Inland Empire home sales plummet 40% as payments rise 60%-plus

Homebuying’s slump in Riverside and San Bernardino counties pushed sales down 40% in October as house payments jumped more than 60%.

Inland Empire sales totaled 4,769 in the two counties — down 3,149 from October 2021, according to data from CoreLogic.

Many house hunters were scared off by surging mortgage rates that cut buying power by 35% in a year, making high home prices even more unaffordable. Overall economic unease, especially soaring inflation, further spooked potential buyers.

Let’s look where the Inland Empire cooldown was most intense, starting with total sales for the month.

Riverside County had 2,670 closed transactions for single-family homes and condos, existing and new construction. That’s down 16% in a month and 40% lower in a year. San Bernardino County saw 2,099 homes sold —  down 15% in a month and 39% lower in a year.

Next, consider how prices moved. In Riverside County, the $545,000 median was down 3% in a month and 4% higher in a year. It’s also 9% off the $598,500 record high.

San Bernardino County had a $490,000 median —  down 1% in a month and 9% higher in a year. It’s also 6% off the $523,000 peak.

Across the six-county region, 14,529 residences sold —  down 14% in a month and 39% lower in a year. Southern California’s $705,500 median was down 1% in a month and 4% higher in a year. It’s also 7% off the $760,000 peak.

Payment pain

Pricier financing is clearly a culprit. The 30-year mortgage averaged 6.9% in October vs. 3.1% 12 months earlier. My trusty spreadsheet tells us how that rate jump changed a typical homebuyer’s house payment …

Riverside County: $2,871 estimated cost per month for the $545,000 median vs. $1,793 a year ago on the $525,000 median —  60% higher. And that assumes putting down 20% or $109,000.

San Bernardino County: $2,582 on $490,000.0 vs. $1,537 on $450,000 a year ago —  68% higher. Downpayment: $98,000 or 20%.

In six-county Southern California: $3,717 on $705,500.0 vs. $2,308 on $675,000 a year ago —  61% higher. Downpayment: $141,100 or 20%.

Then consider the mortgage-making nosedive.

In the third quarter, Inland Empire borrowers took out 28,247 mortgages – down 60% from a year ago, according to Attom.

That was the result of 49% fewer purchase loans and 78% fewer refinanced mortgages. But homeowners took out 127% more home-equity loans.

Single-family homes

How detached, existing housing sold in October.

Sales: Riverside County: 1,799 sold —  down 17% in a month and 45% lower in a year. San Bernardino County: 1,570 sold —  down 16% in a month and 43% lower in a year.

Prices:

Riverside County’s $545,500 median was down 3% in a month and 3% higher in a year. San Bernardino County’s $470,000 median was down 1% in a month and 4% higher in a year.

In Southern California, 9,672 homes sold, down 16% in a month and 42% lower in a year. The $749,250 median was down 1% in a month and 3% higher in a year.

Condos

How condominiums and townhomes fared for the month.

Sales: Riverside County had 304 sold —  down 4% in a month and 38% lower in a year. San Bernardino County: 146 sold —  up 1% in a month and 28% lower in a year.

Prices: Riverside County’s $444,000 median was down 2% in a month and 6% higher in a year. San Bernardino County: $477,500 median —  down 1% in a month and 10% higher in a year.

In Southern California, 2,924 sold —  down 13% in a month and 43% lower in a year. The median $617,500 was up 2% in a month and 6% higher in a year.

New homes

A look at what builders sold for the month.

Sales: Riverside County had 486 sold —  down 19% in a month and 13% lower in a year. San Bernardino County: 270 sold —  down 22% in a month and 4% lower in a year.

Prices: Riverside County’s $600,000 median was down 1% in a month and 8% higher in a year. San Bernardino County’s median $655,000 was up 8% in a month and 24% higher in a year.

Builder share: Riverside County’s 18.2% last month vs. vs. 12.6% 12 months earlier. San Bernardino County was 12.9% last month vs. 8.1% 12 months earlier.

In Southern California, 1,619 new homes sold —  down 3% in a month and 1% lower in a year. The $728,000 median was up 7% in a month and 9% higher in a year. Builder’s slice of six-county sales: 11.1% last month vs. 6.9% 12 months earlier.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register