A new update on the state of the real estate market in
The trend averages on sales volume and prices are down or, at best, flat. But if you look behind the averages you will find a very mixed picture from community to community. In reading these statistics, as always, be careful with averages and gross generalities; it’s more meaningful for your understanding to seek out statistics relative to your specific communities of interest.
According to DataQuick, the number of homes sold in the valley fell 25% in August 2007, compared to sales in August a year ago. The median price of those homes rose slightly by 1%, in that same time period. The article confirmed the pervasive theme of reports we hear and read all the time — that home sales volume is down considerably, and prices, if not down, are under a lot of downward pressure. The California Association of Realtors (C.A.R.) reported slightly different numbers for the same period – valley wide sales volume down about 17% with the median price up 6.4%.
In looking at each community within the valley, one notices a big variation, both in number of sales and in the median sales price, from community to community. For instance, the Palms Springs sales for the month of August 2007 decreased about 40% from last year’s sales volume, whereas in Indian Wells there was an increase of 70% in comparing the same time periods. Comparing price changes from a year ago in the same two communities, we see that Palm Springs experienced an increase in pricing of about 2% while Indian Wells saw a drop in prices of about 20% for the same period.
Averages just don’t tell the real story. As usual, the “devil is in the details”. Some noteworthy points excerpted from the article include:
– “Buyers (continue to) have mounting expectations of lower prices.”
– “The ‘…credit or liquidity crunch that began in July’ has only helped accelerate the sales decline.”
– “It looks like we’re pretty close to a ‘floor’ level of purchase activity right now across the state,” according to DataQuick
President Marshall Prentice.
– “Market uncertainty has squeezed out most discretionary buying”, he continued.“Prices appear to be holding steady in
– The greatest price declines are seen in the more affordable areas and in new developments.
– “Median prices per square foot declined across the Coachella Valley in August compared to August 2006.”
– “With 8417 homes on the market valleywide (sic) in mid-August …buyers had plenty of options and considerably more
bargaining power than in years past”.
As I See It
The article confirms that the market correction which started some months ago continues and is characterized by a significant shortfall in sales, along with strong downward pressure in prices.
All of this data generally supports and confirms our assertion that we are now in a strong Buyers market. In most parts of the valley, inventory is at a record high, or close to it, and selling prices are down. One thing is pretty clear. Asking prices, and therefore Seller expectations of their final selling price are both very much reduced from last year. The primary attribute that characterizes today’s real estate market is the eagerness of most Sellers to deal. With their homes sitting on the market for months and Buyers generally absent, many Sellers are desperate for an offer.
So if you are a ready to buy a vacation getaway, retirement home or weekend retreat but are still watching the market cautiously, we would highly recommend that you start your search today. If you look for individual opportunities, they are out there now, and we will help you find them.