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!
Palm Springs Aerial Tram Road Challenge
October 27, 2018 starting at 7:00 a.m.
If you’re looking for a challenge, then this event is for you! The Palm Springs Aerial Tram Road Challenge 6K run / walk starts at 400 ft elevation and climbs to over 2,600 ft elevation. This is not your typical weekend 5k. This is the 32nd annual event with more than 1,500 participants from around the world come together each year to take the challenge.
Nestled at the base of the San Jacinto Mountains, Palm Springs is known for its crystal blue skies, year-round sunshine, palm tree lined streets and starry nights. Home to the Annual Palm Springs International Film Festival & Modernism Week, Palm Springs has fun & entertainment for all ages. Be a part of what makes Palm Springs the place to be, check out these FAB Homes for sale in Palm Springs
Halloween Chili Cook Off and Car Show at the Palm Springs Air Museum
October 27 from 11:00 – 2:00
Join the fun at the Palm Springs Air Museum’s 11th Annual Chili Cook-Off and Car Show. Volunteers from the Museum cook up their favorite recipes and you decide who’s is the best. It’s a goolish feast for the eyes and the tummy.
Palm Springs is known for its crystal blue skies, year-round sunshine, palm tree lined streets and starry nights. Home to the Annual Palm Springs International Film Festival & Modernism Week, Shopping, Fun and Entertainment for all ages. Be a part of the Palm Springs Lifestyle, check out these FAB homes in Palm Springs
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.
Palm Springs Modernism Week 2018 – It’s cool, iconic and modern. The February festival is an exciting 11-day celebration of midcentury modern design, architecture, art, fashion, and culture. Events include the Modernism Show & Sale, tours of iconic homes, architectural walking and double-decker bus tours, a world-class lecture & film series, tours of the historic Annenberg Estate at Sunnylands, a Palm Springs Walk of Stars dedication, classic cars, garden tours, a vintage travel trailer exhibition, and much more.
The mission of the Palm Springs Modernism Week 2018 is to celebrate and foster appreciation of midcentury architecture and design, as well as contemporary thinking in these fields, by encouraging education, preservation and sustainable modern living as represented in the greater Palm Springs area
Located in North Palm Springs is one of the city’s best-kept secrets in Little Tuscany set on .57 acre with Stunning Mountain Views. Built in 1939 and remodeled in 2017.
Check out some of the Palm Springs Modernism Week 2018 upcoming events!
Rat Pack Playground – Modernist Homes in Vista Las Palmas
February 15, 2018 | 9:30 am – 11:30 am
Stars and Star-chitects in Deepwell
February 15, 2018 | 9:30 am – 12:00 pm
Preview Party at the 18th Annual Modernism Show & Sale
February 16, 2018 | 6:00 pm – 9:00 pm
The Big Reveal Party at the West Elm House 2018: The Pool House
February 16, 2018 | 8:00 pm – 10:00 pm
Modernism Week Showcase Home – Moroccan Modern
February 17, 2018 | 9:00 am – 1:00 pm
Sagewood: A Donald Wexler tour
February 17, 2018 | 10:00 am – 3:00 pm
Alan Hess Presentation on Frank Lloyd Wright
February 18, 2018 | 9:00 am – 10:00 am
Ask an Interior Designer
February 18, 2018 | 10:00 am – 4:00 pm
Thunderbird North Home Tour – Architects William Cody and Donald Wexler
February 19, 2018 | 9:00 am – 4:00 pm
Wexler Residence – Palm Springs Modern Committee Iconic Home Tour
February 19, 2018 | 10:00 am – 2:00 pm
Boom Town: The Story of Uptown Palm Springs
February 23, 2018 | 9:30 am – 11:30 am
Steel & Glass 2018 Home Tour
February 24, 2018 | 10:00 am – 3:00 pm
Premier Double Decker Architectural Bus Tour
February 25, 2018 | 9:00 am – 3:30 pm
The Palm Springs Modernism Week 2018 is staged and set to amaze, don’t miss this popular event!
