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Home sales were up last month in the six-county Southern California area, led mainly by sales of bargain-priced foreclosures in Riverside and San Bernardino counties. But according to this story from Leslie Berkman of The Press-Enterprise of Riverside, Inland Empire prices could still fall farther.
Economists and real estate insiders agree that the biggest price drops are behind in Inland Southern California. But they say prices could fall another 15 percent or so, bottoming in mid- to late 2009 or 2010.
But those predictions aren’t stopping I.E. homebuyers.
In a year, prices on the resale market have fallen about 39 percent to a median of $238,190, influenced by a tremendous influx of bank-discounted houses in foreclosure. In just one month, from June to July, the median price dropped more than 9 percent.
“I always wanted to be a homeowner and now it is finally possible,” said Michael Carlin, a 29-year-old Corona school teacher. Carlin, who started house hunting in July, has faced fierce competition in his $200,000 to $240,000 price range, with each house receiving up to 18 offers. He said recently he made offers on eight houses in hopes of having one accepted.
Although prices may continue to drop, mortgage rates are another story:
Bruce Norris, a Riverside real estate investor who has successfully predicted past trends, figures the interest rate on a 30-year-fixed rate mortgage could climb from 6.5 percent to as high as 9 percent in the next two years. That would make even significantly lower prices “a moot point,” he said, for those needing financing.
For someone wanting to buy a house to live in, Norris said, it’s a good time to tie up long-term financing, which now is as cheap as it is going to get.
A long commute and a compromised lifestyle may be the price for median-income Angelinos who want to own homes. There aren’t many one-bedroom condos for $250,000, let alone new-ish three-bedrooms with yards, around these parts.
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