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

Buzz: Riverside County’s luxury housing market had the third-largest jump in asking prices in the nation for the fourth quarter.

Source: Realtor.com created a ranking of high-end housing in 95 U.S. counties based on year-over-year changes in listing prices. The study defines the luxury market as the costliest 5% of homes. It then calculates this niche’s “entry-level” price — i.e., the lowest one — as the high-end cost benchmark to compare with the previous year’s market conditions.

The trend

Riverside County’s luxury housing market had an “entry-level” cost of $2.28 million in the fourth quarter, a benchmark that jumped 46% in 12 months.

That gain was topped only by two Colorado counties near Denver: Jefferson at $2.97 million, up 81%, and Arapahoe, at $2.51 million, up 49%.

Nationally, the $3.4 million luxury entry price was up 14% for the year.

The dissection

Riverside County has the housing that meets the pandemic era’s wants — spacious, non-urban living with some relative bang for the buck.

But that niche has proven to be harder and costlier to find. A Realtor.com scorecard ranked Riverside and San Bernardino counties as the U.S. market with the second-biggest drop in homes-for-sale inventory and the largest jump in overall listing prices at year’s end.

Who knew a pandemic could flame a homebuying frenzy for the upper crust’s housing in California? This luxury ranking’s 20 largest gainers were found in five other Golden State counties …

San Luis Obispo: $3.34 million, up 44% in a year, the fourth-largest gain among 95 counties studied.

San Diego: $5.38 million, up 42%, No. 5 increase.

Santa Barbara: $18.87 million — the nation’s price leader — up 40%, No. 6 increase.

Monterey: $9.26 million, up 39%, No. 9 increase.

Contra Costa: $3.16 million, up 33%, No. 18 increase.

Let’s not forget two of Riverside County’s ocean-proximate neighbors had luxury gains, too — albeit smaller upswings: Los Angeles County’s $8.21 million entry price was up 16% (54th among the 95), and Orange County’s $5.96 million was up 13% (No. 63).

Another view

You could say luxury house hunters have learned a Southern California’s real estate secret: Riverside County is one of the region’s best housing bargains.

Just ponder a quick search of Southern California listings to see what a buyer might get at prices around Riverside County’s $2.28 million luxury entry price tag.

Let’s start with a listing in the city of Riverside, a home built in 1991 with four bedrooms and five bathrooms in 6,584 square feet on a 59,000-square-foot lot.

Compare that with a West Hollywood home built in 1924 — three bedrooms and two bathrooms in 1,760 square feet on a 5,431-square-foot lot.

Or a North Tustin home built in 1989 — five bedrooms and five bathrooms in 5,545 square feet on a 25,000-square-foot lot.

Or an Ocean Beach home built in 2007 — six bedrooms and four bathrooms in 3,786 square feet on a 7,000-square-foot lot.

And in San Bernardino County — not included in Realtor.com’s survey — you’d get a Chino Hills home built in 2007 with five bedrooms and five bathrooms in 4,277 square feet on a 21,000-square-foot lot.

How bubbly?

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

Riverside County has some swank neighborhoods — from old orchard homes to desert mansions to large, newly built homes closer to coastal cities.

Understandably in this pandemic, there’s been a rush to buy larger living quarters, especially for folks who can afford the move-up. And I understand how low mortgage rates ballooned house hunter’s buying power.

But how long does interest remain in larger homes, especially in markets outside of job hubs, when the coronavirus (hopefully) is just a bad memory?

It’s all but certain that today’s historically low interest rates won’t last forever.

And huge appreciation rates in local housing markets are scary, no matter the underlying fundamentals.

Any bubble anxieties are tempered by an educated guess that the gaudy numbers may be partly a statistical quirk — inflation caused by the transaction explosion at the upper end, not skyrocketing values.