After the big increases in 2013, national price gains have been easing due to modest rises in inventory and less than expected demand. May 2013 to May 2014 prices rose by 8.3 percent; but annualized June numbers show a rise of only 7.5 percent (CoreLogic home Price Index).
Locally – after 22% increases in 2013 — pricing has remained steady, but average days on market (DOM) is increasing in the Temecula, Murrieta and Elsinore markets, signaling a slowdown in the sales cycle. Menifee, has shown a decrease in DOM with an increase in inventory indicating a slight market pick-up for that area. Market Action Index still favors a seller’s market in all local areas, but not as strong as in the previous two months. Inventory has remained steady in the last three months.
The decrease in local unemployment rates — down to 5.6% in Temecula and Murrieta — and the projections for future job growth (36+% according to Sperling’s) indicate growth in future demand for housing. Still low interest rates are favorable, but conforming loan qualification limits have decreased the eligible FHA buyer pool.