Riverside County housing inventories are down. The National Association of Realtors (NAR) reports that inventories fell by 1.3 percent in March, leaving inventories 21.8 percent below their year-earlier levels.

Home sales have now posted year-over-year gains in each of the last nine months. But in almost all of those months, the number of homes for sale has declined.

3 Reasons to Explain Why Riverside County Housing Inventories Have Fallen:

1. With home prices down by one-third from their peak, who wants to sell a house right now if they don't have to? That's especially true for the roughly 15% of homeowners who are underwater on their mortgage.
    
2. Banks have decelerated the foreclosure process after they were caught routinely passing off bogus documents to demonstrate ownership. That has slowed the pace at which they're putting Riverside County homes back up for sale.
    
3. While investors initially were buying up Riverside County foreclosures that could be fixed and flipped, or resold, for a quick profit, over the past two years, more investors have been buying inexpensive homes that can be rented out. Those homes are, for the most part, out of the for-sale pool for the near-term.

Riverside County Housing Inventories Down Only Temporarily?

Of these three reasons for Riverside County housing inventories to be down, the first two would imply that the downturn in listings is artificial, and possibly temporary. But the role of investors in today's market could make the drop more lasting.

The NAR report also showed that the West was the only part of the country to see a year-over-year decline in sales during the month of March. The drop was almost solely concentrated around properties priced below $100,000, where sales were down 19 percent.

Are there any other reasons you can think of that would be causing Riverside County housing inventories to be unusually low right now? We'd love to hear your comments.

Riverside County foreclosures continue to be the main reason why it's a tough time to sell. Fannie Mae is selling foreclosed Riverside County homes, but not to the general public.

If you have questions about Riverside County foreclosures, or Riverside County homes for sale, please don't hesitate to contact us or post them using our comment form.

Mortgages are netting households the biggest cost savings relative to rent in at least 20 years in Riverside County. And with home prices as low as they may ever be again, now may be the ideal time for would-be home buyers to consider throwing in the towel on rent, and take advantage of all the home ownership perks afforded by owning vs. renting.

Mortgages Higher Than Rent Since 1991

According to data compiled by Deutsche Bank from the National Association of Realtors and the REIS Inc. information service, those with home loans are benefiting from mortgages costing 0.8 percentage points less in last year's fourth quarter after being about the same as rents during the first three quarters. Mortgages have been 3.1 points higher on average since 1991.

Analysts John Perry and Nishu Sood noted in their report that falling home prices and still-rising rents accounted for the fourth-quarter gap. The median price of a single-family house fell 5.8 percent in the quarter, while rent payments rose 0.5 percent on average.

Rents averaged 14.9 percent more than mortgages during the last three months of 2011. The gap widened from the third quarter by 8.1 points, and rentals were more costly for the fifth consecutive quarter.

The differential points toward a rebound in homebuilding and a slowing of rent increases.

If you've been renting, with Riverside County mortgages being at or below record low rates, now may be the time for you to make the move and buy a home. We'd be happy to discuss the market with you, and talk to you about whether now would be the best time for you or not. Just contact us for a no-obligation consultation.

Use the comment form to contact us. Although your name and email address are required in order to comment, rest assured that your privacy will be protected. We never publish email addresses on this site.

Riverside County home buyers are looking for certain things in a home these days. If you're selling a Riverside County home, don't make these mistakes when sprucing up to get your home ready to put on the market…

There are a lot more mistakes to avoid when getting your Riverside County home ready to sell and we can help you avoid them. Contact us for more information and a free, no-obligation consultation about the current Riverside County real estate market.

Riverside County housing prices have already bottomed out and are on the rise. Other than a brief stumble in December, asking prices have been steady or rising for the last 8 months.

Rents are also on the increase, rising 5.6 percent nationally, year-over-year. Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners.

Relief for strapped renters may be in sight, however. Construction of multi-family buildings increased last year. These new rental units should start coming to market later this year, giving renters more choices and less competition.

Riverside County Housing Prices Already Bottomed

Nationwide, asking prices of homes for sale is up 0.5 percent for April, marking the 3rd consecutive month of rising asking prices.

According to the Trulia Price Monitor, 44 out of the 100 largest metro areas nationwide had year-over-year price increases, with 92 percent showing quarter-over-quarter increases.

New Riverside County Housing Also Recovering

New Riverside County housing starts are more than 30 percent higher than their low in early 2009, and asking prices on those new for-sale homes have risen for three months in a row.

Localized risk of a brief downturn in prices does exist due to the pending foreclosures that could set prices back in the downward direction, but it's believed that would be a short term setback for prices.

Since we're in an election year, we're not likely to see any new bold housing stimulus plans out of Washington. The political atmosphere is too charged for agreement on major housing policy issues now. And, because the market is now recovering, there's less of a sense of urgency than there was several years ago.

We'd love to know what you think. Are Riverside County housing prices finally on the upswing, or do you still see prices dropping? As you well know, real estate is very local, and there could be pockets of still diminishing prices, although the overall Riverside County housing outlook seems brighter. We'd love to hear your comments.