Real Estate Market Update – Temecula, Murrieta and Wildomar

July 29, 2015

During the last sixteen months or so, we have written several blogs on sales activity and average selling prices in the nine cities in the Southwestern area of Riverside County. Time has flown, and here we are in the middle of 2015, ready for another update. This time, we’ll look at the two 12-month periods ending in June 2014 and June 2015. As in the past, we’ll break this review up into three posts which will cover three cities each, and this first post will review activity in Temecula, Murrieta and Widomar. For those of you who only want the update on your city, we’ve included an explanation of the graph for each city.

Temecula-prices

Temecula-homes-sold

The graph visually illustrates the data in the data table just above it. Each vertical blue bar represents the average selling price of homes during that month in the year from July 2014 through June 2015, while the vertical green bars represent the average selling price for the twelve months from July 2013 through June 2014. The red line represents the number of homes sold in each month in the 2014-2015 period, while the black line represents the number of sales each month from July 2013 through June 2014.

Looking first at average selling prices, we see that prices have been fairly inconsistent. The average selling price in November 2014 was more than $24,000 higher than in October 2014, then it fell in December and reached its low for the 12 months in January 2015 at $409,449. It rose again from February through May 2015, hitting its peak for the past year in May at $455,647. Though there is no clear, discernable long-term trend, it appears that the pricing slump that began after the summer of 2014 may be behind us – in April, May and June 2015, the average selling price in Temecula stayed above $450,000. Currently there seems to be no downward pricing pressure in the market.

Turning to the number of homes sold on a monthly basis, we again see inconsistency – there is no clear trend that indicates demand is steadily increasing or decreasing. In the most recent four months, however, we see that the number of sales increased over the corresponding four months in the prior year, and have risen from March through June, 2015. It appears that demand has grown and continues to grow, while inventory of homes available for sale remains fairly low. In June 2015, 216 homes closed escrow, the highest number in the two years illustrated in the graph. A minor note: It appears, in the most recent six or seven months, that when the number of sales fell to a lower point, so did the average price, and when the number of sales increased, the average price increased as well. We believe that this means that as fewer homes sold, those that did sell were lower-priced homes, not that prices were declining overall. The price changed because the “mix” of homes was dominated by lower priced properties. There is always demand for lower-priced homes, whereas when the number of sales declines, there are also fewer sales in the upper price ranges. The Temecula market looks strong now, both in terms of price and number of sales.

Murrieta-prices

Murrieta-homes-sold

The graph visually illustrates the data in the data table just above it. Each vertical blue bar represents the average selling price of homes during that month in the year from July 2014 through June 2015, while the vertical green bars represent the average selling price for the twelve months from July 2013 through June 2014. The red line represents the number of homes sold in each month in the 2014-2015 period, while the black line represents the number of sales each month from July 2013 through June 2014.

Looking at the bars representing average selling prices in Murrieta, we note a number of obvious differences compared to the Temecula graph. Where the selling prices in Temecula in the 2014-2015 year were higher in 11 of the 12 months than in the same months in the previous year, average selling prices in Murrieta were higher in only seven of the 12 months of the 2014-2015 year, and the remaining five months were lower than in the previous year. Murrieta’s highest average price for the 24 months in the reporting period was $404,865 in December 2014, and it wasn’t until June 2015 when the average price approached that level again, reaching $400,192. However, this doesn’t mean there was a “price collapse” in Murrieta – the three months when the average price spiked above $400,000 tend to be the focal points, and make the rest of the prices appear lower. Looking across the 24 month period, we actually see many months where the average selling price was in the $360,000 to $370,000 range, so there is a relative consistency in that. Highlighting the differences in Temecula pricing, all but two of the 24 months in Temecula had prices above $400,000, with many months well into the $400,000s.

Comparing average prices on a 12-month basis, Temecula’s average selling price from July 1, 2013 through June 30, 2014 was $420,477 (for 1,808 sales) compared to an average price of $370,925 in Murrieta (for 1,852 sales), and in the 12 months from July 1, 2014 through June 30, 2015, Temecula’s average price was $436,980 (for 1,976 sales) compared to an average price in Murrieta of $378,295 (for 1,892 sales). So in Murrieta, both the number of sales and the average selling prices were fairly flat year-to-year, with a variation of only about two percent.

As for the number of sales in our two 12-month periods, the highest number of sales occurred in the first month, July 2013, with 217 sales, and in the last month, June 2015, with 211 sales. Sales also exhibited seasonal trends, with the late fall and winter months showing fewer sales than spring and summer.

Wildomar-prices

Wildomar-homes-sold

The graph visually illustrates the data in the data table just above it. Each vertical blue bar represents the average selling price of homes during that month in the year from July 2014 through June 2015, while the vertical green bars represent the average selling price for the twelve months from July 2013 through June 2014. The red line represents the number of homes sold in each month in the 2014-2015 period, while the black line represents the number of sales each month from July 2013 through June 2014.

If you like a certain level of consistency, you will like this graph. For the 2014-2015 year, 11 months had higher average selling prices than the same month in the prior period, while the average price in December was basically flat year-to-year. The highest price on the graph was in May 2015, at $348,694. From July 2013 through June 2014, there were only three months in which the average selling price was below $300,000 and from December 2013 to the present, every month’s price has been above $300,000. As is the case in Murrieta, pricing has leveled off over the last year, but has recently begun to show strength again. There appears to be growing buyer interest in Wildomar, because of the housing value available compared to other local cities.

As a residential city, Wildomar has more of a property “mix” than Temecula or Murrieta. The total population in Wildomar is about one-third the population in Temecula or Murrieta (each of which has a population at or above 105,000). Wildomar covers 24 square miles (compared to about 26 square miles for both Temecula and Murrieta), and more of the approximately 10,700 residences in the city limits have a rural quality. While some of the newer developments along Clinton Keith Road, Palomar and Grand rival the appeal and quality of some of the nicest neighborhoods in Temecula and Murrieta, some of the older, more rural areas in the city keep average selling prices below what homes sell for in the newer developments.

The number of Wildomar homes sold is low, compared to Murrieta and Temecula, but again, Wildomar has both much lower population and fewer residences than either of them. The highest number of sales in the last two years was 40 homes, in August 2014. Usually we’d expect to see more volatility in the month-to-month pricing with so few sales, but the mix of homes must remain fairly consistent.

© July 2015 Terry & Kathy Slavin All rights reserved.

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