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Archive for the ‘State of the Market’ Category

Welcome to my first 2013 blog post!

I’m going to be much more attendant to the blog this year.  There is so much happening in the market right now.  It has exploded – prices are up – inventory is down.  For those who have been waiting for the bottom — it happened about 6 months ago.  If you’re interested in having a place in Palm Springs or Coachella Valley — contact me now.  Prices are still low and interest rates are at near historic lows…

Here is a recent article from our local newspaper — The Desert Sun.
Coachella Valley home sales, prices continue rise
Written by Mike Perrault The Desert Sun
Jan 05
mydesert.com
Home sales, prices up

Here’s how home sales and prices fared in November compared to November 2011 across the state:
Coachella Valley
Median price: $218,000, up 21.1 percent
Sales volume: 793, up 6.4 percent
Riverside County
Median price: $229,000, up 17.4 percent
Sales volume: 3,274, up 10.2 percent
Southern California
Median price: $321,000, up 16.7 percent
Sales volume: 19,285, up 14. 2 percent
California
Median price: $291, 000, up 19.3 percent
Sales volume: 37,481, up 14.7 percent

The Coachella Valley’s housing market continued its recovery last month with a jump in sales and a fifth straight month of double-digit, year-over-year percentage price increases, a new report shows.

The median price — half sold for more, half for less — of a home in the valley rose 21 percent to $218,000 in November, San Diego-based real estate information services firm DataQuick reported.

Nearly 800 homes sold last month, a 6.4 percent increase over November 2011.

The trend of price increases and improving sales was seen statewide. Sales rose 10.2 percent in Riverside County and 14.2 percent in Southern California, DataQuick reported.

Some 37,481 homes sold statewide last month, a 14.7 percent increase from a year ago, and California’s median price jumped 19.3 percent to $291,000 from $244,000 in November 2011.

Don Faught, president of the California Association of Realtors, said housing markets with higher priced homes performed better last month compared with lower priced areas.

“The negative impact of a lean housing supply on home sales is becoming more apparent, especially in markets with more distressed properties,” Faught said. “In lower-priced markets, home sales declined, whereas sales of mid- to higher-priced homes posted strong increases because there is greater supply.”

Nationally, sales of previously owned homes rose 14.5 percent in November to a seasonally adjusted annual rate of 5.04 million units, the highest level in three years, the National Association of Realtors (NAR) reported.

A sharp decline in inventory is again beginning to give sellers some bargaining power in some markets, NAR analysts said.

DataQuick analysts said sales for all of Southern California were the highest in six years amid strong demand from investors and move-up buyers.

Higher demand, triggered largely by ultra-low mortgage rates, has coincided with the dwindling supply of homes for sale to push up prices, said John Walsh, DataQuick’s president.

“That’s not the only thing fueling these sales gains,” Walsh said. “Investor activity and cash purchases remain unusually high, and more buyers feel confident about their jobs, the economy and the likelihood housing prices have bottomed and are likely to rise. We’re also seeing more non-distressed sales, where people sell at a profit and buy another house, triggering more move-up activity.”

About 33 percent of single-family home sales in the valley were distressed properties in November, down from 57 percent the same month a year ago, according to a separate report from the California Desert Association of Realtors (CDAR).

Only 18 percent of condo sales were foreclosures or short sales, down from 35 percent a year ago, CDAR reported.

Canadian commercial contractor Michael Simonot and his wife, Lynn, from Calgary, were able to snag a foreclosed Rancho Mirage home by making a bid immediately after it came onto the market.

New home purchases continue to make up just a small share of overall sales, with about 500 expected sales this year in the Coachella Valley compared to peak years such as 2004, when 5,535 new homes sold, or 2005 with 5,490 new-home sales.

Ann Ritchie, CDAR vice president in Palm Desert, said average prices have been rising for several months, and sales are continuing to outpace available inventory.

“There are ready, willing and able buyers, but they are cautious,” Ritchie said. “They are looking for well-priced properties that are updated and have been well-maintained.”

There were about 2,063 single-family homes and 877 condos listed for sale on the Desert Area Multiple Listing service, up from 1,815 single-family homes and 767 condos in October, CDAR analysts said.

But the valley’s inventory has plummeted compared to November 2010, when there were 6,259 homes for sale, or November 2007 when there were nearly 9,600 on the market, CDAR reported.

