An Important Update for the Palm Springs Area Market

It’s time for a market update. Let’s take a look at how current conditions are contributing to rising prices and declining supply.

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 What’s going on in our local real estate market?

In general, we’ve been in a strong seller’s market recently. This can be determined by looking at the “months of supply” ratio, which measures the balance of supply and demand. In this case, supply refers to our current available inventory while demand refers to sales.

A balance of low supply and high demand is what leads us to a seller’s market in the realm of real estate. Our current ratio, which is at 4.2 months, is the lowest May 1 figure we’ve seen since 2013.

And the average number of days on market this April was 64—the lowest figure for that month in the last five years.

Returning to the subject of supply, let’s discuss how price range can impact these figures. For all price brackets below $700,000, the months of supply ratio is below six months. Homes at and above the $800,000 price point have experienced considerable improvement in terms of supply.

Now is a great time to enter the market.

Inventory, though, continues to shrink overall. As of May 1, there were 3,622 units available on our market. This is 870 fewer units than were on the market at this time last year.

Diminishing inventory is one half of what’s been driving up home prices, recently. And if typical seasonal patterns persist, inventory is likely to continue its decline until September.

Taking a closer look at appreciation, Cathedral City, Palm Springs, and Palm Desert stand out as the three local cities with the greatest price momentum for detached homes. These cities have 12-month gains of 15.6%, 12.7%, and 11.8% respectively.

Palm Springs has been the region leader in terms of price, with a current median of 
$656,100. This is 9.3% above the previous all-time high we saw in 2006.

With all of these considerations in mind, now is a great time to enter the market. Sellers have a great opportunity to take advantage of current market conditions. Buyers considering using financing to purchase a home are facing some urgency at the moment, though, as the impending rise of interest rates will negatively impact purchasing power.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What's Going on in Our Market Today?

Today I have an update on what our local real estate market is doing.

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Today I’m going to give you an update on what our local real estate market is doing.

Our absorption rate, or months of sales, is 4.4. This number is confirming that we are continuing our trend as a seller’s market. This is the No. 1 indicator that confirms this trend.

The strength of our seller's market is confirmed also by a days-on-market reading of 70 days, which is three days fewer than less month. This is also the lowest number of days on market since October 2013.

As you can see in the graph displayed in the video at 1:17, we see lower months of supply ratios in all price brackets, which indicates the Valley’s improving housing market is broad-based and strengthening in all price ranges.

As you recall, a balanced market is a six-month absorption rate. That said, while the months of supply for homes priced over $900,000 has dropped from 10.9 to 9.3, this price bracket could still use some improvement, as these numbers are still a little high and indicate a bias toward buyers.

On November 1, Valley housing inventory started, as it does every year, an inevitable rise. The 384-unit increase in one month was relatively small, however, when compared to previous years. That’s a positive, and it’s primarily due to the higher sales volume in the summer months. At 3,625 units, our current inventory is 725 units less than it was last year at this time.

Our appreciation, home pricing, and lower inventory point to a great time to consider selling your home in the greater Palm Springs area

Year over year, the changes in the median home price of the nine major cities show overall strong gains but also a wide variation in the numbers.

For detached homes, year-over-year go from 16.2% in Desert Hot Springs to -4.3% in Indian Wells. We see similar results for attached homes but with an even wider spread in year-over-year changes. Here, they go from a 23% gain for Rancho Mirage—which is great— down to -29% for Desert Hot Springs.

It should be noted that the number of sales in Desert Hot Springs was very low, and some of that decline was due to statistical variations.

Interest rates have continued to remain steady and are hovering at about 4% with minimal fluctuation.

Our appreciation in home pricing, and lower inventory point to a great time to consider selling your home in the greater Palm Springs area. For buyers, while there is more competition and well-priced homes are moving, the lower interest rates create a compelling reason to get into this real estate market.

If you have any questions about the value of your home or are interested in exploring investing in real estate in the greater Palm Springs area, we’d love to be the ones to help you out. Just give us a call, text, email, or check us out on the web at www.WillCookGroup.com.

As always, if you have any real estate-related topics or questions that I can answer, please give me a call or send me an email. I’d be happy to make a video about it.

See you next time!

What Is Happening in Our Palm Springs Area Market?

Right now, we’re definitely still seeing a seller’s market. But what changes have taken place since last year, and where is our market headed?

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With a 3.9-month absorption rate, our market is continuing its trend of favoring sellers. As time passes, the seller’s market we’ve been seeing becomes even stronger.

This is the first time we’ve seen inventory dip below a four-month absorption rate since 2013. However, certain other statistics have remained steady. For example, our average days on market has stayed consistent at 73 days for seven months now.

By looking at the months of sales by price range we can see that inventory has gone down since last year across every price point, with all homes priced below $300,000 having the lowest absorption rate. Homes at this price point have just 2.5 months of inventory.

Our Valley inventory continued to decline through the month of August, but this was expected because of seasonal trends. However, this decline occurred at an above-average rate.

Inventory as of September 1st, 2017 is at 3,182 units. This is the lowest number we’ve seen since 2014, but we can expect inventory to rise in the coming fall and winter months. However, the number is not expected to rise past 4,500 as we move into the 2018 selling season.

