Summer is clearly here with the desert heating up to 115 degrees today. Laughing…. I always tell people from other areas there’s a lot to be said for summer nights in the desert, especially when you’re enjoying your pool. The days are find too… as long as you’re in your air conditioned house, office, favorite restaurant, car, store, theater, or… in your pool. Snowbirds are all off to cooler regions throughout the west and other parts of the world, and the market continues to chug along with no fluidity. Sales are slow with higher inventory levels continuing to outpace demand. A fair amount of properties are selling, mainly $900,000 and below and happen to be either good buys or an over the top amazing or unique property.
It’s certainly not a bad market, just not a great market. I’ve had a good year thus far, since Jan 1st I’ve Sold 24 properties in price points ranging from $250,000 up to $2.5Million, and have 4 in-Escrow, though it certainly hasn’t been easy. What’s interesting is that many of the price points that were not performing in 2014, for example $1M -$1.5M performed well this year, and last year you couldn’t give them away. As I’ve indicated in previous updates 2015 sales year over year have dropped anywhere from approximately 5-25% depending on price segment and area, and in most segments values are also down anywhere from 2-10%. Both agents and sellers thought sales this season would be better and continue to improve. Talking with agents and clients from along our California western coastal regions from San Diego up to Santa Barbara, there is little to no inventory, and many properties are selling above asking with multiple offers. This is certainly NOT the case here in the desert. With volatile levels of seasonal inventory, along with lower levels of buyers demand, many homes have been sitting upsold for months. Furthermore in order to sell, many sellers with high levels of motivation, have had to do one or more price reductions to bait buyers who seem to have low levels of urgency, clearly see the volatility in our market, and are well aware the market has tipped back to a buyers’ market.
Knowing this presents a great time for buyers who have been thinking of buying, to get out and pull the trigger. Also a good time for sellers who have been thinking of selling and stepping up to a different property. It is easier to make a lateral move, and get a good buy on your replacement property. After all recurring expenses like property taxes are based on your new sales price, so taking less on your sale and in many cases getting a great buy on your purchase can not only make up the difference in some cases on your sale, but also keep your property taxes down.
Looking at today’s market trends, inventory in every desert city is dropping. Naturally we see inventory drop in the summer, though this week inquiries and sales are starting to pick up, as I have 3 offers sitting on my desk as I write this update. Knowing all of the above-mentioned, I believe we may have a busy summer. If this is the case, we will likely see inventory levels drop back into healthy ranges, prospective buyers will see this movement, buyer urgency levels will increase and we will experience a healthy market again.
I hope you find this information helpful. Please feel free to reach out to me if I can help you regarding any real estate matter.
Until next time… Stay cool!