January 20, 2015
In September of last year we provided information on sales activity and average selling prices in the nine cities in the Southwestern area of Riverside County for two prior 12-month periods, each ending in August. Since 2014 is now over, we thought it was time to update our numbers and graphs to include the most recent four months of data, as well as compare the last two years. We’ll break this review up into three posts which will cover three cities each, and this post will review activity in Temecula, Murrieta and Widomar.
The graph visually illustrates the data in the data table above. Each vertical blue bar represents the average selling price of homes during that month in 2014, while the vertical green bars represent the average selling price for the months in 2013. The red line represents the number of homes sold in each month in 2014, while the black line represents the number of sales each month in 2013. From January through August in Temecula, the blue bar (2014) is higher than the corresponding green bar (2013). In September, they are almost equal in height, and in October, the average price in 2013 was higher than the average price in 2014. In November, the 2014 price was again higher, with both bars being about the same height in December of both years.
What does this mean? It appears that monthly year-over-year price increases slowed or disappeared in the last four months of the year. However, because this doesn’t appear as a consistent trend, it’s difficult to say that price increases have halted. We’ll need to watch the market to see what happens in the next few months.
The number of sales also demonstrated inconsistency. It’s obvious that in a number of months sales were roughly equal, and that in some months of 2014 the monthly sales number was higher than in the same months of the prior year. But it’s also obvious that some months of 2013 showed higher sales numbers than the same month in 2014. So again, no clear trend.
Comparing total annual sales for the two years, there were 1,839 single family homes sold in Temecula in 2014, vs. 1,859 single family home sales in 2013. Not enough of a difference to be significant. Looking back to 2012, however, 2,101 homes sold in Temecula, while in 2011 homes sold totaled 1,927. In both 2011 and 2012, total home sales were higher than in 2014, and 2012 was the year that saw the highest level of buyer demand and average price growth. As prices continued to increase, fewer buyers could afford to buy. However, recent changes in lending may have a positive impact on loan qualifying and affordability. More on this in a few days.
The data and graph for Murrieta tell a story similar to that of Temecula. From January through September, the blue bars for the months in 2014 are all higher than the green bars for the corresponding months in 2013, although the differences in some months are very slight. In October and November, however, the green bars are higher, meaning that prices in those months in 2013 were higher than in the same months in 2014. Then in December, the 2014 average selling price was again higher than the prior year. Given the significant price variations in November and December, it’s difficult to determine any trend. Again, we’ll have to watch the market for the next several months to see if prices continue to rise or will fall into a range where they’re roughly stable.
The lines illustrating the number of sales are also similar to Temecula’s. In some months, year-over-year sales numbers were close to each other, and some months 2014 was higher, while in other months 2013 was higher. Again, no clear current trend. The number of sales fell significantly from October to November 2014, but rebounded somewhat in December. Looking at total annual sales of single family homes, there were 1,810 sales in 2014 compared to 1,890 sales in 2013, a difference of 80 sales equal to a decline of 4.2% in 2014. Total sales in 2012 were 2,109 homes, and totaled 2,015 homes in 2011.
Wildomar is a much smaller market than either Temecula or Murrieta, so we can expect a certain amount of volatility in both average selling price and number of homes sold, because of the smaller number of monthly sales. Looking at the blue and green bars in the graph, we see that 2014 started very strongly with large year-over-year increases in average selling price. The prices in June were much closer than in previous months, but the 2014 price jumped significantly over 2013 again in July. Thereafter, 2014 prices were above those in 2013, but the differences year-over-year were much smaller. In December, the difference in average selling price for the two months was less than $1000. We’d have to surmise that monthly price gains have slowed, and that prices from August through December 2014 never again reached their July level. The trend appears to be toward some level of pricing stability.
Looking at the lines representing the number of homes sold in the two years, it appears that sales in 2014 were below the 2013 level, except for two monthly spikes in June and August. With as few as 19 and 21 homes selling in two months of 2014, you can see where a few sales of either very high priced or very low priced homes could have a disproportionate effect on average prices. In 2014, a total of 338 single family homes sold in Wildomar, down from a total of 385 in 2013, for a decline of 47 sales, equal to 12.2%. In 2012, 401 homes sold in Wildomar, while 393 sold in 2011.
Over the next few days, we’ll update the sales statistics for the other six cities in Southwest Riverside County: Menifee, Canyon Lake, Lake Elsinore, Winchester, Hemet and San Jacinto.
© January 2015 Terry & Kathy Slavin All rights reserved.