Market Watch Fall 2017
Here in The Real Estate Corner, we’re keeping an eye on the Desert Real Estate Market.
Leading Economist, Michael McDonald, is one of the principals in Market Watch, LLC. Michael along with his partners, study real estate markets, the US, and International economies and specialize in evaluating all aspects related to the real estate market including outside factors that play into how our market performs with cause and effect.
Twice a year Michael presents his report to the Top Real Estate Agents in the desert with their analysis of the local real estate market, where we’ve been and where we’re headed.
There are really two markets in the Desert; Full-time Residents who make up The Local Market vs The Second Home Market, and the Supply and Demand equation is quite different between the two.
“The health of the Valley housing market in the low, summer period, often indicates its performance in the spring.” Currently, there is a 4.4 month supply of inventory for all property types, which is down from 6.1 months supply one year ago. Indicating tight supply going into the season. There are positive sales and inventory numbers in all price brackets.
The leading measure for how much house you can buy is Median Household Income, it’s been up an average of 4.5% each of the past three years. The inflation-adjusted household income broke above the high of 1999 and is now at all-time highs.
The past six years of the housing recovery has been driven by low-interest rates on mortgage loans; now it’s getting help from higher wages.
Since the peak of the market in 2006, the percentage of people who own a home in the valley declined from 66% to 61.5%. As distressed homeowners who lost their homes in the downturn, move from renting back to homeownership again we will start to see an upswing in home sales over the next four years.
2006 marks the high point of the valley real estate market and 2011 marks the low point. Market Watch, LLC evaluates the market based on “Median” price as opposed to Average price, because average price is biased by a single large high-value sale, skewing the chart for the whole city. In their Median Price analysis by city we see:
La Quinta – Median Price $455,000
Up 85.7% from the low
Down 33% from the high
Indian Wells – Median Price $830,000
Up 53.7% from the low
Down 31% from the high
Palm Desert – Median Price $376,000
Up 31% from the low
Down 31% from the high
Rancho Mirage – Median Price $600,000
Up 41.8% from the low
Down 37% from the high
Palm Springs – Median Price $592,000
Up 76.7% from the low
Down 33% from the high
Indio – Median Price $305,000
Up 92.4% from the low
Down 19.8% from the high
The market continues to improve, gaining strength and momentum each quarter. As we move into our new season, they are projecting an increase in the number of sales and if inventories remain low, we will start to see upward pricing pressure.