Real Estate Market Updates

Desert Real Estate Update – March 2010

The real estate world was very different in the Coachella Valley just five years ago. Prospective buyers streamed through crowded model homes while the builder's agents poked pins onto maps to reflect growing sales - some homes posting $10,000 price increases by the month.

It was fast and frenzied in '05 and '06 as price seemed to be no object, lenders were giving away money and affordability dissipated, squeezing many families out of the market. The picture is a stark contrast to today's market. While still recovering from the recession, many optimistic signs have been appearing.

While entry-level homes (under $250,000) continue to dominate the desert market we are seeing growing interest and activity in all price categories from the entry to level to over $7 million. Price continues to lead the market in almost every transaction.

Recent Desert Area MLS Stats

• Sales up 25 percent compared to '08 (personally, we are up 50% over our sales in '09)
• Of 9,238 total home sales, 8,204 homes sold for under $500,000
• Inventory continues to tighten up in our most popular second home communities
• Investors continue their interest in entering the market



Local Real Estate Busier Than Usual Through The Holidays

On December 12th I reported here that we were experiencing an exceptionally busy start in December. The usual lull between Thanksgiving in November and the second week of January has not occurred. This busy market right through the holidays, even during Christmas and New Year's weeks, is really surprising.

Our exceptional weather did not hurt. Southern California was the warmest spot in the nation (excluding Hawaii) for about 10-days. Here in the desert we experienced sunny skies day-after-day with temperatures in the mid to upper 70's (24º C).

I was fortunate to close out '09 by posting a 79% increase in the number of properties sold over '08. We are projecting another 50% increase this year as buyers continue to take advantage of some great real estate opportunities here in the desert. 

Investors Returning To The Market

Savvy investors are often the first to jump at a potentially profitable housing market and a new national survey indicates things are heating up. More than 12 percent of home buyers today plan to purchase a home or condo as an investment, compared to 5.6 percent just seven months ago, according to a recent Move.com® survey.

Bank owned property buyers account for 25.3 percent of consumers interested in purchasing a home. 42 percent of potential foreclosure buyers regard their purchases as investments, while 57.6 percent plan to live in purchased distressed property themselves on either a part-time or full-time basis.

Our '09 Property Sales Breakdown By Category:

• 39% Traditional sales
• 35% Bank owned properties
• 26% Short Sales

We are continuing to see inventory tighten up in the entry-level segment representing properties priced under $500,000. In some of our most popular communities in this price segment the 'winning offer' is now over the bank asking price in many cases. In fact, the most coveted properties sold in the last 90-days went for 1% to 5% over the respective banks asking price.

More Multiple Offers On Bank Owned Properties

Another trend we have started to see in the last 90-days is that banks are now accepting multiple offers over the course of five to seven days rather than acting immediately on an initial offer. The banks are aware of the increased buyer competition in this price segment.

About 90 percent of our sales in '09 were cash sales. That said we do have several good recommendations for those wishing to finance their desert home or condo.

Sales of Previously Owned Homes Up Again

On December 12th I reported here that we were experiencing an exceptionally busy December. The usual lull between Thanksgiving in November and the second week of January has not occurred.

Today the news media reported record November re-sales:

Washington (Reuters) - "Sales of previously owned U.S. homes jumped last month to their highest level in nearly three years, the latest sign that the economic recovery was gaining steam, after growing below expectations in the third quarter.

The National Association of Realtors said on Tuesday existing home sales increased 7.4 percent to an annual rate of 6.54 million units, the fastest pace since February 2007, from 6.09 million units in October. The rise was above market expectations for 6.25 million units."

I suspect we will see strong numbers reported again in for December as buyers continue to take advantage of some great real estate opportunities.

Seasonal Opportunities

Indian Wells Country Club

Traditionally we see a short pause in real estate activity from the middle of November until the second week in January. The holidays in November and December usually prompt desert-dwellers from other places to temporarily return to their roots for visits with family and friends. These travelers usually return to the desert beginning in early January-and usually after having had it with hometown rain, sleet, snow, and cold temperatures - and sometimes all of the above!

This little seasonal lull offers an opportunity for both desert visitors and potential home buyers alike; fewer people are on the golf courses and tennis courts and there is less competition for some of the best real estate bargains ever. So, grab your sunscreen and your shades and beat the crowds before the majority of our snowbirds return in January.

As always, please don't hesitate to contact me for further information or simply to answer a real estate question.

Palm Springs Real Estate Update

In the Palm Springs area these past six months we've seen a slight but significant increase in sales. More importantly we have seen the inventory of available properties shrink from a bloated 26 months supply to just five months of inventory.

Our buyers continue to take advantage of lower prices as properties remain competitively priced with short sales and bank owned properties. We are seeing these opportunities in all price ranges from entry level to luxury high-end estates. While my crystal ball is still in the shop, I'm suggesting that now is not the time to be a fence sitter!

Call me today for my short list of favorite opportunities in La Quinta and Palm Springs area real estate.