May 1st, 2015
BIG Hope for Spring Sales
Year (April 2014) over year (April 2015) in most price segments, we continue to see a slight dip in both sales numbers and values. The largest dip year over year was in Palm Desert, in the $250,000 -$500,000 range with 25% dip in sales and 3% dip in value (April 2014 – 101 sales/median price $328,000 compared to April 2015 – 76 sales/median sales price $319,000). On the opposite end of the spectrum, La Quinta continues to outperform the high-end luxury home market with three times the sales year over year and a 16% increase in values. The affluent see and appreciate the phenomenal values in this market, and many are pulling the trigger.
As stated in previous market updates, all four of the major down valley Cities – Rancho Mirage, Palm Desert, Indian Wells, and La Quinta are experiencing an overall decline in sales this season with the exception of a few price segments, and small drops in values in various different price segments; CLICK HERE to see details.
The story remains the same… inventory continues to outpace demand with higher levels of seasonal inventory remaining, and buyer demand has just not picked up as we had hoped for. Many have thought the drop in the Canadian dollar has been the main reason why we’ve experienced such a significant drop in sales, but the fact is this is only partially true, as Canadian buyers consume only 8% of the overall buyer market.
Personally…. I’m having a record setting year in both dollar sales volume and number of homes sold. Additionally I continue to field many buyer inquiries, take new listings, and receive listing inquiries from people aware the market is sluggish (simply from seeing all the real estate signs), and nervously awaiting the right market to sell. Many of the referrals I receive are frustrated sellers that feel they have not been professionally represented, are sick and tired of waiting for offers (probably over-priced), or have had their home fall out of escrow.
Here’s an interesting statistic; there are approx. 4,000 real estate agents throughout the Coachella Valley. Recent data indicates 94% of those agents sell 1-4 homes per year, and 70% of those 94% sell 1-2 homes per year. Anyone would question the level of experience an agent has selling 1-4 homes per year, and are they looking out for the overall best interest of the client? I would always hope so but frequently find this is not the case. Finally this leaves 6%, obviously the top agents listing and selling the entire lions’ share of homes valley-wide. Throughout the country, no matter what area or city you may be selling your home, be careful whom you choose to work with.
In closing this fact remains… late 2013/early 2014 the market tipped to a seller market. Because of this we started experiencing high levels of listing inventory, especially seasonal inventory. With high inventory levels and the drop in demand, the market tipped back to a buyers’ market. This cycle buyers are educated, cautious, and tough in negotiations. Why?… because they can be. Here in the desert, and for the time being the emotional buyer is something of the past, and I cannot reiterate enough that value pricing is the ticket that will widen your market and get serious prospects through your door. With a plethora of inventory, buyers are picky so properties with any slight form of functional obsolesce will likely sell for less, and sellers must be realistic with their expectations or their home will likely sit unsold. Until we see buyer demand pick up, prices will continue to be flat and in some price segments drop, depending on the level of demand. Hang in there, things will get better.