We are exposed to a lot of general information on real estate market trends – on a macro scale nationally, state by state, and even regionally. For these reports and today I focus specifically on Palm Springs real estate market trends March 2013. If you are interested in another valley city, I would be happy to expand the report.
Inventory trends have been very consistent over the last ten years. As expected, the available inventory of residential properties in all price ranges this past winter did increase substantially. Inventory grew from a low of 387 in August 2012 to a high of 584 in January 2013. This is a rather significant 50+ % increase from August 2012 and includes a healthy increase of 12.5% for one month alone – from December to January, when we peaked. In March, the numbers decreased 6% from 584 to 529. We’d have to go back to March 2004 to see similar low levels of available inventory. Low inventories usually mean higher prices. We will see.
As far as real estate market trends in Palm Springs for all properties and all prices go, with inventories coming down over 45% in six months, you would expect to see prices up, and that is what happened. Average prices have increased about 14% across all price ranges but differ somewhat within each category:
- Low End Properties – Below $200K
Where many investors are active, inventory growth has slowed to 4%, about the same level as six months ago. Prices are up only slightly at 5.7%.
- Upper Low End Properties – $200K to $500K
Property inventory numbers are up about 47% in the last six months. Prices have risen steadily since August at a healthy 10%, in spite of the substantial inventory increase.
- Moderately Priced Properties – $500K to $1M
Inventory increase has slowed but is still up 14% over the last six month period. Prices are up about 8%, compared to six months ago.
- High End Properties – Over $1M
Inventory numbers continued to increase at over 20% – from 63 in January to 75 units in March. Prices are up over 28% in the last six months.
In summary, we entered our peak snowbird season with historically low inventory, and during the season we experienced the predictable inventory increase, peaking in January/February. Now we can expect to see the customary drop in inventory that usually follows the snowbirds’ departure.
The question is – will prices continue to trend up as inventory falls? My guess is that prices will be under increasing upward pressure and the average price will rise substantially. The exception might be at the very low end where many buy-and-hold investors (excluding flippers) will be priced out of the market. One thing is clear, it is now definitely a sellers’ market!