DESERT REAL ESTATE MARKET REPORT
2018 Year in Review
As we start 2019, it’s time to take look back at how the Desert Real Estate Market performed last year and look for developing trends.
In 2018, there were 5,836 single family home sales throughout the Coachella Valley. Those homes sold at an average of $610,300 and an average of $260. / Sq Ft. Homes that were priced correctly for the market, sold on average in 89 days. The highest sale price in 2018 was $12,000,000 for a home located in The Madison in La Quinta.
With those statistics, we compared 2018 sales to the previous year and found that while the number of sales were down slightly overall, (2%), Selling Prices were up 10% and the price / sq ft was up 8%. The time it took to sell was down 10% from the year prior. The highest priced home sale in 2017 was $8,700,000. for a home located in The Vintage Country Club in Indian Wells.
While prices are up, inventories remain low as compared to this time of season in years past. Historically when the inventory of homes for sale is low, prices tend to rise due to the pressures of supply and demand.
Interest rates also play an important role in how markets perform; rates are still low despite the fact that the Fed gave us 4 rate increases in 2018. As rates increase, buyers can afford less house for the same mortgage payment, which ultimately puts downward pressure on home prices.
But good news, rates pulled back a bit this week. Conforming loans, (up to $484,350) for a 30 year fixed rate is still just 4.47%.
The Coachella Valley has long been viewed as a destination for the soon to retire and already retired home buyers looking for an active lifestyle, but with the increase in mobile commuting, people can work from anywhere. We’re also seeing more young home buyers who are looking for a quality lifestyle, moving to the Desert full time. Easy Freeway and International Airport access makes that possible.
Combine the Lifestyle that only the Coachella Valley offers along with affordable home prices – the Valley is and will continue to be a destination for both full time residents, second home buyers and
We have a strong and steady real estate market here in the Coachella Valley.
If you would like more detailed information about your neighborhood specifically, drop me a line – we just finished our 2018 “Year in Review” Market Report, I’m happy to send you a copy.
Broker Associate with Bennion Deville Homes
The Real Estate Corner Desert Market Update
NUMBER OF SALES
Home sales are up Valley-wide. The total three-month sales are up 2.9%. On a city by city basis, six cities show higher sales, with three; Palm Desert, Desert Hot Springs and Palm Springs showing the largest increase in sales.
The three cities with the largest sales declines are Indio, Indian Wells and Cathedral City.
INVENTORY OF HOMES FOR SALE
While home sales are up, inventories are down. Typically our inventories dip to to their lowest point every year toward the end of September, but this year inventories are even lower.
Low inventory acts as both a positive and negative; it’s positive for sellers and future home sellers as it tends to move home prices higher. But, it’s also a negative in that low inventory puts the brakes on the number of sales. If interest rates continue to increase, that can put a damper on sales as the cost of borrowing money for a mortgage becomes more expensive.
MONTHS SUPPLY OF HOMES FOR SALE BY CITY
The month’s of supply ratio is down valley-wide compared to one year ago in every city. Most have less than 4 month supply except two; La Quinta which currently has a 4.5 month supply and Indian Wells with a 6 month supply of homes to sell.
MONTHS SUPPLY OF HOMES FOR SALE BY PRICE BRACKETS
When we look at the supply of homes by price category, we see the supply is lower across all price brackets compared to one year ago. The biggest change is homes priced above $800,000. Last year the higher price points were taking 7.5 months – 1 year to sell. Now, it’s taking on average 5.3 – 8 months
The tipping point when using this metric is 6 month’s. 6 months is considered a “Balanced Market”, not particularly favoring either Home Buyers or Home Sellers. Less than 6 months, the market is tipped in the Sellers favor, otherwise known as a “Sellers Market”. More than 6 month supply is viewed as a “Buyers Market”.
As home prices or the cost of buying a home, (rising interest rates), increase – sales will start to slow putting downward pressure on pricing. Markets are always in a state of flux, moving from one market to another and rarely stopping at “balanced” for long.
While there is typically a lag period between market shifts, the lag time is shorter as the number of sales are increasing. Home sellers quickly see an improving market and strive to maximize the price they can ask. When prices increase too fast or too far ahead of sales, potential home buyer’s become reluctant to make offers, fearing they could be buying at the peak.
DISCOUNT FROM ASKING PRICE
In 2018, when negotiating a sale price with buyers; home sellers are discounting their listed price an average of 2%. One year ago, sellers needed to discount an average 2.4% off their asking price to close a sale.
For example, this ratio means if a home is listed at $400,000 it’s selling at an average of 98% of their asking price, or $392,000. a discount of $8,000. This metric also shows a strong and improving real estate market here in the Desert.
