New Homes Prices Moving Upwards in Riverside

Due to the approaching expiry of the lifting of federal tax credit new homes sale grew in Southwest Riverside County. The housing market rose by 7.1 percent from April 2009, according to data provided by the Riverside County Assessor’s office. In San Diego County the prices of new homes rose by 11.7 percent.

Since the $8,000 federal tax credit for new home buyers who did not own a home for three years ended on April 30th, demand for new homes grew in the region according to the real estate agents.

The housing market had slumped from the high of December, 2005 by around 59 percent in April, 2009 due to huge number of foreclosures. According to a Temecula based real estate agent, the tax credit did help in the jump of sales. San Diego witnessed a similar trend with the lower end market growing by about 14.5 percent since April, 2009. The housing market in San Diego was down by 35.5 percent from the peak of November, 2005.

On a national scale, the prices of new homes rose by 0.8 percent in April, 2010 in comparison to March, 2010 and 3.8 percent since April, 2009. San Francisco where the prices rose by 18 percent in comparison to April, 2009, is the only city which saw a faster pace in increase of home prices than San Diego.

The Federal tax credit was taken over by California tax credit on May 1, but it was allotted on first-come, first serve basis. By middle of June, the new home buyers had already reserved 80 percent of the allocated 100 million dollars. Now with the end of both tax credits, slower activity is anticipated in the housing market.

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