Real estate market trends May 2013 in Palm Springs properties for sale continued to follow summer seasonal trends, with inventories dropping from a high of 584 units in January to 465 at the end of May. The total month to month drop was about 6% and is expected to continue. If this trend follows those in prior years, I would expect active listings to bottom out in July or August at about 365 to 375 units. As inventories drop, prices (as measured by $/sq. ft.) are predictably trending up. Average prices, if you include all types of residential properties, have increased about 16% from a year ago and about 22% in the last 15 months. This average increase is seen across all price ranges but differs somewhat within each category. Here is what has happened over the last month or so:
- Low End Properties – Below $200K
Investors have been really active in this price range. Inventory has dropped significantly to only 90 units, down about 20% from last month! This is almost a 50% drop in available units from a year ago. Asking prices have risen steadily over the last year and have continued that trend through May. However, “Sold” prices have started to flatten; they’ve remained steady in the last few months.
- Upper-Low-End Properties – $200K to $500K
Inventory is down slightly at 187 units, about 4% from last month. Prices have steadied some but are down slightly at 3% from last month. Year over year prices are still up over 14%.
- Moderately Priced Properties – $500K to $1M
Inventories continued a slow increase up, at about 5% month to month. Active listings at month’s end were 117 units, a substantial increase of 23% from the same time last year, when there were 95 units for sale. With inventories up, you would expect prices to drop, but that is not the case, as prices are increasing over 10% month to month.
- High End Properties – Over $1M
Inventory numbers slightly reversed from last month’s increases. Inventory stands at 71 units, a small drop month to month but still 20% higher than a year ago. Prices have held steady over the past several months but are also still 20% higher than a year ago.
In summary, real estate market trends in Palm Springs over the last six months show that monthly changes have settled somewhat, both in average number of properties for sale and in selling prices for those properties. And normal seasonal trends are holding. But there are a few surprises this time, at least with now-rising prices of homes in two categories – homes priced at $500,000 or higher, and in luxury homes priced at over $1M, especially. The question is – will prices continue to trend up as inventory increases, particularly in these moderate and high end properties? Today with increasing mortgage interest rates, that’s anybody’s guess.
Note: This report focuses on real estate market trends specifically in Palm Springs. If you are interested in another valley city, I would be happy to expand the report for you.