When we look at the story each of these metrics are showing for the Desert Real Estate Market, we can see an improving but pretty balanced market. In addition, we can see that the market has had and continues to show sustained growth. Making now the right time to be a participant in the market.
The Desert Lifestyle is unlike any other, as we head into our season now is a great time see what the Desert has to offer. Check out these FAB Desert Homes!
SUMMER STAGING TIPS
Did you know that more than 50% of the desert home sales happen during the summer months? The desert summer real estate market is as hot as it is outside; knowing how to present your home for sale will be an important factor for you to ask and receive top dollar.
Top 6 Summer Staging Tips
Keep it cool as a cucumber. no one wants to walk into a hot house. All of a sudden, they’re thinking how do I get out of here instead of looking at your home. Now is not the time to skimp on energy bills.
Show that the grass is greener. High water costs and water conservation are hard on our summer desert landscape. However, keeping at least the front landscape looking fresh and lush will make your home stand out as the gem. The curb appeal will lure them in.
Set the Mood. set up a refreshing beverage station for your hot and tired home buyer’s and their agents. Place a vase with fresh flowers. Have a pitcher of Ice Tea or Lemonade with lots of ice and pretty glasses set out just before your showing.
Visual Power. Use fresh flowers in as many places througout your house as you can. Make sure your home looks fresh, cheery and refreshing as possible.
Making Scents. Aromatherapy can help make your home more alluring. Scents like Citrus, Eucalyptus or Rosemary say summer. They add a clean refreshing scent to your home.
In the Swing. There is an intimate relationship between music and marketing. Music can evoke an emotional response. The awkward sound of heels on a hard floor is hardly inspiring. Heighten the senses of your buyer with background music, it changes the ambiance and heightens the senses and mood of buyers touring a home. Music has a persuasive impact and can create an illusion of life inside your home for buyers increasing their emotional attachment. The music you play is important, pair the music style to the style of your home and the buyer’s you’re targeting.
Summer Desert Market Report – Median home prices rose for the 8th straight month. Up 9.6% from last year. The hottest cities for sales by volume were Palm Desert (233), Palm Springs (213), La Quinta (156), Indio (131), Rancho Mirage (97). Each city and each community has its own story some communities have seen huge growth, while others are relatively flat. The cities that had the largest price increases, have seen the number of sales flatten, which tells us that prices were getting ahead of the market.
Inventories are down again putting upward pressure on pricing. Overall the desert has seen a decline in the time it’s taking to sell, nicely presented homes in a good location and priced well are selling quickly. Currently there is a 3 month supply of homes for sale in the desert, which puts us in a “Sellers Market” as we head into season.
The Fed has indicated there will likely be two more interest rate increases before the end of the year, which could start to weigh on the market and slow sales until the shock is absorbed.
Southern California and specifically, the Coachella Valley continues to be a sought after destination for a second home get a way.
As we head into our “Season”, we expect to see continued strong home sales and price appreciation valley-wide.
How’s your neighborhood doing? Send me an email, I’ve got the details!
Ever wonder how much income you need to buy an average home in other areas of the country?
@HowMuch.net just published a map showing How much income you need to buy the average home in each state in the U.S.
They collected average home prices for every state from Zillow and then plugged that information into a mortgage calculator to figure out monthly payments. The interest rates used varied from 4 to 5% depending on the market, a 10% down payment, and total cost of housing not exceeding more than 30% of gross income. Using this rule as the benchmark, they calculated the minimum salary required to afford the average home in each state.
The Top Three Places Where You Need the Highest Salaries to Afford the Average Home 1. Hawaii: $153,520 for a house worth $610,000 2. Washington, DC: $138,440 for a house worth $549,000 3. California: $120,120 for a house worth $499,900 Here’s a quick snapshot of housing affordability across the United States.
Home much income do you need to buy the average home in each state; Check it out!
What the Dodd-Frank Rollback Means for Real Estate
On May 22nd, Congress passed reforms to the Dodd-Frank Act, the massive financial reform bill enacted in July of 2010 in the wake of the 2008 US financial crisis.
The current bill could have a big impact on the real estate and mortgage lending. Economists believe the rollback of the Dodd-Frank regulations could lend a hand toward partially solving the industry’s inventory crisis.
“This is a win for the financial industry,” said Chief Economist Nela Richardson, who worked on the bill as an economist for the Commodity Futures Trading Commission. “These are community banks, credit unions, a lot of them are in rural areas. They do a lot of mortgage lending. This will help consumers in that the banks will be able to free up some credit.”
