Today we’re answering the Question, How’s the Desert Real Estate Market?
IT’S A GOOD NEWS STORY FOR BOTH HOME BUYERS AND HOME SELLERS
The Desert Real Estate Market is a Good News Story for both Home Buyers and Home Sellers. Prices in the Valley are up across the board, much like the rest of the country. A Lack of Inventory, and Increased Demand from people living in Urban Cities leaving cities with high population density in search of a better quality of life that’s also more affordable.
In the most recent session with Michael McDonald with Market Watch, LLC and Walter Neil with Franklin Loan Center , they talked about current real estate market conditions in the Coachella Valley, comparing it to last year and looking forward to what we can expect to see for the balance of 2021.
HOME PRICES ARE UP : MORTGAGE RATES ARE DOWN
At the same time that prices are up, (good for Home Sellers), Interest Rates are at near historic lows, 2.75% at the time of this writing, (Good for Home Buyers). Household incomes are also up, (5.9%) from last year. Affordability is up, Walter showed an example of a home priced 7% higher, the monthly mortgage payment was actually less due to lower interest rates.
MORE HOUSE FOR THE MONEY IN THE DESERT REAL ESTATE MARKET
When we compare similar homes in different areas in So Cal we can easily see the value and why people want to be in the Desert Real Estate Market. Example; a 2,500 Sq Ft Home in Orange County would be $1.1M – $1.2M where a similar home in the Desert would range between $600,000 – $975,000 depending where you bought. Another example; for a 3,500 Sq Ft Home in Orange County you would pay between $1.3M – $1.9M. LA County would be $2M-$4M. A similar house in the Desert would be $1M – $1.5M. You just get a lot more house for the money in the Coachella Valley, even with double digit gains in the median home price in most cities.
VALLEY HOME SALES ARE UP
Sales are up 13% from one year ago in the Desert Real Estate Market, with the largest increases in La Quinta, Palm Springs, Rancho Mirage and Palm Desert. Single Family Detached Home Sales were up 18%, while attached homes were up 3%. Sales increases were in higher priced homes, $600,000 – $1m were up 47% and $1m – $2m were up a whopping 62%.
Low inventory and High Sales in the Desert Real Estate Market have produced a record low Months of Sales Ratio. As an example, there are currently about 1,200 homes of all types on the market in the 9 main cities of the Coachella Valley. At the current rate of sales, it would take 1.5 months to sell all of the homes on the market assuming no new properties entered the market.
In this environment, we’re seeing more multiple offer situations pushing prices above asking price. If you’re a cash Buyer, that may not be a problem for you. But if you’re getting a loan, the property must appraise creating a difficult situation for Home Appraisers, where each sale in the Desert Real Estate Market is up from the one before.
IN SUMMARY, THIS IS NOT LIKE 2006
Unlike the boom of 2005 -2006 and the Bust of 2008 – 2009. Our financial and mortgage system is strong and homeowners have equity in their homes today they didn’t have in 2008. Unlike previous years where homeowners in trouble could not sell for what they owned, which created a cascade effect with short sales and foreclosures. Homeowners in the Desert Real Estate Market can in most cases sell at a profit. They can pay off their mortgage and still have some cash left over.
If you’re thinking about Selling your Home in the Desert Real Estate Market, this could be your Window of Opportunity; knowing what the market is doing and understanding where it’s headed will be critical if you want to sell for the highest possible price. Call me today to find out what your home could sell for in this environment. Call for our Free Home Sellers Guide (760) 218 – 5752 or send me an Email