As we enter the new year, a sluggish January housing market in San Bernardino often mirrors the chilly weather finally arriving in our usually sunny Southern California. The market typically starts off slow as buyers and sellers regroup after the holiday season. This year is no different. While it's not as slow to move as in past years, the current housing market in San Bernardino is significantly influenced by current mortgage rates and inventory levels.

Current Market Conditions

The San Bernardino County housing market is currently experiencing a buildup in inventory, primarily due to the impact of high mortgage rates. With rates consistently above 7%, many potential buyers are finding it challenging to enter the market. This psychological barrier has led to decreased demand, resulting in a slower start to the year compared to the hot beginnings of 2021 and 2022.

In mid-July 2024, mortgage rates dipped below 7%, even reaching below 6.5% for a period. This temporary decline sparked a brief increase in demand and activity. However, as economic indicators strengthened and political changes occurred, rates rose again, peaking at 7.15% in late December. This is the highest rate seen at the beginning of a year since 2001 when rates exceeded 8%.

Inventory and Supply Constraints

Currently, the housing inventory in San Bernardino County stands at 4,585 active listings. This is a decrease of 16% from the peak in October 2024, yet it remains relatively close to levels seen in 2020. The average inventory from 2013 to 2020 was around 4,710 listings. The reluctance of many homeowners to sell due to their existing low fixed-rate mortgages has contributed to the limited supply.

Around 81% of Californians with a mortgage have a fixed rate below 5%. This makes many homeowners hesitant to list their properties, as they would be giving up favorable loan terms. In 2024, the number of homes missing from the market was 31% lower than the three-year average before the COVID-19 pandemic.

Demand Levels

The demand for homes is currently at its lowest since tracking began in 2012. The average demand level from 2013 to 2020 was approximately 1,358 pending sales, which is 40% higher than today. With high inventory levels and low demand, the Expected Market Time (the time it takes to sell a home) is significantly longer.

• Current Expected Market Time: 142 days.
• Comparison to Last Year: 98 days.
• Pre-Pandemic Average: 106 days.

What Lies Ahead

For buyers, the housing market in San Bernardino is expected to gradually warm up as we move toward spring. Demand typically increases as the winter months progress, particularly as many homeowners wait until spring to list their properties. May is usually the peak month for new listings, which could lead to a tighter supply as demand rises.

For sellers, it is crucial to price homes realistically. With mortgage rates remaining above 7%, buyers are unlikely to stretch their budgets. Sellers should carefully analyze recent comparable sales to determine their home’s Fair Market Value. Overpricing could lead to extended market time and reduced buyer interest. Sellers can find out what their home is worth with our tool and get an instant, no-obligation market value report of their home.

In conclusion, while January may feel cold in the housing market, changes are on the horizon. Buyers and sellers alike should stay informed and be prepared to navigate the shifting landscape as the year progresses.