National Association of Realtors Chief Economist Lawrence Yun echoed Richardson, adding that a loosening of Dodd-Frank rules may lead to a rise in regional construction.
“The regulations placed on small-size community banks were terrible because it hindered small-sized homebuilders from obtaining construction loans,” he said. “As the homebuilding industry has become more dominated by large corporations, now we have this relief, which means that, small-time homebuilders will have better access to capital to build homes.”
Economists seem to agree, that the economy is not on track to repeat the financial crisis of 2008, since big banks were at the center of the collapse a decade ago. Richardson explained that the only way to eliminate all risk is to make everything as onerous as possible.
The legislation will also require Fannie Mae and Freddie Mac to consider the use of alternative credit scoring models, which could help borrowers with thin credit files receive a mortgage. But Gardner said he’s concerned, ultimately, we need to remain aware of looser credit restrictions so the country does not repeat the acts of the last financial crisis, where homeowners were given loans they could not pay back.
February 16 – 25, 2018 The 72nd annual Riverside County and National Date Festival 2018 opens for 10 amazing days of fun for all at the Riverside County Fair Grounds in Indio.
The 72nd annual Fair and Date Festival is about to light up the Desert and packed with fun for everyone including Camel and Ostrich Races, Carnival Rides, Arabian Nights Music Festival, Parade, Pageant and live concerts with star-studded headliners
Friday, February 16th at 7:30 p.m.
Saturday, February 17 at 7:30 p.m.
Los Rieleros del Norte
Sunday, February 18th at 7:30 p.m.
Lou Gramm, founding member of Foreigner, with Foghat
Saturday, February 24th at 7:00 p.m.
Super Fiesta Sunday featuring
Los Tequileros de Ramon Jimenez, Banda Pachuco, and Carmen Jara
Sunday, February 25th at 3:00 p.m.
After the Fair, stop by to see these exceptional homes
Want more information about one of these exceptional homes?
Give us a ring, (760) 218 – 5752
4 Days of Nothing but Dogs! The Indio Dog Show is headed to town. This prestigious show is considered the opening event of the dog show year on the West Coast and is tons of fun for the entire family.
The Kennel Club of Palm Springs annual Dog Show includes more than 3,000 dogs around from the world competing for coveted title of “Best in Show” Events include Obedience and Rally Trials and Specialty Shows.
The Show is among the five largest in the country according to the AKC and includes several group shows, plus sixteen or more breed specialties during the two days preceding the all-breed shows, resulting in majors galore. KCPS also offers Obedience and Rally trials. Separate Obedience training classes are held during the fall, winter and early spring, at the Palm Springs Police Department.
Coming Soon! After the Dog Show, stop by to check out this great fairway home in Indian Palms Country Club Remodeled with Quartz Counters and Bamboo flooring throughout. 3 Bed, 2 Bath with Panoramic Mountain and Fairway Views. Priced under $400,000 and furnished. Call for availability and details on this steal of a deal!
(760) 218 – 5752 or email us at
Don’t miss the 32nd annual Southwest Arts Festival in Indio, hosted at the Empire Polo Grounds. This year’s festival will feature interactive art displays and live music, with pottery, glass and fine art painting. Enjoy the art surrounded by the natural beauty of the Santa Rosa Mountains with a variety of food and beverage options as you casually stroll the grounds. This is an internationally recognized cultural event featuring traditional, contemporary and abstract fine works of art by nearly 250 acclaimed artists from around the world.
After enjoying the Southwest Arts Festival, stop by to see this great home in Estacio!
You just found the Luxury Lifestyle you’ve been looking for in the sought after Gated Community of Estacio with low HOA’s. Welcome to Via Carisma! This exceptional home features over 2,300 Sq Ft with 4 Bedrooms including separate Guest House. Invite your Friends & Family, this home is designed for Entertaining with a free flow from inside to outdoor living with Lush Landscape & Spool with jets & Baja Tanning Shelf. This is a Great Room Floor-plan with Volume Ceilings, Architectural Detail, Fireplace & Chef’s Kitchen with Gas Cook-top, Dual Ovens, Breakfast Nook & Opens to Living & Dining. There are 3 bedrooms in the main house including a Luxury Master Suite that opens to the Backyard with Spool for an Evening Dip, plus large Guest House. Unique to this home is a new 5 Ton Lennox Signature AC system with computer controlled Variable speed. Enjoy an easy Lifestyle here, close to World Class Golf & Tennis, Hiking, Old Town La Quinta and El Paseo for Shopping, Dining, and Entertainment.
For Open House Dates and Times call us directly at (760) 218 – 5752 or email Cathi@DesertAreaHomeFinder.com
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.