Will the market this Spring finally tip to a seller’s market?
Excessive rain here in the desert this year brought the most amazing colorful desert hillsides I’ve experienced in my 57 years living in the desert, reminding me that of New Zealand. Many home sellers this year are hoping the Real Estate Market will be as colorful. This week many desert homes, hotels and restaurants will overflow with visitors in the valley for one of the two Coachella-Fest events, followed by Stage Coach giving our hospitality industry a big shot in the arm. Many say the event attendees do not do much for our valley. I beg to differ, the more people that visit our desert paradise, the more popular it becomes. People that attend these events come from all over the world, many affluent, fall in love with our sunny desert climate, beauty, plethora of golf courses, amazing hiking trails, and relatively close proximity to the coast and mountains. For example, this morning I received a call from a Coachella-Fest attendee, an APPLE executive with plenty of CASH that has attended Coachella Fest the last two years, that I will very likely sell a home to this season.
It is also looking like current and future growth to our valley is colorful as well. There is considerable new home development in the Coachella Valley, in addition the hospitality industry opening the following new Hotel Resorts; Four-Star Boutique Hotel-Paseo in Palm Desert, Kimpton-Rowan Hotel in downtown Palm Springs, and Montage Resort Hotel in La Quinta, all positive signs of growth and confidence in our desert paradise.
Home Sales Activity – Good News Overall: This year Dave Kibbey & Associates is off to a record setting Listing and Sales year with just under $25 Million Pending and Sold in the 1st Quarter. Honesty, hard work, quality marketing, being in touch with the market, and great customer care pay off. Year over year, the overall number of homes sold this March were up in most price segments, with the best overall growth in La Quinta. All the four-major down valley cities enjoyed an increase number in sales prices in many price segments, with a few price segments off slightly from last year’s sales prices. Like last year… La Quinta, outperformed Rancho Mirage, Palm Desert, and Indian Wells. Indian Wells by far, the smallest of the four cities had the least movement. In fact, values dropped slightly in four of the ten price segments (see attached spreadsheet). Indian Wells as desirable as it is, I attribute slow growth to having the least amount of new development, with most homes older, and over the past two years appear to have been initially over-priced. As the market adjusts we will very likely see growth in Indian Wells with some of the valley’s most affluent living in; The Vintage, Eldorado CC, The Reserve, and Toscana CC which by the way has had good sales volume. Palm Desert enjoyed a jump in sales in every price segment this March, though it didn’t generate the large number of sales La Quinta generated.
Market volatility – Last year, there are price segments that outperformed this year either in the amount of homes sold and or values. For example, March 2016, the $1M-$1.25M & $1.25M-$1.5M price segments were on fire, yet this year the amount of homes sold dropped, as well as values in three of the four down valley cities. Last year the $750K-$1M segment was slow selling, yet this year each of the four cities enjoyed jumps in sales, though values dropped slightly in three of the four cities. Price reductions converted to sales… except; La Quinta in this price segment with the median home sales price last March $785,000 which rose to $839,000 this March. The biggest jumps this March were Rancho Mirage in the $250k-$500K segment with 27 sales last March, and 47 this March, and Palm Desert in the $500k-$750K segment doubling sales numbers with 10 last March, and 21 this March.
Finally, in the Luxury Market; Rancho Mirage in the $1.5M-$1.75M segment enjoyed eight sales this March up from five sales last March. In the same price segment, Indian Wells doubled the number of sales this March with 4 sales (2 last March) along with a slight rise in value up to a median sales price of $1,630,000. The two largest jumps in the high-end luxury market $3M and up, were Indian Wells from no sales last March and three sales this March with a median sales price of $3.3M, and La Quinta jumping from one sale last March to three this year with a median sales price of $3.635M.
Year over year Snapshot – First Qtr. 2017 over First Qtr. 2016 – My market update spreadsheets consist of the four desert down valley cities; Rancho Mirage, Palm Desert, Indian Wells, and La Quinta, with each broken down into ten price segments that collectively offer 40 median sales prices. This year 20 of the 40 price segments, or 50% of the median Sold prices dropped slightly year over year. Clear evidence we’re still experiencing a buyers’ market, and we must pay attention to value in the eyes of the buyer. Many of these homes were initially listed too high, and with a price reduction or two, the home Sold.
Overall this is great news, and market is in a better place. As we move through our peak selling season this year, let’s hope this momentum increases to a point where sales outpace seasonal inventory levels. If so we will see values on the rise.
Should you have questions about this market update, or your thinking about buying or selling, I welcome the opportunity to speak with you and help you make an informed decision.
Until next month, enjoy the lifestyle our desert paradise offers.
For more details on sales numbers, please click here.