Real Estate Prices At All-Time High in Inland Empire

            With housing prices at an all-time high right now, real estate in the Inland Empire is reaching unprecedented heights recently. Although housing prices seem to be on the incline, a survey recently conducted by the National Association of Home Builders found one in five reporting more home sale cancellations than six months ago. Only 4 percent of the overall group stated the increase in cancellations has been significant.

            While reasons for cancellations tend to differ, 45 percent of those polled by the NAHB stated cancellations were due to a buyer’s inability to sell their existing home, and a third of buyers were unable to qualify for financing at this time due to rising mortgage rates. “Sales are dropping because interest rates are increasing and less people can qualify,’’ said Dan Villagra, a loan officer with Home Loan Mortgage. “Down payments and monthly payments are higher. There are ways around it, but the government is cashing in on all the people who became indebted in the last five years.”

            While many times the season causes market declines from December to January, the 20,085 homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties during the month of January is the lowest number since January 2001.

            Although Los Angeles and Orange counties are infamous for costly houses in California, the Inland Empire is not far behind. According to the L.A. Times Southern California Home Resale Activity data, the city of Hesperia (92344 zip code) saw a 62 percent change in median home prices from January 2005 through 2006 for single family homes. The city of San Bernardino (92408) saw an 87.3 percent price change in that same period, bringing their median price range for a single family home to $309,000. That price sounds pretty high for a home in San Bernardino; however that number is lower than the $322,000 median price for homes in the Riverside and Ontario areas.

            As prices have increased statewide, it seems to push buyers further east. Traditionally many Los Angeles county residents migrated towards San Bernardino County for less expensive and larger houses.

           “In Los Angeles, homes tend to be built on big lots, so people are destroying the homes and replacing them with apartment complexes and condos to take advantage of the land. Those from the San Gabriel Valley are selling their homes and using the money to buy nicer, bigger homes in the Rancho/Ontario area,” said Villagra. “Now the people from Rancho/Ontario area are buying homes in the Riverside and Redlands areas.”

            Villagra explains the whole home sales structure is moving towards 30-year fixed loans, which would explain the recent spike in escrow cancellations. ”After you sign documents, you have three days to cancel. I would cancel to switch to a 30-year fixed loan because it is better than a two or five year,” he commented.