Real Estate - Power to the People

Homeowners gain influence in the desert real estate market



ThinkStockPhotos.com

As the Coachella Valley housing recovery continues to evolve, the area’s median price per square foot declined slightly in February. Of the nine desert cities, six grew and three declined.

Price changes in Palm Springs and Palm Desert are of particular interest. Until last summer, Palm Springs led all the desert cities, including Palm Desert, in the recovery. Between January 2010 and August 2012, the median price per square foot rose 17 percent in Palm Springs, while it declined 3 percent in Palm Desert. However, the latest numbers show this pattern changing. If we measure only since August (six months), the median price in Palm Springs is up 1 percent, and in Palm Desert, it’s up 11 percent.

We see a similar change in home sales. While Palm Springs has generally led Palm Desert in total sales for three years, numbers over the last six months show Palm Desert leading all the cities. This change is primarily the result of “normalization” — the changes in supply and demand that narrows price differences in two similar nearby cities or regions. We think this will continue for a while.

The valley’s 12-month average in home sales in February was 793 units (see graph). This is slightly less than the average last February (812). However, a deeper look into the numbers shows an important change. While total sales were slightly less, the number of normal (non-distressed) sales rose 20 percent year over year. However, the increase didn’t offset the decline in distressed sales, which is why the total slightly declined.

In just over a year, distressed sales have fallen from 50 percent of total sales to only 25 percent. We expect the decline to continue for the whole year. Investors looking for bargains have heavily dominated distressed sales. This change reflects a slow transition of the desert housing market from one heavily influenced by investors to one driven more by individual homeowners.

Coachella Valley Real Estate

Housing Inventory

Housing inventory for the Coachella Valley remains fairly low at 3,685 units. It is important that it doesn’t increase much as we move into and through the highest part of the sales year. This will help keep supply in check as demand increases this spring, hopefully fueling price increases.

When we measure months of supply by city (inventory divided by the sales rate), except for high-priced areas like Indian Wells and Rancho Mirage, we like supplies close to four months. As shown in the chart, eight cities are currently under six months. The most noticeable change in months of supply is in Palm Desert. A year ago, months of supply in Palm Desert was 8.7. Now, it’s 5.7. We think this is one important reason why prices in that city have started to increase at a faster rate.

Vic Cooper and Mike McDonald are partners in Market Watch LLC, a nationally recognized real estate advisory company that produces The Desert Housing Report. Visit www.marketwatchllc.com

Sponsored By Toscana Country Club logoandFranklin Loan Center logo

Comments to this website are moderated by staff. While all comments are welcome, we encourage all to be polite and please do use this system for advertising or business promotions. Any complaint towards a business or service should be directed directly to that business and not posted here. If anyone has a complaint that a comment is defamatory, please contact me at tmay@palmspringslife.com and I will take appropriate action promptly. Thank You

Add your comment:
Palm Springs Life

Related Articles

Escena Golf Club Offers Room With a View, Combined Living Space

The Panorama Room at Escena Golf Club in Palm Springs combines the living, dining, and kitchen space with breath-taking views of the San Jacinto Mountains.

Coachella Valley Real Estate Market is a Demographic 'Super Mix'

The Coachella Valley is an eclectic mix of peoples, lifestyles, backgrounds, ages, incomes and wealth – a demographic super mix from all over the country and even the world.

H3K Design Restores Midcentury Splendor to Palm Springs Home

Howard Hawkes and Kevin Kemper of H3K Design have restored a Palm Springs home in the Twin Palms neighborhood back to its original midcentury splendor, but in a very 21st-century fashion.

Kyle Richards of 'Real Housewives of Beverly Hills' Buys La Quinta House

Kyle Richards of 'Real Housewives of Beverly Hills' and her husband Mauricio Umansky have bought a house in La Quinta.

Toscana Country Club Creates Friendships with No Borders

Toscana Country Club is on a roll with 40 home sales so far this year and a total sales volume of more than $74 million.

Promotions + Contests

90 Days of Summer Romantic Palm Springs Getaway 2014

90 Days of Summer Romantic Palm Springs Getaway 2014

Experience the beauty, romance and excitement of the Palm Springs area when you enter to be the lucky winner of this romantic couple’s getaway
90 DAYS OF SUMMER Instagram Contest 2014

90 DAYS OF SUMMER Instagram Contest 2014

Win a fabulous Palm Springs weekend!

Win a fabulous Palm Springs weekend!

Each month, a first place winner will be selected to win a fabulous Palm Springs weekend!And, each month, three additional runners up will be selected to win a wonderful Palm Springs area Dining certificate!
2013/14 Best of the Best

2013/14 Best of the Best

Palm Springs Life’s annual Best of the Best. Readers tell us who their choice is for the “Best of the Best” of the Coachella Valley in over 40 categories.
Cartoon Caption Contest

Cartoon Caption Contest

Each month, we provide a vintage 1950’s cartoon illustrated by Alice Rovinsky. You are invited to submit a caption or vote for your favorite caption.
Pets on Parade 2014 Photo Contest

Pets on Parade 2014 Photo Contest

Enter your “Cutest Pet” photo in the Pets on Parade 2014 Photo Contest. Online users will be able to like the Cutest Pet photos from six (6) categories.