Palm Springs Area Home Prices and the Number of Homes Sold are Going Up, Up, Up
The median prices of single family homes sold in the Coachella Valley (Palm Springs and surrounding cities) have increased for 4 months in a row signaling we are either close to the bottom of the market or bouncing along the bottom. According to the Desert Sun article of August 12, 2009 which quoted Bob Thomas of Real Data Strategies, “prices have surged 33% during the first six months of this year, with 4,615 valleywide sales-2,598 happening in the second quarter.”
My team and I have done an extensive analysis of the Desert Area Multiple Listing Service (MLS) and have extracted the median price, average price and number of homes sold for each of the major cities which we cover in the Coachella Valley (Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Indian Wells, La Quinta, Indio, Coachella, Bermuda Dunes and Desert Hot Springs). The median home price in August 2009 for these cities was $258,000. However, if you also include the desert cities of Thousand Palms, Thermal, Mecca and Salton City the median home price is more like $191,000.
The graphs below give a good pictorial view of what is happening on an aggregate level for these cities. They show a trend line from January of 2008 through July of 2009 and then compare the year over year trend to show the effect of the seasonality of home buying in the desert. We have also broken the data out separately for single family homes and condos. This has been one of the busiest Summer seasons in years. I am glad to report that I have not had time to take any vacation because there are so many buyers and also because many sellers who have been waiting for a turnaround are now putting their properties on the market.
Over the next several days I will be posting articles and graphs for each of the desert cities my team covers. There will be several surprising findings. Although the overall desert median home prices are down 38% in one year ($258,000 in July 2009 vs. $353,000 in July 2008) and the number of homes sold are up 31% (5,032 YTD July 2009 vs. 3,836 YTD July 2008), the numbers vary widely between single family homes and condos, lower end home prices and higher end home prices in each city. Even within each city, the numbers vary significantly between zip codes. Without question, the most homes have been sold in the lower priced markets which were hit hardest by plummeting median prices, foreclosures, short sales and the influx of a huge increase in the number of buyers. Many of those buyers were first time home buyers taking advantage of the government credit of $8,000 for first time home buyers. This program expires November 30, 2009. Watch for further articles outlining this program and the need to take advantage of it right away because time is quickly running out for this great incentive.
As I have mentioned in previous articles, we are in the perfect storm:
- Median home prices are at levels not seen since at least 2003, in many cases since the 1990’s
- Interest rates are still at historical lows
- Inventory is declining rapidly
- The number of foreclosures are dwindling
- The national and local news is finally reporting that the turnaround started about 3-4 months ago (a fact that my smart buyers took advantage of early)
- Government incentives for first time home buyers expire Nov. 30, 2009
- Attractive FHA programs
- Banks are getting a little better with loan approvals (I have a great mortgage source which many of you have used)
- Consumer confidence is improving dramatically
Of course some real concerns still exist:
- Unemployment is increasing (which is true even 6-9 months into an economic recovery)
- Credit is still tight
- More foreclosures will be coming, but not in a Tsunami that many people predicted or are still waiting for. The banks are slowly, VERY slowly releasing foreclosures which are being snapped up with multiple offers on the first day they are listed. The banks do not want to flood the market and suppress prices like they did earlier in the year. I also think they are aware that prices are increasing and the longer they wait, the more money they will get. Keep in mind, the banks are not emotional sellers. They are running a business and the individuals making the decisions could care less about the specific property or buyer.
With that as a brief overview, let’s take a look at the graphs and see what has been happening in the Palm Springs and the surrounding Desert cities since 2008.
Coachella Valley Median Sales Price vs. Number of Homes Sold:
Coachella Valley Median Sales Price:
Coachella Valley Number of Homes Sold:
In summary, you can see that the number of homes sold is up over 2008 by 29% for these selected cities and the median home prices are down from 2008 by 38% (even more since 2007) but the median prices are increasing.
For those people seriously considering buying properties in the desert for their primary or secondary home, now is NOT the time to procrastinate. The Summer, which is typically a slower buying time has been busy and the snowbirds will be coming back soon. Many snowbirds left last season and said they were going to wait until the new season because of the uncertainty. I am working with many of them right now who wished they had bought a few months ago.
I hope you all had a great Summer and wish you a fun and safe Labor Day weekend.
If you have any questions regarding real estate in the Coachella Valley, please contact me or connect with me on Facebook or Linkedin. I welcome the opportunity to work with buyers as well as sellers who have been waiting for the market to improve before making a move.