Palm Springs real estate market trends September 2013 showed that we are beginning to see our seasonal population increase toward a probable peak in January/February. It’s been fairly quiet through September/October with a few early arrivals and our usual tourists. Now in November we will see a much larger influx of snow birds coming to Palm Springs to enjoy our warm weather, as their pleasant fall weather at home turns to cold winter conditions. As inhabitants increase in number, so does our inventory of properties for sale. Our inventory of unsold properties bottomed in July at 404 and has risen to close out September at 495. Palm Springs “average prices” that peaked in June at $218/sq.ft. have trended down about 6% from $218/sq.ft. in September to $198 now. However, year over year prices are still up over 15% from September last year. Here is what happened in September for each price category:
- Low End – Below $200K Fewer small investors were active in September as increased prices presented less ROI value, compared to last year. Prices in September were up 11% compared to the same period last year. With less investors buying due to higher prices, unsold inventories increased over 13% to 86 units, and the number of sold properties dropped 17% to 39 units in one month. With higher prices and fewer foreclosures, this market should return to a more normal market place, less investor driven, with a modest increase in inventories and slower price increases.
- Upper Low End – $200K to $500K Inventory in this category continued an upward trend increasing about 9% to 215 units. Prices dropped slightly by about 3% to an average of $182/sq. The number of sold properties also dropped by about 7% to 58 units, compared to 62 last month.
- Moderately Priced Properties – $500K to $1M Inventories continued to increase in September, up over 10% to 131 units. Conversely sales have dropped 18% to 23 units. Prices have remained essentially flat – down 3%.
- High End Properties – $1M and over What a difference a month makes! Perhaps anticipation of an increase in potential buyers spurred the number of active listings in this category to explode in September to 63 units, up 34% from August, and up a whopping 75% from September last year. The number of units actually sold though was flat at a paltry 4 units. As I suspected, the summer lull for properties in this category is over. Prices on active listings are up about 9% and sold prices are down, but the number of sold units was so low that it wasn’t really statistically relevant.
In summary, the real estate market here is pretty much behaving normally. Inventory is increasing as snow birds return and should continue rising to a peak in January. With inventories now building, we should start seeing the market shift a bit from a Seller’s market toward a Buyer’s market, particularly where we see the greatest increases in unsold inventory. Prices that have been somewhat flat should start experiencing some downward pressure. Stay tuned for the next report.