Nov. 15, 2019
For a couple of months, it seemed as though our inventory levels were returning towards normal and it looked like we might be returning to our typical market for the season. But we now see another month with inventory levels below the same time last year, with fewer home sales as a result.
With tightening inventory, if a home is in good condition, in a desirable area, and priced right, it will sell quickly and for close to asking. We are experiencing some multiple-offer situations on highly desirable properties, and our recent experience with several buyers has shown that buyers need to move quickly if they find a home they want.
While we anticipate more homes coming on the market over the next few months, the strong buying activity is likely to result in ongoing inventory constraints.
Many cities saw a drop in the number of homes sold, but average selling prices continue to remain strong.
Our most recent year-over-year, October 2019 vs. October 2018 data shows a slight (-3.9%) drop in the number of homes sold last month in the area. The luxury market continues to perform well, with the number of homes sold up (+60.7%) in the $1M price bracket. Sales in the under $500K price range remained essential flat last month while the $500,000 - $999,999 price range experienced a (+3.0%) increase in the number of homes sold.
Average selling prices were up a healthy (+7.2%) in the under $500K price range, a trend that has continued every month so far this year in this price range. Homes priced $500,000 - $999,999 sold for an average of (+1.3%) more this month compared to last year, while homes priced $1M+ experienced a (-5.9%) drop in average selling prices. Keep in mind that the average selling prices of the luxury home category can fluctuate significantly - more so than the other price categories - depending on the mix of homes sold.
Interest rates continue to be very attractive, and that is continuing to drive home sales in the 40% of our market that uses a mortgage for their purchase. 30-year fixed-rate mortgages are remaining steady at 3.75% and the FHA 30-year fixed rate stands at 3.22%. If you’re financing a larger amount, the Jumbo 30-year fixed-rate are still attractive at 4.06%. Most experts believe interest rates will remain low over the coming months, making this a good time to refinance or make a home purchase.
Let’s look at the three key market indicators, Average Sold Price, Number of Homes for Sale, and Number of Days on Market, for a good snapshot of the Palm Springs area real estate market and, its overall health.
- Average Home Sale Prices. The average home sale price last month in the Palm Springs area was $463,329, a (+6.05%) over the same month last year.
- Number of Days on Market. Homes took longer to sell last month, with days on market rising by (+3.8%) over last year to 82 days.
- The Number of Homes for Sale. There were 3,754 homes for sale last month, a slight increase over last month and a (-7.4%) decline over October of last year. While inventory remains below average, if past trends continue we'll see more homes come on the market over the coming months.
We'll be keeping an eye on these trends as rumors of a pending recsession, the upcoming election cycle, and a recent trend of rising prices in the area could all have an impact our local real estate market.
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City Standouts! What’s Up and Who’s Down?
Some were up ... some were down! The Number of Homes Sold in October 2019 vs. October 2018 was up in five cities, with about 1/2 of the cities seeing a drop in sales compared to last year: Bermuda Dunes (-28.6%). Palm Springs (-27.5%), Cathedral City (-27.3%), La Quinta (-7.7%), and Desert Hot Springs (-4.8%).
When it comes to Average Sold Price, Rancho Mirage stood out with an impressive (+22.8%) increase over last October. Cathedral City and La Quinta experienced decreases in average selling prices and Indio was basically flat.
The Number of Days on Market Increased for every city in the Coachella Valley except for Cathedral City, Desert Hot Springs, La Quinta and Palm Desert.
City Watch - Palm Springs
Number of Homes for Sale = 595 (-8.9%)
Number of Homes Sold = 116 (-27.5%)
Average List Price = $654,333 (-2.85%)
Average Sale Price = $514,943 (+5.1%)
Average Days on Market = 86 (+24.6%)
Our buyer activity remains strong, and many are having difficulty finding the right home. If you're considering putting your home on the market, let us help you get it SOLD!
If you'd like a detailed market report for a specific city, just click here: Send Me A City Report.
Give us a call at (760) 625-7229, or visit www.thehamiltonregroup.com, for an easy-to-use home search, and for information on how we can help you with all your important real estate needs.
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