A copy of this report was recently provided to our local officials for the City of Wildomar. We hope this information may prove helpful in determining city budget forecasts for the coming year as they evaluate the impact the downturn in our housing market has had on their revenue stream.
Of course property tax revenue is just one source of income for the city but a major one. As the state continues to wrestle with a budget that may or may not include some trade-off between property taxes and vehicle license fees, a city like Wildomar, California‘s 2nd newest city, needs to know where current property values are.
As you look at the attached chart and graphs, you will notice that the number of sales has declined steadily through 2007 while median values continued to grow through 2006. Total home sales value peaked in 2005 at more than $147 million dollars with 317 homes sold, a number that fell to just $95 million in 2007 with just 218 homes changing hands.
Spurred by declining values, a surplus of inventory to choose from and attractive interest rates, sales rebounded in 2008 to post a higher sales volume than ANY year during the previous five years. Even considering the impact of 35% decrease in median price since the 2006 peak, the city will still end this year with total sales revenue nearly equalling it’s 2005 volume of $147 million. That this volume of sales continue is vitally important to this new city as is addresses the impact of Prop. 8 on future property tax revenues.
By tracking these numbers an investor or prospective homebuyer can determine where they think the market is. As I pointed our last August, one month of sales increase doesn’t mark a trend. But as sales volumes continue to grow that will lead to the continued absorption of our excess inventory, the return to a more stable market and the end of the rampant price declines – 30% in just the past year. I am expecting to start seeing that stability develop by late 2nd to early 3rd quarter this year in our local market, possibly sooner depending on mortgage interest rates and federal stimulus incentives.
Please feel free to add your own comments and outlook on this information.
‘ Five Year Housing Chart for Wildomar, California’
The opinons in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational person should agree, these views may not reflect those of SRCAR, ActiveRain or any local or state government or other mental institution.