The Palm Springs International Film Festival is one of the largest film festivals in North America, welcoming over 135,000 attendees each year for its lineup of new and celebrated international features and documentaries. The Festival is also known for its annual Film Awards Gala, honoring the best achievements of the year in film by a celebrated list of talents. Produced by the Palm Springs International Film Society, the Festival offers 14 days of events and film screenings featuring over 180 films. Venues include Palm Springs and Cathedral City.
PARTIAL LIST OF EVENTS
January 2, The Palm Springs International Film Festival rolls out the Red Carpet to welcome Hollywood’s hottest industry players and A-list celebrities for the Awards Gala at the Palm Springs Convention Center. The Awards Gala is the Film Festivals showpiece event that kicks off the Festival each year with a dazzling celebration of old-school Hollywood star power, glamour, and talent. Grab a ticket for the event, or star gaze as top celebrities walk the red carpet.
January 4, The Post at Palm Springs High School. Steven Spielberg’s rousing, knuckle-biting account of the publication of the Pentagon Papers, Meryl Streep stars as Washington Post publisher Katherine Graham and Tom Hanks as editor Ben Bradlee, as they take on the might of Nixon’s White House.
DINNER AND A MOVIE
January 8, catch Constructing Albert, a behind-the-scenes glimpse of the life and ambition of a restaurateur, following Chef Albert Adrià as he puts his past with famed restaurant elBulli behind him and embarks on a new culinary adventure. Then join us at Bontá in Cathedral City, where Chef Hector Salvatierra of Bonta’ serves up an eclectic mix of Mediterranean, European and Argentinian dishes.
Film Screening begins at 4:00 pm at the Mary Pickford Theater followed by dinner.
Bontá is located in the same complex as theater
January 10, The Cakemaker, a story of a gifted pastry chef and the aftermath of his passionate, closeted affair with a married man. The chic and swanky Eight4Nine Restaurant and Lounge, the Uptown Design District’s Hot Spot is the featured Dinner and a Movie restaurant. This year they matchup with
Wednesday’s screening will be followed by dinner at Palm Springs’ chic and swanky Eight4Nine Restaurant and Lounge, the Uptown Design District’s hot spot. Eight4Nine’s very own pastry chef Albert Gonzalez has created an eclectic and colorful menu
Film Screening begins at 4:30 pm @ Camelot followed by dinner.
Eight4Nine is a short drive from the theater
January 14, The Last Movie Star at Palm Springs High School.
An invitation from a film festival affords an elderly movie star a trip down memory lane that stirs his long-dormant heart. An octogenarian Burt Reynolds shares scenes with his ’70s-era self and delivers a resonant performance in this poignant, often funny drama.
After attending the Palm Springs International Film Festival, check out this Little Tuscany Hacienda located in the heart of the Action in Palm Springs. Enter the gates into your own PRIVATE COMPOUND set on over 1/2 acre with Dramatic MOUNTAIN VIEWS that you can almost reach out and touch.
This exceptional property features over 2,200 SF, 4 bedrooms, 3 baths & has recently had an EXTENSIVE RENOVATION including all new Kitchen and Baths. Enjoy the Old World Charm of Palm Springs with state of the art conveniences including new ENERGY EFFICIENT windows & doors, CHEF’S KITCHEN with a full suite of VIKING stainless appliances, QUARTZ counters & Custom Cabinets with lighting. Each bath has been remodeled with stone showers, frame-less glass, QUARTZ, Custom Cabinets.
You’ve got lots of flexibility here; the property is zoned multi-family & can be used as one LARGE HOME with GUEST HOUSE, or locked off as TWO SEPARATE UNITS so you can live in 1 and rent the 2nd out for extra income. You can also build an additional home for more income potential. What a GREAT LOCATION, minutes from the Village in Palm Springs.