Palm Springs Area - (Palm Springs, Cathedral City, Rancho Mirage, Desert Hot Springs, Palm Desert, La Quinta, Indio, Bermuda Dunes)
13% decline in single family home inventory. (Good)
3% decline in condo inventory. (Good)
25% decline in new listings for single family homes. (Good)
13% decline in “pendings” for single family homes. (Disappointing)
17 multi-family properties went into escrow this month! (Good)
15 of these were REO’s. (See separate REO Report for April)
Other stats remained constant as compared to March.
Prices have continued to decline. A home at 66221 4th Street in Desert Hot Springs that I sold 9/06 for $150,000 sold for $22,000 in March 09, a price decline of 85%
This would equate to a 2.8 x gross or a 14% cap rate! In my 30 years of real estate brokerage, these types of “income” returns have never been available in real estate ownership.
Most properties in the desert have declined approximately 50 to 60% of their 2005-2007 value. The majority of this decline occurred in late 2008/early 2009, after the credit melt down/stock market decline of Mid October 2008.
Hopefully, inventory will continue to decline, which should create firming up/increase in prices. One “unknown” however is how much property the banks are currently holding in their inventory. Should banks begin flooding the market with additional REO properties, this will create additional downward pressure on prices.
It’s very difficult to “time” the market for the exact bottom. The returns referenced above are a higher return than any other investment available.
Interest rates are at 50 year lows which will not be available indefinitely.
Market conditions are changing so quickly and there are so many different opinions, please feel free to contact me for any specific questions or discussion. That’s what I’m here for!

Some explanations of my report:
Total Inventory tells us how many properties are on the market for sale. When inventory is rising, prices will fall because there are more properties competing for buyers.
When inventory is declining, prices will rise, such as we saw in 2004 to 2006.
Pendings tells us how many properties went into escrow for the month. This gives us a very quick picture of the current activity.
Charting “Solds” or actual closed escrows will provide pricing information but in a changing market such as we are in currently, it will not reflect an accurate picture, i.e., Solds usually were placed under contract at least 30 and sometimes as much as 90 days prior to title actually transferring to the new buyer.
| Type |
Total Inventory |
Pendings |
New Listings |
New Listings/Sales Ratio |
Sales As Percent Of Inventory |
| Single Family Homes |
4004 |
517 |
614 |
1.2 to 1 |
13% |
| Condos |
1684 |
114 |
293 |
2.5 to 1 |
7% |
| Multi-Family |
146 |
17 |
26 |
1.5 to 1 |
12% |
Each month I reiterate you have to understand the numbers to really see what is happening in the marketplace. Anyone can make a case for whatever they want to project if they use the right numbers.
*REO – stands for Real Estate Owned and is a term that means Bank Owned Real Estate…obtained from a foreclosure action.
-- Jeannie