Similarly, the inventory of homes for sale nationally fell to just over 2 million in November, the lowest level since the end of 2001, NAR reported. The Realtors’ group said it would take 4.8 months to sell that supply, and that it considers a balanced market to have a 6-month supply of homes.

Jim Franklin, broker associate with Prudential California Realty in Palm Springs, said some homeowners have chosen to keep their properties off the market rather than accept lower prices than what they paid.

Area Realtors said after the housing bust, home values plummeted so much that many homeowners owe more than what their residences are worth. Others still don’t have enough equity to sell their home and make a down payment on another property.

Inland economist John Husing said about 44 percent of homes with a mortgage in the valley were “under water” in the second quarter, according to the online real estate information tracking firm Zillow.

Nationally, there are fewer first-time buyers because they face tighter credit requirements and often must compete with eager investors. A survey of 3,000 agents showed first-time buyers accounted for 31 percent of sales from Oct. 22 to Nov. 5, for instance, when it’s normally closer to 40 percent of the market.

In the valley, condo sales rose 18 percent last month, DataQuick reported, with the median price increasing 8.1 percent to $186,750. The median price for previously owned homes rose 25.6 percent last month to $226,000.

CDAR, which tracks sales differently based solely on the Desert Area Multiple Listing Service, reported the average sale price for a condo rose to $179,600 last month from $166,000 in November 2011.

CDAR reported the average sale price of a single family home (excluding foreclosures and other distressed property sales) fell to $428,600 from $440,600 the same month last year, which Ritchie described as “somewhat of an anomaly.”

Kevin Stern, president of the Palm Springs Regional Association of Realtors and Desert Star Real Estate, said sales continue to be robust even as some purchases get sidelined or nixed because appraisals come in below the agreed-upon price.

“That remains a challenge,” Stern said. “I had two deals in two months fall through.”

Leslie Appleton-Young, CAR’s chief economist, said sales and price increases will “remain solid” as the new year approaches, although the state’s housing sector remains dependent on Congress preserving the mortgage rate interest deduction for homeowners.

http://www.mydesert.com/apps/pbcs.dll/article?AID=2012312240007&nclick_check=1

 

 

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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.

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The Desert Real Estate market is continuing to move.

Agents in my office are continuing to see lots of activity.  We’ve all been surprised how busy this summer has been – and the numbers tell the story…

Home sales activity in Coachella Valley has surged 33 percent through June, with 4,615 valleywide sales — 2,598 happening in the second quarter of the year. The gain has been sustained since 2007.

“The measurement of active buyers in the marketplace, and deals getting made, is showing a dramatic increase,” said Bob Thomas, head field consultant for Real Data Strategies, the Brea-based firm that provides quarterly data to the Palm Springs Sun for an assessment on housing sales.

Activity is up roughly 30 percent over a year ago, Thomas said, with Palm Springs market activity described as mixed.

The city’s ZIP code section of 92262, with 216 sales in the second quarter, posted a 12.5 percent gain in market activity and it’s up 17.3 percent through June over 2008 with a total of 359 sales. The 92264 ZIP code sector has tracked 4.5 percent fewer sales for the quarter — with 169 sales — and is down 17.3 percent for the year.

The average sale price on a Desert Area Multiple Listing Service property in Palm Springs under $500,000 was $210,937 in the second quarter. That’s down from $292,620 in 2008 and from $313,716 in 2007.

“This market is healing itself from the bottom,” said Greg Berkemer, executive director of the California Desert Association of Realtors.

“It collapsed from the bottom, and it’s healing itself that way.”

“The market is very different today,” Thomas said.

“We called the bottom three to four months ago,” said Fred Bell, executive officer of the Building Industry Association Desert Chapter. “I think we’re there.”

And since people are sensing the bottom has been hit – they are moving back into the marketplace.  Investors and first home buyers are now making offers on properties.

Personally, our office is seeing multiple offers on “great deals” – especially foreclosures.  It’s not uncommon these days to get 5-10 offers in on a property with the resulting purchase price well above the asking price.

So now’s the time to start seriously looking at the market if you are interested in buying.  With inventory still plentiful (but being reduced quickly) and interest rates still wonderfully low – contact me so we can find you the right home at the right price.

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