How is the Fontana, California residential real estate market doing? It’s dependent on whether you are a buyer or a seller. Inventory is scarce for buyers. 205 active homes for sales were on the market February 16 of this year. This is a very low number for Fontana.
That is so much lower than the over 700 active listings during the high point of November 2013. That’s more than 300 percent more homes available. Back then it was about $269,000 for the average house cost. It was a buyers market then. Buyers had lots of time and could pick and choose.
Now, $436,926 is the house cost average of an active listing. If you waited a few years to get a home, you lost some significant money. But, it’s not only the increase of home prices, the rate of interest has been gradually increasing as well.
At this time Fontana has an inventory 5 year low point. January, 2013 had more than 500 houses on the market. The number peaked at more than 700 houses November, 2014 and it has been on a decline ever since.
The law of supply and demand is doing a faithful job. As there is less home inventory, the prices of homes continue to increase.
Quite a few sellers are keeping their properties with the thought that the value of their home is going to keep going up. That may be for awhile, but real estate is cyclical. There comes a point where the pendulum starts swinging the other way.
But, there are so many people who have blinders on when it comes to real estate cycles. When you take those blinders off, you have a stronger potential to win in any kind of real estate market.
In moving on to commercial realty, there has been a newly developed $3.15 million purchase of a 2,500 square foot retail property in Fontana, California located on Slover Avenue. It is a triple net leased single tenant piece of real estate. A Starbucks Coffee shop occupies it and it has a drive through window.
To find a single tenant new construction real estate property in a prime area is pretty hard to do – this is even more so when it comes to Southern California. And in a seller’s market, the seller is likely to get some offers that are pretty competitive. This was so for the Slover Avenue purchase. It ended up being all cash and a 1031 exchange.
The buyer had an urgent timing problem for completing the 1031 exchange. To accommodate the buyer, an escrow period of 2 days was arranged.
The per square foot cost of the building was $1270, and it was a 4.1% cap rate property.