“Is it a buyer’s market yet?” – “No, not really.”
It must be a buyer’s market, right? Many sellers and few buyers, huge amounts of unsold houses and condos — we read about it here almost every day. In a recent article in The Desert Sun on 10-31-06, the author stated that the inventory of “existing homes in the valley is now 8,358” up from “about 4700 last year”. (See full article below.)
“Must be a buyer’s market, right?” — “No, not really.”
There is still a big disconnect between many current sellers and buyers, both in expectations and in perceptions of value. Many sellers just don’t get it…..yet!
Current trends do favor the buyer. Inventories are high, listing prices are coming down, interest rates are still historically low, and there aren’t a lot of buyers; a simple supply and demand scenario, right? No again, at least not yet.
According to another recent article in The Desert Sun on 10-25-06, (See article below), there is little doubt that a market correction is in process, but a sizable gap in perceptions still exists between sellers and prospective buyers. Many buyers are delaying their home purchase, fearing they are buying at a peak in the market, or else waiting for “a bubble to burst”. Many sellers on the other hand are only now reluctantly reducing their listing prices and lowering their expectations. Quite a few are just allowing their listings to expire, taking their homes off the market, in hopes that later on they will be able to sell at their desired higher price. This is really a false hope, essentially trying to turn back the clock, and it just isn’t going to happen.
It’s tough for sellers to reduce their price when just last year they saw a neighbor sell a house like theirs for a higher price than their own current listing price. But this is the new reality to which sellers must adjust today, and until they do accept the fact that this is a different market, we will continue to have the present imbalance in seller and buyer expectations. It will continue until equilibrium is restored, and a consensus between buyers and sellers is reached as to what constitutes good value.
So no, it’s not yet a buyer’s market, at least as it relates to significantly lower selling prices, and it may never become one, at least not here in Palm Springs. The explosion of baby boomer retirees looking for a place to retire, the growing affluence of Generation X’ers seeking a second home, the snowbirds flocking here to enjoy our warm winter climate, and the influx of all the other folks that are considering moving here will, in concert, most likely keep local selling prices edging higher. It’s unlikely that any price bubble will burst, maybe leak a little, but not burst.
But, take heart, the situation is not hopeless for the would-be buyer. With so much unsold inventory out there, now is the time to find a good real estate agent. Working together, you will be able to sort through all of the available options and find just the right property in your price range.
There are a lot of reasonably priced properties out there, and you and your Realtor can find them. Interestingly, even in this uncertain market, properties that represent good value do not stay on the market very long. So don’t hesitate to act once you find your dream home. Whatever you do, don’t wait for some Palm Springs housing bubble to burst. There isn’t a bubble, and nothing is going to burst.