1st Quarter 2019 Market Update Year over Year
Hello Valued Friends and Clients,
The Coachella Valley is not only an amazing place to live, real estate is a bargain compared to any other cities our Desert dwellers come from; San Diego, Orange County, Los Angeles, San Francisco, Portland, Bend and Seattle areas, Prices are 3-4-5 times higher than our desert area bargains. The Desert remains a steal!
For Dave Kibbey & Associates, it’s been a very busy 1st Quarter with 28-homes Pending & Sold totaling $24 Million in Sales. While the market has continued to remain strong in most price segments, many luxury listings continue to sit unsold, which suggests some may be priced too high. This is not uncommon when we start seeing price reductions in all price segments, some significant in higher price segments. (This report specifically covers the areas of my expertise; Rancho Mirage, Palm Desert, Indian Wells and La Quinta)
MARKET- We continue to experience a strong economy and market. Surprisingly, we are now running 11-years into another traditional 7-10-year historic real estate cycle. Knowing this and the fact that High Season is almost over, many sellers are highly motivated to get their homes sold. As previously mentioned, we are starting to see more price reductions than we did last year at this time, mainly above the $500,000 price segment, a typical sign that the market may be losing some steam. While sales have remained strong, new and newer home sales are HOT and typically sell faster than older homes, excluding true Mid-Century Modern homes, which tend to sell fast and at a considerably higher price per SF than other homes. For example, Toscana CC, Indian Wells’ newest luxury home community, has experienced record sales numbers the past two years. Because of this, older communities for example – Indian Wells CC, both sales and in some cases, values, have dropped because of the draw toward a newer adjacent community. Once Toscana CC is built out, Indian Wells CC will very likely start seeing a bigger draw and will eventually see values come back. On another note, Eight out of every ten luxury homes sold today are Contemporary-Modern “A less is more look and minimalist design,” with less compartmentalization for simple living, ultimately causing older traditional homes to sell slower, and many times for considerably less price per square-foot. Architectural designs are a matter of preference and all homes will eventually sell. Styles come and go, so if you love Mediterranean or Spanish Design instead of Contemporary or Modern, embrace the warmth of these designs and take advantage of these times. The getting is GOOD!
What’s ahead? Over the past two years, summer sales have been strong in the lower price segments, with sales numbers exceeding high season in some segments. This does not hold true in the Luxury Home Market as luxury home buyers typically have two or more homes and they leave the Desert when it gets hot and do not come back until the Fall. It’s not a good idea to leave a Luxury Listing sitting on the market unsold throughout the summer. What will happen with the market in the coming months/years? That’s the “64 Thousand Dollar” question. History is usually a good indicator. One thing we do know, history repeats itself and markets are cyclical. With a strong economy, the wave we’ve been riding may “hang in there” for a while longer. My advice: If you’ve been thinking about selling and it’s important to you to net the most you can, you should seriously consider listing your property sooner than later. If not, enjoy every moment of your desert lifestyle living and reach out to us when you’re ready. Our objective is to help our clients reach their goal, no matter what, no matter when.
INVENTORY and how it effects the market-
It is easiest to understand Months of Inventory based on Closed Sales. This helps you understand how long it can take to sell your home based on both the number of Active-Listings and how this number is affected, based on how many homes are selling in this price segment. (see below)
Months of Inventory based on Closed Sales:
Under $500,000 There is a 3-Month Inventory of Homes on par with last Year
$500-$1M range There is a 5.5-Month Inventory of Homes, down from 5.6-month Year over Year
$1M-$1.5M range There is a 7-Month Inventory of Homes, down from 8-Month Year over Year
$1.5M & Up There is a 15.1-Month Inventory of Homes, up from 13.9-month Year over Year
Average Listing Price to Sold Price %:
Under $500,000 Sold @ 94% of Listing Price on par with last Year
$500-$1M range Sold @ 94% of Listing Price on par with last Year
$500-$1M range Sold @ 91% of Listing Price, 90% last Year
$1.5M & Up Sold @ 92% of Listing Price, 90% last Year
Average Active Listing Price:
Under $500,000 $361,000 up slightly Year over Year $352,000
$500-$1M range $711,000 on par with last Year
$500-$1M range $1,249,000 down slightly Year over Year $1,253,000
$1.5M & Up $3,243,000 down Year over Year $3,473,000
Featured NEW Listings: We have some of the BEST listings in the desert
In closing I’d like to give a “special thanks” to my amazing Team of Associates – Wendi Brinson, Todd Later, Nyla Patzner, Galina Tucker and Jack Menzia. The culture we share and service we offer, is nothing less than amazing. I like to refer to this synergy as a smooth-oiled-machine, offering only the highest level of care, service and professionalism to our clients.
Finally, a warm Thank You to our current and past Clients, we so appreciate and welcome the opportunity to serve you. I hope you find this information helpful. Please feel free to call or write with your thoughts, questions or comments. I welcome the opportunity to speak with you.