January 2018 Market Update
Another magical January with beautiful desert weather, and as typical, people from all over the world are flocking to our moderate desert climate, a reprieve from freezing northern and eastern climates. I just met with folks yesterday from Bend, Oregon, who have been to the desert three times, staying a week, then two weeks, then one month, and now they are ready to buy a home in the $800,000 range and enjoy 3-4-5 months annually. Being a desert native, and around the real estate business for 20+ years, I’ve seen this repeatedly. Our temperate desert climate is an easy and relaxed place to live.
Knowing the desert has been, and continues to be a resort destination, even with year round population growing, we lag San Diego, Los Angeles, Orange County, Portland, Seattle, and other west coast market sales numbers, and values, mainly because the valley is a mix of two independent buyers, the Owner-Occupied buyer market, and the Remote Owner buyer market, which is 53% of our market. According to Market Watch LLC in association with Housing Demographics Inc, the owner-occupied market continues strong because of higher wages, the declining seven-year foreclosure penalty and improving demographics, while the remote owner market continues to struggle because of high costs and low-price gains.
Here’s the forecast for 2018:
~An even stronger “owner occupied” Valley market than 2017, with a similar Remote Owner market
~Continued improvement in the Valley homeownership rate
~Higher US mortgage rates
~Extremely strong wage growth creating “wage push” inflation (Wage push inflation is a general increase in the cost of goods that is preceded by and results from an increase in wages. To maintain corporate profits after an increase in wages, employers must increase the prices they charge for the goods and services they provide)
~Less burdensome financial regulation = more home loans
~The detached home markets could again see gains of 4-7%, attached home markets could see 3-5%
Looking at Market Trend reports in my areas of expertise; Rancho Mirage, Palm Desert, Indian Wells, and La Quinta, daily, even with improved sales numbers and values in many segments, compared to homes Pending and Sold, Luxury home Inventory remains high. Based on what I see, many homes remain over-priced. Some sellers knowing, they do not have to sell, set their expectations too high… testing the market, and their homes are sitting unsold, with few lookers. From everything I can see, 2018 sales should be stronger than 2017, though sellers must be realistic with their expectations and remember, buyers know many homes are still available and are all looking for reasonable sellers. Sellers – Unless your home is a rare and amazing showplace, be reasonable with your expectations, price your home slightly ahead of the market, and you will sell your home and net fair market dollar. Price it to high, you’re likely going to sit unsold.
Under the $1M price segment, many price segments realized gains in both the number of homes sold, and values, some were par, and few had dropped. Over the $1M price segment, sales were much slower though some gained in values.
Look – If you want to sell, pay attention to the numbers, look at the trend in your area, price it right, and you will sell, it’s that easy. Currently it’s taking from 60 -120 days to sell your home, if you are priced right. You may even have to put love $$$ into the property to get it SOLD. Do not dial your home in, in preparation to sell, and feel you can raise your price $50-$100-$150K or more, as todays buyers won’t buy into that idea. Remember, rates are on the rise, buyers are smart, and there are still plenty of homes to look at. Do yourself a favor, price it ahead of the market, sell it with a smile and move on. If you are attached to the home, remember selling your home must be a business decision, think it out, call me with any questions or concerns so I can help you make an informed decision.
Enjoy this beautiful desert paradise we live in, and be sure to call me with any questions. I welcome the opportunity to help you achieve your goal.
Please click here to view Jan 2018 over Jan 2017 sales numbers.