by Gene Wunderlich

The National Association of Realtors recently released 3^rd quarter housing results showing that median home prices across the country fell 4.7% from 3^rd quarter last year. Compared to last year, home prices for previously occupied homes fell in 111 of 150 metro areas to a nationwide median of $169,500. Leading the loss brigade was Mobile AL (-17.7%), Phoenix AZ (-17.6%), Allentown PA (-17.5%) and Salt Lake City UT (-15.3%). That’s about the same as 2^nd quarter results which showed prices still falling in 109 of the 150 metro areas.

Prices did increase in 39 area including Grand Rapids MI (23.7%), South Bend IN (19.8%), Palm Bay FL (17.7%) and Green Bay WI (12.6%). Regionally, home prices dipped 3.3% in the Northeast to $229,400, Midwest prices dropped 1.4% to $137,400, Southern states saw a decline of 3% to $144,400 and out West we fell 4.5% to $207,400. Weak demand and normal year-end slowdown is expected to push national prices down as much as another 3% by year-end.

Locally, our prices played out slightly better, but not much. Temecula prices soared over 3^rd quarter 2010 by 1% to $309,515 and Murrieta was up .05% to $271,303. But these increases were not enough to offset drops in other areas bringing our regional median down by 2% to $241,621. If you live in Wildomar your home is worth about $442 less than last year but Lake Elsinore homes have dropped nearly $13,000, or 7% under 3^rd quarter last year.

Existing home sales increased 17% across the country Q3 2011 over Q3 2010. Last year saw a substantial drop-off in sales during the 3^rd quarter caused by the end of the 1^st Time Homebuyer Program, which accelerated sales into the 1^st half of the year only to see them fall away in the last half.

Sales in the Northeast rose 6.8% from Q3 2010, Midwest sales increased 17.2%, up 10.5% in the South and 10.7% in the West. Local sales did not fare so well with Temecula Q3 dropping 5% from Q3 2010 (519/494) and Murrieta sales down by 9% (560/508). Lake Elsinore sales remained dead even at 329 with Wildomar, Canyon Lake and Menifee posting very moderate gains. Southwest California homes sales year-to-date are off a modest 3% from last years record pace (6,205/6,373).

Nationwide the inventory of homes for sale stands at 8.5 months. That means if no new properties were added to the market it would take 8 ½ months to sell everything currently listed. In Southwest California our inventory is just 3.9 months – a number that would indicate a strong sellers market under normal circumstances. I shouldn’t need to point out that our market is anything but normal these days – in fact we’re not even sure what normal is anymore. We’re in the process of redefining it now. We’ll let you know.

It could be worse. There are areas of the country that still have 20+ months of inventory, as we did just a couple years ago. Our area has shown some resilience and growth during the past three years as our prices have largely stabilized. While our prices are down 2% this quarter, they were up by a similar amount last quarter and have gyrated within a $10,000 range for the past three years. This is remarkable stability given the ongoing market for distressed homes.

One final indicator for our market is the strength of ongoing demand. Weighing the number of homes selling in a given 30 day period against the number of new homes coming on the market shows that our absorption rate for the region is 84%. For every new home listed, we are selling 8.4 of them. With economists forecasting the housing market to remain depressed until at least 2014, our stable median price and strong sales demand is a good market to be in.

Now if we could just get banks back into the lending business and get the government out of our business… Maybe I’ll write Santa.

Gene Wunderlich is the Government Affairs Director for the Southwest Riverside Association of Realtors.  You can direct your questions and comments to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .