Have you heard the bad news about the real estate market? That the market is in free fall? Huge housing inventories are growing even larger? Foreclosures and Short Sales are flooding the markets? Sales are down with no end in sight? Buyers are staying out of a market that is sinking further and further into the abyss? It’s enough to make you circle the wagons and block out any thought of exploring the possibilities of buying or selling a property.
Don’t believe all you’ve heard
The network news reports on the national and statewide trends of doom and gloom. And, unfortunately, the local news often echoes these depressing figures. But our local market here in the Coachella Valley does not reflect that at all. In fact the market statistics vary from city to city within the Coachella Valley. Each city in the Valley attracts different kinds of buyers. And it seems, for all of these groups — the local market news is good and the outlook is promising.
I’m not saying we’re out of the proverbial woods or that it’s not going to be a long slow climb out of the hole that Wall Street and investment bankers pushed us into. But it certainly isn’t as hopeless and negative as it once was. And since a significant part of any market (whether it’s stocks, commodities or real estate) is the perception of what’s happening – a negative perception keeps buyers from buying and sellers from selling. So let’s shed some light on what’s happening in here. I think you’ll be pleasantly surprised.
Local Sales Activity
From December 2010 to December 2011, statewide sales were down by 9.5 %. Sales in Palm Springs were up 21.3 %. The reason why we increased while the rest of the state decreased seems to be threefold. The demand for second homes for retiring baby boomers is increasing – many are resettling here. Gays and lesbians wishing for either retirement or second homes are still finding the desert attractive. Canadian buyers with cash are coming down and buying up attractively priced properties as second homes. So we are drawing people that have not been hit as hard as the rest of the population.
Inventory
From December 2010 to December 2011 – Statewide inventory was up from 4.6 months to 4.9 months – an increase of .3 months. Palm Springs’s inventory of homes for sale was down 22%! From 6.4 months to 4 months. Again, the local market is definitely better than what is happening across the state. The properties that were being sold for bargain basement prices are gone. Buyers scooped up those properties in the years following the sharp decline of the market. Realtors are now having a more difficult time finding decent homes for buyers in the lower and middle price ranges.
Foreclosures
The statewide average of Foreclosures for sale was down 1% for 2011. Palm Springs foreclosures were down 42.9% from last year numbers! Our local market is getting rid of its foreclosed homes while the state is adding to its supply.
Prices.
Prices are the last piece of the puzzle to fall into place. When inventories shrink down to competitive levels and Foreclosures and Short Sales are no longer forcing down the market, prices start to rise. The market seems to be positioning itself for this last piece of the puzzle to fall into place. By comparing ourselves with the state’s Sales, Inventory and Distressed property figures, we are poised better than most areas for a recovery.
Not as bad you thought – right? It’s not a bright and shiny vision but it’s certainly not as gloomy as the national statistics tell us it is. There is solid improvement in this local market.
So when you hear the sky is falling from those “experts” – take it with a grain of salt. Every area has very different forces affecting the sales, inventories and prices. I hope you learned a little bit more about our market and forces shaping it. But most of all – I hope you always remember – all real estate is local!
Statistics taken from California Association of Realtors/ local Multiple Listing Service.
JeffPalmerRealtor's Blog 
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