local apartment market, it is gradually returning to health.Vacancy rates have begun to fall, and should dip below 6.0% in 2012. Average asking rents are also rising slowly, averaging $1,064 by the second quarter of 2011 and could rise by 1.0% or more per quarter by the middle of 2012.
• Following a nearly year-long drop in foreclosure activity, a 26% increase in default activity between the second and third quarters of 2011 in the region will likely mean a similar increase in foreclosures over the next nine to twelve months.A new wave of REO homes could certainly have an impact on prices for existing homes.
• Permits for single-family homes remain depressed in the region, totaling just over 1,100 homes for the two-county region by the second quarter of 2011, but should start to slowly rise by the end of 2011 and even climb past 3,000 units by the last quarter of 2015.
• Permits for multi-family homes fell to just 256 units during the second quarter of 2011, but should now start rising gradually as builders re-enter the market to meet pent-up apartment demand.By the end of 2015, multi-family permits could reach 2,000 units per quarter.