The seller’s market is only getting stronger.

The year-over-year change in the median price of detached homes across nine major cities shows that only one, Rancho Mirage, is lower. La Quinta had the largest year-over-year gain, at 13.9%. Followed by Cathedral City, which had a year-over-year change of 9.1% and Palm Springs with 7.9%.

The median detached home price in Palm Springs is only 1.3% away from its all-time high made in 2006.

The year-over-year change in the median price of attached homes shows five cities with higher prices and three with lower.

Also, with interest rates rising combined with the current appreciation of home pricing makes now a great time to consider selling your Palm Springs area home.

While there is more competition among buyers. As long as interest rates remain low, buyers still have a great opportunity to get into this market.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Market Update January 2017

What's going on in the Palm Springs market? I've pulled the numbers to give you a comprehensive look at how our market changed last year and where it's headed in 2017.

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What's been going on in the greater Palm Springs area real estate market?

With 6.3 months of sales, our market is balanced. This is part of a positive trend, though, as it is one month less than it was at this time last year. Remember, six months of sales (or absorption rate) is a balanced market. A higher number would favor buyers, and a lower number favors sellers.

If we look at the absorption rate by price range for all Coachella Valley area cities, we can see that the highest absorption rate is for properties listed over $1 million at 18.7. That means it would take 18.7 months to sell all homes listed at $1 million or above if no other home came onto the market. This is also a positive trend. At this time last year, the absorption rate in this price range was 20.9 months.

As you can imagine, the lower price points have a lower absorption rate because there are more buyers who qualify for those types of properties. Homes priced below $200,000 have the lowest absorption rate at 3.2 months of sales, which is also lower than last year when the rate was 3.9 months.

As of January 1st, inventory for the entire Coachella Valley stood at 4,585 units, which was 10% lower than this time last year. However, it's exactly the same number of units we had on the market on January 1st, 2015. Much of this is the result of higher sales volume numbers in the last few months of last year compared to a year ago.

At $340,000, our median price for detached homes for the whole Valley is effectively unchanged as of January 1st from last year at this time. However, this year's change in the median price for Valley condos has increased about $2,000, or just under 1%. The yearly change in the median price of individual cities shows a really positive trend for detached homes, but a slightly negative bias for condos. Palm Springs and Desert Hot Springs continue to be the Valley's leaders with 8.1% and 15.6% gains, respectively, while Palm Desert and Rancho Mirage each experienced year over year reduction of values.

After a period of stagnation in our market, the growing trend in long-term sales volume in both detached homes and condos is a very positive indicator in our market. Condo sales rose 9% year over year and detached sales rose 2.8% from last year. Since the Fed’s interest rate increase in December, interest rates are still hovering around 4% and slightly higher. Inflation is expected to increase in 2017, and as inflation increases, bond prices move lower, and mortgage rates typically increase. Most experts, however, don't expect interest rates to go above 5% in 2017.

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We think the market will remain strong, making it a great time to buy or sell in Palm Springs.

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Interest rate volatility along with market uncertainty is expected with the new presidential administration, but the economy seems to be strengthening. We're predicting that our real estate market will continue to improve overall, which makes now a great time to buy or sell a home in the greater Palm Springs area.

If you have any other questions for me or there are topics you'd like to see me cover in a video, don't hesitate to give me a call or send me an email. I look forward to hearing from you!

Market Update for the Palm Springs Area Market

Today we’re going to talk about what’s going on in the Palm Springs Area real estate market.

With 5.3 months of sales, our overall market has shifted more towards a neutral position with the bias towards the sellers. If we look at months of sales, or absorption rate, by price range, we see that inventory is comparable to last year’s in most price brackets except for in the $700,000 and above price point. In that price range, months of sales has increased somewhat.  Home prices below $300,000 have the lowest absorption rate at four months of sales, the same as it was last year.

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Home prices below $300,000 have the lowest absorption rate.

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As expected because of seasonal patterns, Coachella Valley inventory continued to decline through August, but at a higher than normal rate. As of September 1, 2016, our inventory stood at 3,730 units. This is 111 units higher than last year at the same time. On March 1, inventory was 6,000 units. This was 1,000 more than March 1 in the year before. This caused some concern at the time, but the numbers have now fallen to a number almost equal to September 1 of last year.

City median prices at the end of August still show strong gains, with seven cities having a positive year over year gain and only two, Cathedral City and Palm Desert, going negative. Desert Hot Springs had the highest change in pricing at an increase of 17.6%. This brings its price gain off of the 2011 lows to 122.9%, the highest of all nine cities. It should also be noted that a Palm Springs median price of $548,540 is only 8.6% away from its all-time high.

Interest rates have been hovering around 3.5%, despite threats of an increase from the Federal Reserve. It is a general consensus that over the next six months, interest rates will increase. However, they should remain below 4%.

Coupled with our appreciation in home pricing in the greater Palm Springs area and the threat of increases in interest rates, which is motivating buyers, it’s a great time to consider selling your home in the greater Palm Springs area.

If you have any other real-estate related topics or questions you’d like answered, please send me an email, give me a call, or send a text. I would be happy to answer your questions and may make a video about it.