Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.

Buzz: The surprising San Bernardino County housing market last year had 17% more sales despite 15% higher house payments compared to pandemic-iced 2020.

Source: My trusty spreadsheet used a longer-view lens to analyze 12-month periods of homebuying stats from DQNews dating to 1988.

The Trend

Despite plenty of pandemic challenges, including limited inventory in a choppy economy, 37,387 purchases closed last year, the No. 9 busiest year since 1988. Transactions were up 17% vs. 2020, the No. 2 biggest jump in 34 years. It was 11% above the 1988-2020 sales average.

The Dissection

Record-breaking prices didn’t throttle San Bernardino County homebuying.

Last year’s $446,583 average monthly median — highest in DQNews’ database for any year — was up 19% vs. 2020, the fifth-biggest jump. Note that prices have increased at a 4.6% annual rate since 1988.

Cheap financing was key, with mortgage rates averaging 2.96% in 2021 (the lowest on record) vs. 3.11% in 2020, the second-lowest in history. Note: Mortgage rates have begun 2022 on a noteworthy upswing.

Now, look at what that buying power and surging prices meant to a typical buyer.

The average purchase in 2021 came with an estimated monthly payment of $1,493 — median-priced home at average rates, with 20%-down financing— the fourth-highest since ’88. That is up 15% vs. 2020, the seventh-biggest jump. Compare that to payments increasing 2.2% annual rate since 1988.

Another factor

San Bernardino County builders added a modest amount to house hunters’ choices, selling 4,213 residences last year (No. 17 of 34). That was up 15% vs. 2020, the No. 7 biggest jump in 34 years.

Still, construction ran 15% below the 1988-2020 average. New homes were 11.3% of all sales last year (No. 24 share of 34) — vs. average share of 14.7% since 1988.

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … FOUR BUBBLES!

Is this bit of housing history remarkable or really unnerving? In the brief pandemic era — historically, not mentally — 11 San Bernardino County price records have been broken. So, 15% of the 75 new highs hit in a month since 1988 occurred in the past 22 months.

Jonathan Lansner is business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

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