Definitely the housing prices in our area have dropped tremendouly. The reason is REO homes in the 300K and lower range that are the ones driving the price down and making the regular priced homes hard to sell. The REO homes are sold within a few days on the market. The reason the inventory also has dropped quickly for now.

No one can tell the future. Two months ago, it was the units sold in Murrieta went over 33% from same period last year. Last month the units sold in Temecula went way over the same period last year.
Even with this current situation, many people are still looking for their dream homes and they will purchase the dream homes that they like and plan to live in it for 5 to 10 plus years.
We moved from the San Francisco Bay Area and bought 21 acres income producing property here in the Temecula West Hills in 1999. I hate to tell you how much we paid for it. We also bought a small ranch (2.5 acres) here in the Wine Country in 2000. We think we did well on these two properites.
I have several clients that are looking at properties that are over 5000+ , and the one we previewed are over $1mil.
I just sold a REO property in Aguanga today. It was on the market as short sale for a while. The buyer said they really love the home on the 2.5 acre, they plan to buy and retire there and they said they would have paid even much higher price for it.

Kathleen
It appears that with the continued loan re-sets and deteriorating economy that we can expect similar market conditions for the next two years, perhaps longer in some areas. Generally the greater the amount of new construction (built since 2005), the larger the inventory.

Much of the inventory in Riverside is not in the MLS, it is being held by lenders are REO. This fact is important because it affect the Absorption Rate. Take the number of homes sold in a given area in the last month, and divide it into the inventory, and you will get a Ratio we all the absorption rate.
500 homes for sale, we sold 50 homes last month, that is an absorption rate of 10 months. A balanced market is considered to be 6 months of inventory.

The problem we are having in most markets in your area is that we constantly have new inventory in the form of REOs. When supply goes up, price goes down.

If you are thinking of selling next year I suggest you start consulting with a Realtor NOW to get a handle on what you need to do in order to maximize your chances of selling. If you need a referral please contact me via my Trulia profile.

Our checking account balance, what defines a skosh, and the weight of family members at a reunion are three amazing proofs of man's ingenuity when it comes to predictions. You'll note that housing prices aren't included among these. That's because nobody truly knows. All we can do is look at the recent past and try to guess.

First, the facts: Over the last 12 months housing prices in Riverside have dropped from an average of 18% to $300K from $365K. Over the same time, inventory has dropped 15% from about 3,125 to 2,700.

If we believe in supply and demand, these numbers can't be good. You can see the chart for yourself here: http://frclsrtv.com/2008/07/29/will-riverside-real-estate-pr…

But the glass doesn't make the martini and numbers don't tell stories. The story today is that short sales aren't moving, inventories in some areas is approaching normal, and houses are selling again ... if you can compete with bank owned foreclosures.

So what, exactly, should you believe in? Well, there's enough bad news out there to make your eyeballs hurt. but I personally believe that the market will start to stabilize over the next year. It's never a bad time to buy or sell real estate. After all, they aren't making any more of it.

The question is always, buy or sell at what price? And that depends on each individual house and it's place in time. If you bought your house in the last few years, chances are you don't have the equity to sell. But if you've owned your house for a while, you might be surprised at what your house can fetch.

Thanks for the opportunity to help. You can reach me directly at 951-571-9229 or sean.giogianni@gmail.com if you need anything else.

Hi there Kathleen, wish we know the answer. The truth is nobody really knows. Nobody has a majic crystal ball. Everyone has an opinion. Only thing I can tell you are the facts. Housing affordability is at all time high in all parts of Southern Califirnia. Last quarter of 2006 homes prices were over priced 35% today in OC they are undervalued by 5% . There are still going to be foreclosures and short sales popping up everywhere. Interest rates are currently on the rise which is real important factor to consider. A great time to buy for sure right now. Little tougher too sell. The homes that are selling are in Alignment.

Hope this is helpful
Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
michael-barron@sbcglobal.net