As property prices continue to climb across Southern California, Riverside County has emerged as the region’s leader first quarter with the highest price increase year over year showing an average 23% gain according to a new report by Coldwell Banker Realty, the area’s No. 1 real estate brokerage. The data is based on closed sales transactions recorded by the Multiple Listing Service. San Diego, Orange and Los Angeles Counties followed with 14% to 15% average first quarter year over year gains. Inventory levels throughout Southern California also continue to decline, with an average of one and a half months supply during the first quarter (MLS wide), representing a 48% decrease over first quarter last year.
“This data tells a big story because the pandemic and how it would affect the real estate market was still a big unknown through March of 2020,” said Jamie Duran, president of Coldwell Banker Realty in Southern California. “The big surprise is Riverside, as it continues to be the affordable price leader. Thanks to the new virtual work world, where location is less of a factor, buyers are placing a bigger premium on larger homes with room for home offices, home schools, gyms and plenty of outdoor space.”
“Inventory across Southern California is at 1.5 months’ supply, which is incredibly low. This means different levels of absorption in each region, but all very low. For example, in San Diego it means if nothing else comes on the market, we will be out of inventory in less than three weeks,” she added. “This continues to create demand, pushes prices up, and causes bidding wars. As a buyer, working with an agent is vital because of their robust network, access to immediate inventory and sales knowledge with negotiation skill sets to get offers accepted is key. Sellers also do better when they work with agents because their home gets marketed to the maximum number of buyers, which maximizes their sales price and they get assistance navigating through the many multiple offers and with negotiations to achieve higher net sales prices. There’s no doubt some COVID-19 constraints have kept inventory low, but with things loosening up due to more vaccines and less city and county guidelines, we may start seeing more listings in the next few months. Despite the strict health and safety precautions our agents are taking, we’ve seen a good number of homeowners concerned with safety and not wanting strangers in their homes, which has kept many properties off the market. Also, government concessions and aid to renters, as well as homeowners approaching foreclosure due to the pandemic, have kept people in their homes and inventory off the market.”
Duran says that as government and bank concessions, such as forbearances, begin to lift, we might see supply and demand move. “Eventually we’ll see an end to the COVID-19 concessions that have allowed renters to stay in housing and have caused landlords not to sell, and then those same landlords could add inventory to the market. We’ll see bank-owned sales or even more distressed homeowner sales bringing an influx of inventory on the near horizon. When that happens, the market often starts to flip to more of a normal or even buyer’s market, which we could see by the end of the year,” she explained.
The luxury market over $5 million followed suit, rising by 91% in closed sales with 483 closings during the first quarter compared to 253 closings during the same period last year, with record sales prices overall. Of these luxury sales over $5 million, 96 are $10 million and above compared to only 42 during same period last year.
“Pandemic challenges have been far less significant for buyers and sellers above $10 million, who are generally not stretched. They don’t have to sell, have more time to make decisions, and their moves are more related to lifestyle and desires,” said Duran.
Below are some additional findings from the First Quarter 2021 Coldwell Banker Realty market data report:
- Average Sales Price: Riverside led the Southern California housing market with the highest average sales price increase of 23% during the first quarter of 2021, with its average price jumping to $557,537 in the same time period from $493,172 in 2020. San Diego followed with the next highest increase of 18% with its average price increasing to $857,957 in 2021 from $769,537 the previous year. Los Angeles home prices jumped 15% first quarter of 2021 from an average of $1,041,177 compared to $953,400 in 2020. Orange County barely surpassed Los Angeles to lead the region in highest prices with its average at $1,067,792, an 11% increase over last year’s $1,016,571 first quarter average sales price.
- Inventory: Inventory was scarcest in San Diego County with less than one month of inventory available throughout the first quarter of 2021, a 64% drop over the same period last year. Riverside followed with 1.5 months of inventory over the same period, representing a 65% decrease vs previous year, then Orange County dropped 25% to 1.7 months, and a 21% decrease in Los Angeles with 2.1 months of inventory in the first quarter of 2021.
- Days on Market: Riverside experienced the largest decline at 56% with an average of just over 20 days on market during the first quarter of 2021 down from an average of 44 days on market during first quarter 2020. San Diego followed with a 54% decline to just over 10 days during the first quarter of 2021 from an average of 22 days during the same period in 2020. Orange County experienced a 52% decline to an average of 14 days on market during first quarter 2021, down from an average of 29 days the same time last year, and Los Angeles County showed a 39% decrease to an average of 17 days on market in first quarter 2021, down from 27 last year, same time.
- Units Sold: First Quarter 2021 over same period 2020 comparison shows Los Angeles County with the highest number of listing units sold with almost a 21% increase at 15,598 while Orange County’s number increased by nearly 22% to 7,637 listing units sold, Riverside County’s number increased by just under 15% to 9,314 units, and San Diego County increased 5% year over year to 8,114 listing units sold.
- Average Price Per Square Foot: With Los Angeles County’s $517 average price per square foot, it emerged as the highest priced county in Southern California in first quarter 2021. Orange County followed with an average price of $491 per square foot, San Diego County with $443 average price per square foot, and Riverside County with an average price of $248 per square foot. All counties enjoyed an average 14% increase.
The Southern California Housing Market Report is a monthly report produced by Coldwell Banker Realty.