What am I seeing ahead for Palm Springs and the Desert Cities Home Market? I would say :
Good Times AHEAD – the market has shifted throughout the Coachella Valley. The investors are still looking but not much for them that makes sense (the distressed properties disappeared – presently less than 8% of the sales and should decline to 0%) and the higher-end homes are selling. This is leading us to a much healthier market.
The number of homes sold this year compared to last year is much lower but the new homes sales is increasing: this is the sign of the recovered market. Fewer Investors, more home buyers.
The Boomers are a big part of this shift, the net worth of the area shows a significant growth and we expect the boomers to buy more retirement and second homes in our area in the next two years.
The Canadians who represented 85% to 92% of our market in the past 3 years, kind of went away (their $$ lost value to our $$ and the increase in our prices also added to fact that they are holding off buying homes in our area). They represent less than 15% of my buyers in 2014. THIS IS THE SHIFT. We loved what the Canadians brought to the table and we know they will be back as soon as their $$$ is back to par with ours.
All in all a healthier market, with US nationals buying again, all we need is for the inventory to keep steady in order to keep prices realistic and affordable for all.
We are now at the end of the “season” and we have seen some potential buyers stay shy because they did not believe prices could go up so fast and it “smelled and looked” like something we had seen before : “the bubble”
“Is this a new Bubble?” Here is the data that proves that “No it is NOT a Bubble”. As we have been saying all along, we are entering a stable market – Just a “regular Market ” with Buyers ready to buy and Sellers willing to sell.
We started this season with the wind in our back, still in the wave of prices increasing, inventory low and the outstanding sales of 2013!
A quarter into 2014 , it is a totally different picture and we certainly do have to revise our goals for the 2014 business year.
Talking with other Realtors we are hearing the same story.
How do I explain that? Looking at the sellers’ side and as well the Buyers’ side:On the Sellers’ side : the Media, the Realtors themselves were giving us all the indications that we were to expect the same interest, number of sales as the previous year. But this confidence was transmitted to the sellers and the properties listed at prices based on price increase that took place in the previous 6 months. So homes priced high and sellers confident they should be able to sell FAST and at LISTED PRICE.
On the Buyers’ side: our market was for the last 4 years, was based on Canadian Buyers: 80% of our market. In 2014, the Canadian currency lost 10% or more of its value at the very beginning of the year and our new listings were “overpriced”. (By end of our season, we are seeing a great number of price reductions). We lost the pool of buyers we were counting on.
I guess that we have to look at reality and understand that once again the market has changed. As Realtors we have to be on top of that game and just follow the “CHEESE”
Year over year January 2012 compared to January 2013 inventory and prices for Palm Springs and the Area
Condos up to 400K have increased in price as well as the single family homes up to 300K.
The total inventory is down 16.5% and inventory the bank owned properties is down 62% – The market got “cleaned” of a great number of foreclosures that impacted the prices all the past the year. That would explain the drop in price you can see for certain categories on the chart.
The average Sold Price to Listed Price is approximately 96% compared to 94% last year.