Fewer people bought houses in Southwest Riverside County in
October, but prices held steady, according to data from the
Riverside County assessor’s office.

State and federal tax credits in the first half of the year
pulled potential buyers into the spring and summer, leaving a void
in the fall that resulted in fewer sales. The post-credit void,
combined with an unsteady economy, appeared to keep potential
buyers from the market.

Falling foreclosures, exacerbated by a moratorium among the
biggest lenders, squeezed supply and kept the median price in the
$200,000 to $215,000 range it has occupied for a year.

“The numbers aren’t surprising,” said Robert Martinez, research
director for MarketPointe Realty Advisors. “If there’s fewer homes
to sell, and fewer of those homes are distressed, you’re going to
get price stability and declines in sales volume.”

Southwest County’s median house price rose 0.5 percent in
October from September to $206,000, up 5.6 percent from October
2009, the assessor data said. That’s 8 percent above an April 2009
low, but 56 percent below a December 2005 all-time high.

Despite the relatively low prices, the number of house sales
slipped 19.4 percent from last October and 6.3 percent from
September to 1,076.

House sales and prices are a closely watched economic indicator,
because people buying homes tend to make thousands of dollars’
worth of other purchases on home improvements and furniture.

Temecula real estate agent Bob Bodemer said he saw a drop in
leads from his website in October as uncertainty about the jittery
economy kept buyers away.

“The people we were getting were extremely noncommittal,” he
said.

Federal and state tax incentives had the effect of motivating
homebuyers to rush their purchases into the spring and summer
before the incentives expired. The result was a lull in the second
half of the year.

A decline in San Diego County house prices may also have
depressed Southwest County demand, as fewer North County buyers
went looking for cheaper homes in Temecula and Murrieta.

In October, Standard Poor’s Case-Shiller Home Price Index
showed an 0.8 percent decline in San Diego County home prices, the
third consecutive month of declines.

Though buyer demand dipped, the number of houses for sale went
down, too, largely because of dropping foreclosures, real estate
agents said. Southwest County was particularly afflicted with the
foreclosure crisis that started in 2007: The number of borrowers
losing their houses skyrocketed from five in July 2006 to 1,199 in
July 2008, data from real estate analyst ForeclosureRadar
showed.

Sales of these foreclosures, plus houses priced for less than
borrowers owed on them (called short sales), have dominated much of
Southwest County’s housing market since 2007. As the pace of
foreclosures slowed in 2010, fewer houses became available, a trend
that grew stronger when lenders stopped foreclosing in the fall as
they corrected major procedural problems.

“My partner is a listing agent for Bank of America foreclosures;
we’ve seen a really small number of new assignments in the last
three or four months from them,” Bodemer said.

Interest in houses surged in November as buyers came to the
market to take advantage of record lows in mortgage interest rates.
Some real estate agents had an increase in office visits in
December as interest rates rebounded, and buyers sought to lock in
a deal before rates rose too much, Marketpointe’s Martinez
said.

But he doesn’t expect a higher demand in 2011.

“Job numbers are fairly dismal; there’s nothing you can hang
your hat on saying there’s going to be a recovery,” he said. “There
will be a few less corks popped at this New Year’s.”

Call staff writer Eric Wolff at 760-740-5412.