According to the California Association of Realtors (CAR) forecast, a “combination of high home prices and eroding affordability is expected to cut into housing demand and contribute to a weaker housing market in 2019.” With rising prices in big cities such as San Francisco, San Diego, Los Angeles and Sacramento, buyers continue to look towards the Inland Empire in hopes for affordable housing. Due to this behavior, Riverside market trends indicate an increase of $13,000 (3 percent) in median home sales over the past year.
However, according to Robert A. Kleinhenz, the Executive Director of Research at the UC Riverside Center for Economic Forecasting and Development at the School of Business Administration (SOBA CEFD), “the housing market in CA and the IE never really accelerated in recent years despite the economy being headed toward the longest expansion on record. With continued increases in home prices, recent increases in mortgage rates, and changes in the federal tax code that will limit homeowner deductions, the housing market will slow further in 2019.”
Last year, an analysis released by SOBA CEFD stated that they expected to see the real estate market “continue to progress at a solid pace for the foreseeable future” in 2018, which ended up being true. However, with the anticipation of fewer housing transactions in 2019 as determined by CAR, it is unclear how these trends will impact UCR students attempting to rent affordable housing. Rent trends in Riverside from 2018 indicate a gradual increase in average rent over time. The data also shows that some of the most expensive neighborhoods in Riverside are the ones closest to UC Riverside. Rohan Kamath, a third-year cell and molecular biology major, stated that “I feel as though UCR-run housing facilities can be a bit expensive for what you get. However, non-UCR housing seems to be fairly reasonable and affordable for most. There’s always options for people to get housing, and prices haven’t really changed for rent, unless you’re looking to buy a house.”
In the 2018 analysis, it stated that “the multifamily construction that has occurred in recent years will temper rent increases over the near term.” Kleinhenz said, “Riverside County had a large increase in Multifamily construction last year. This should temper rent increases, but the rental market is still tight, so rents will go up. Rental housing in college communities/neighborhoods tend to be expensive…[and] that will continue to be the case in 2019.”
It is clear that rent in the Riverside area will continue to increase during 2019, and as far as the general housing market goes, Kleinhenz stated that “the wild card is supply: Listings of homes for sale grew in the latter part of 2018. That could cause home prices to increase more slowly and have the potential to soften the anticipated decrease in sales.”
The CEFD aims to provide the Inland Empire community with economic forecasts and data analysis. According to the CEFD website the group “applies business expertise, understanding of public policy, and deep academic training to analyzing the regional, state, and national economy—producing economic forecasts, public policy analysis, and economic impact studies.”