According to a recent article in the Press Empire, Home prices are overheating in Inland communities, according to credit ratings experts. Fitch Ratings described homes in the metropolitan statistical area of Riverside, San Bernardino and Ontario as 15-20 percent overvalued in an update to its RMBS Sustainable Home Price Model.
The report looks at home prices in relation to people’s incomes and regions’ unemployment rates. Its findings show that people spend an uncomfortable amount of their incomes on mortgage payments. Families with a median income of $61,200 would need to allocate 22.7 percent of it to pay for principal, interest and taxes on a median priced home, which would cost $293,2000, Chapman University found in its recent economic forecast for the Inland Empire.
During the housing bubble, median single-family home prices for the Inland Empire peaked at $389,400, according to Chapman’s figures, and families needed 31.9 percent of their income for it in 2006. Fitch found that home prices became overvalued in 2014 after three years of being what it called “sustainable.” At the peak of the housing bubble, homes were 25 percent overvalued. Inland prices will increase 5.8 percent this year, moderated by construction of new homes, Adibi predicted.