A recent article in our local Desert Sun newspaper entitled Fewer Coachella Valley Homes for Sale reported that Palm Springs home prices may rise in the not too distant future. To support this, the article stated that the Palm Springs area inventory went down by more than a 1000 homes in the last four months. Further, our desert area MLS has reported that the unsold active inventory is down about 22% from 5681 properties for sale in September a year ago, to 4418 properties this September.
The reduction in our valley inventory is probably due to a combination of factors – lots of cash investors attracted by low prices, those sellers unwilling to sell at current prices and thus not listing, and sellers pulling their properties off the market. Also, there’s a general suspicion that banks are slowing the introduction of newly foreclosed homes into the inventory. In fact, the article went on to state that the number of bank owned properties for sale today has dropped 39% since one year ago.
Home Prices in Palm Springs May Rise
Where inventories are low, I think it possible that, in selected areas, our home prices in Palm Springs may rise with these shifting conditions. There are two things that drive this – low inventory and desirable location. Thus, the more desirable the location, the more likely this will happen. It’s striking that what’s happening in Palm Springs mirrors what is happening throughout “California and throughout the nation.” Although I am not a fan of gross national averages, the article did state that nationally, the number of listings is presently down to the lowest point since 2007. So we can see that statistics do indicate that something new is going on throughout the nation’s real estate market. It usually follows that inventory drives prices, that is to say:
The more scarce the inventory, the higher the prices.
Knowing that all these factors create a situation in which home prices in Palm Springs may rise, it’s going to be very interesting to track our market conditions in the next few months, as our busy selling season is just beginning. I’ve been saying the same thing for many months, and the Desert Sun article just adds emphasis to my position that, while mortgage loans are at historically low interest rates, and prices are still way down, this remains a great time to be buying a home in Palm Springs! For the entire article, read Fewer Valley Homes for Sale.
Dick Sakowicz is a REALTOR with ReMax Real Estate Consultants who lives in Palm Springs and serves the greater Palm Springs area.