Although I was expecting the rate of appreciation to flatten going forward, I will admit that I was suprised by the large fall in average sales price from March to April. The average sales price declined 9% month over month to $386,000 which is only 1% higher than April 2013. Fluctuations in the average sales price from month to month are normal and the underlying trends continue to be positive. I see no reason to be overly concerned here and fully expect to see us gain some of this back next month. The lowest priced sale for the month in Redhawk was $245,000, for a condo, and the highest sale was $544,990.

Listings, after rising steadily the past couple of months flattened out in April, but are well above year ago levels which helps explain the slowing pace of appreciation. Sales activity jumped 58% month over month to the highest level we have seen in the past year. Favorable interest rates and more homes on the market to choose from caused buyer activity to jump.

Buyers have had a little more time to look over the past few months with the number of listings increasing. Even so, days to sell did not increase very much coming in at 61, just above the 60 day average being experienced for Temecula overall.

With sales activity up sharply and listings relatively flat it is no surprise that overall inventory fell. We are currently at just over a two month supply, lowest it has been in some time. This constrined inventory will help push price appreciation back into positive territory. 

The continued decline in distressed properties are one of the best indicators of how much our Redhawk – Temecula Real Estate Market has improved. Only 4% of the sales in April involved distressed properties compared to 20% in April 2013.

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.

Here is your May 2014 Temecula Real Estate Market Update Complete with Graphs and Analysis

While it is common to see fluctuations in the average sale price from month to month, and I have been expecting the pace of appreciation year over year to flatten, the average sales price drop experienced in April took me by suprise. Month over month the average sales price fell 7% from $410,000 to $383,000. This average sales price for Temecula is only 2% higher than we were in April 2013. New listings were up, as you will see in the next graph, and it appears as though many sellers got a liitle ahead of themselves and were priced high to begin with, which forced those needing to sell to lower their list price. The lowest priced sale in Temecula in April was $58,000 (mobile home) and the highest was $1,250,000.

While many communities in Temecula saw sales activity increase in April, compared to the year before, Temecula itself did not. Although total sales were up 6% month over month activity was 9% lower than a year ago. Listings, on the other hand, were up for the third straight month and were 8% higher month over month and 24% higher year over year. With new listings outpacing sales activity buyers had more choice than they did a year ago and didn’t have to rush to make offers. This is the main reason we saw the larger than expected decrease in average sales price. As sales activity in many other areas was up, I expect to see the year over year price trend for Temecula move back up in the months ahead.

Days to sell has been relatively stable for the past 5 months. For April we came in at an average of 60 days, which is less than 10 days more than we were last year. This isn’t bad at all considering the number of homes for sale is quite a bit higher than a year ago. 

The amount of inventory available trended up slightly to a 3.5 month supply, one month more than we were seeing a year ago, but still a fairly constrained market overall considering a 6 month supply is generally considered the benchmark. As one might expect, available inventory is lowest amongst the lowest priced homes and increases as the price point goes up.

The health of the overall real estate market in Temecula continues to improve. This is best demonstrated by the number of distressed properties we are seeing in the marketplace. In April, distressed properties (short sales and foreclosures) represented 9% of all closings compared to 32% of all closings in April 2013.