By Bruce Cathcart
April is a great month to be here in the Coachella Valley. It seems to be the month to “party” here in the east end of the valley with two weekends of “Coachella” and one weekend of “Stage Coach”. We usually get a little spring cleaning done at our home thanks to the pounding bass drums from the nearby concerts that knock the dust off those hard to reach ceiling fans. April is also typically one of our best months for real estate sales and closings, but not this year.
It drives me crazy to read and hear that the real estate market is in full recovery and continuing to improve nationally and in the state of California. While this may be true by averaging real estate market statistics or even by selectively picking certain markets across the country or state, it is misleading to believe that ALL real estate markets are doing as well.
For those of you who have not been following this column, this year I have been closely watching the inventory of single family homes and condos (residential properties) in the Coachella Valley through our local Multiple Listing Service (MLS). Each month I have compared the market activity of listings that have opened escrow but not yet closed (pendings) and the listings that have sold (solds) to the previous month and to the same month from 2013. This is the fourth month of tracking this information and an interesting trend is developing for real estate in the Coachella Valley for 2014.
Last month (March) according to the Desert Area MLS there were 1,070 pendings of residential properties in the Coachella Valley. There were only 879 pendings in April representing a month over month drop in sales activity of approximately 18%. Last year in the month of April there were 1,049 residential solds in the Coachella Valley. There were only 870 solds in April 2014 representing a year over year drop in closed sales of approximately 18%.
Overall inventory available to buyers this month was down again only slightly (2%) from approximately 4,220 properties available for sale at the beginning of April to 4,144 properties available for sale at the end of April. This means that the number of new listings that came on the market in April came close to, but did not keep up with the number of sales.
So what does this all mean? We all know that sales for residential properties in the Coachella Valley are “seasonal” with the best time to sell properties starting in mid-January and ending in mid-May. So far sales activity (both the number of pendings and solds) for the first three months of 2014 has followed the seasonal pattern of increasing each month while the inventory has remained stable. April comes along and disrupts the pattern with a drop in sales activity signaling an early end to our seasonal sales this year even though inventory continues to remain stable. While sale prices are still up considerably over the same time last year, of great concern is that the number of solds for the first four months of 2014 is down by an average of 19.5%. Since our overall inventory has remained relatively stable for the last 4 months, it can be argued that fewer sales at higher prices is the new “norm” for the Coachella Valley real estate market. But just between me and you, the hair is up on the back of my neck telling me to keep a close eye on the overall inventory numbers. If inventory increases dramatically over the next few months we can expect some serious price reductions in the near future. If the inventory remains stable then we will just have to get used to slightly higher prices and fewer sales.
Congratulations to my very good friend Sharon Stein who was the selling broker on this month’s top sale of a beautiful home in the Vintage Country Club that included 4 bedrooms and 5 bathrooms totaling 8,153 square feet on a 30,000 square foot golf course lot for $7,700.000.00. 64 homes sold in April for over $1 million dollars and of those 21 sold for over $2 million dollars (almost twice as many as last month!). Just across the tracks our lowest priced home this month was a fixer-upper in the Dream Homes neighborhood in Cathedral City proving once again that here in the Coachella Valley we have something to fit everyone’s budget!
Real Estate Tip of the week: This year don’t blow your income tax return on new hats! FHA financing requires only 3.5% of the sales price as a down payment. Invest that tax return in your future and buy a home! See your trusted real estate agent and let them guide you through the process. When you do your income taxes next year you will be glad that you did!
Bruce Cathcart is the Broker/Co-Owner of La Quinta Palms Realty, “Your Friendly Professionals” and can be reached by email at firstname.lastname@example.org or visit his website at www.laquintapalmsrealty.com.