By Bruce Cathcart
January for the Coachella Valley real estate market is usually a month of recovery. Traditionally from Thanksgiving through New Year’s Eve a large number of home buyers, both investors and owner occupants, take a break from shopping for houses and focus their spending on the holidays. This usually lingers for a week or two into January before our market starts to really take off on what is referred to as our “season”. So far 2014 is right on schedule!
I receive hundreds of emails each week updating me on the national, state and local real estate markets. Even though one of my new year’s resolutions was to try and stay more focused, I just can’t stop reading this mountain of statistical data accompanied by the various author’s interpretations, opinions and predications. As my good friend Robert Mott, the owner of the La Quinta Wine Bar, is fond of saying, “I taste a lot of bad wines so you don’t have to!” So in this case I guess I read a lot of bad articles and opinions about the current real estate market so you don’t have to! By selecting the best of the internet offerings and applying local statistics from the Desert Area MLS, I plan to keep CV Weekly readers updated this year with accurate and relative information to use when making real estate related decisions… or at the very least, be better prepared to deal with real estate know-it-alls at the next cocktail party!
In the first part of last year we saw the demise of the REO market, the surge of the Short Sale and the combination of historically low interest rates with a lack of housing inventory that pushed prices up over 30% in many local neighborhoods to create a seller’s market. But toward the end of last year we saw this trend begin to change with an increase in the interest rate (by approximately one full percentage point), and a significant increase in inventory. Add to this the lack of sales in December and home prices in most Coachella Valley neighborhoods began to stabilize and in a few cases actually went down.
In July 2013 there were 2,799 homes and condominiums available for sale in the Coachella Valley (Palm Springs to Coachella). Today there are 4,226 available. In that same time period (approximately 6 months) the average sold price went up 8% and the number of actual sales went down from 871 in July 2013 to 593 over the last 30 days. Simply put, right now inventory is up, prices are up and the total number of sales is down for houses and condos in the Coachella Valley. While this may not be true for your specific neighborhood, this is what is happening across the Valley. If this trend continues look for home sale prices to come down again.
Will this trend continue? Right now it is still a little too early to say. This month I listed and sold an REO in Coachella in the $140,000.00 price range. 6 Months ago I would have had perhaps 30 offers on this property. I only received 6, but 6 offers is a lot of offers and a strong sign that there is still a pent up demand for properties in this price range and area. Last year in our valley there were 475 homes and condos (combined) that sold for over $1,000,000.00. In the last 30 days there were 49… or over 10% of the year’s total (one of which sold in Big Horn for $6,500,000.00!) and that too is a pretty darn good sign that the upper end of the market is still going strong!
I have read enough “expert” opinions recently to state that the majority of them all believe that mortgage interest rates and home prices will both continue to rise throughout 2014. Of course both fell slightly here in the Coachella Valley in our first month of the year. January for the Coachella Valley real estate market is usually a month of recovery. All of the brokers and agents that I have spoken with recently across the valley indicate that their activity (listing and selling) is up significantly which I too can confirm with my own experience so far this month. Together we will watch and see over the coming months if the Coachella Valley real estate market will continue January’s early signs or recovery or not.
Real Estate Tip of the week: Interest rates went down a little this week helping buyers and those looking to refinance their current home loans. If you have been sitting on the fence waiting for a sign… this may be your call to action!
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.