|May 2014 South Temecula Real Estate Market Update Including Numbers and Analysis
One of the things that we have been expecting to happen is for the rate of appreciation to settle from the rapid increases we saw last year. There was a larger than expected drop in the month over month average sales price, down 5% in April to $375,000, which is 6% higher than where we were in April 2013. I have been expecting appreciation for 2014 to end up between 8% and 12% and expect that we will continue to see fluctuations in the month over month numbers going forward. Pricing is largely influenced by supply and demand and you will see on the next graph that supply growth is currently outpacing demand growth, which is not a bad thing for the South Temecula real estate market. The lowest priced sale in April was $230,000 for a condo and the highest priced sale was $720,000.
Although listing activity was flat for the month it has been trending upwards the past few months and there were 23% more properties for sale this April compared to a year ago. Sales, on the other hand, were up sharply 32% month over month and 9% higher than a year ago. There has been quite a bit of pent up buyer demand and while interest rates remain low I believe we will see a busy Spring/Summer selling season here in South Temecula. The continued rise in the number of properties for sale will also help appreciation from getting out of control.
With total listings unchanged from the prior month and sales activity up we saw the days on market decrease slightly to 57 days. Most areas of Temecula that I track have been seeing an average of 60 days so we are right in line with that number.
With sales up and listings flat month over month it naturally follows that total inventory fell. For Aprill we came in at a 2.66 month supply, which is relatively tight. A full month above where we were a year ago, but will below the 6 month level that is generally considered balanced.
One of the best indicators of our recovering housing market here in South Temecula continues to be the decline in the number of distressed properties (bank owned and short sales) that we are having to deal with. Distressed properties represented 5.5% of April’s closings compared to 25% of the closings in April 2013.
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