Palm Springs Market Watch: June 2008

Palm Springs Area - (Palm Springs, Cathedral City, Rancho Mirage, Desert Hot Springs, Palm Desert, La Quinta, Indio, Bermuda Dunes)

Type	Total Inventory	Pendings	New Listings	New Listings/Sales Ratio	Sales As Percent Of Inventory
Single Family Homes	4550	395	806	2 to 1	8.7%
Condos	1555	86	229	2.7 to 1	5.5%
Multi-Family	199	8	19	2.4 to 1	4%

The trend has continued to improve, not by a huge amount but this is the summer months, the temperature is well over 100 degrees and property sales are only slightly less than May of this year.

Total available properties decreased by five percent when compared with May. In February of 2008 the total inventory for all categories totaled 7562 properties. We now have 6304 properties on the market reflecting 1258 fewer properties, a decrease of 17%!!!!

It is my opinion the bottom of the market in the Coachella Valley was February of 2008. This trend should continue unless we have a sizable increase in interest rates or some earthshaking unforeseen catastrophe.

There are a substantial number of foreclosure properties coming on the market, however investors have returned to the market and if a property is priced properly it will sell very quickly. It is impossible to perfectly time the market, but I feel 2008 will be the best year for bargains in this real estate downturn.

There are still some great buys to be had, i.e. 1700 to 2000 square foot homes in the $225,000 to $260,000 price range that will rent for $1400 per month in Cathedral City. Condos in South Palm Desert for $120,000 that will rent for $925.00 per month are also available. This is in Indian Creek Villas, a great starter investment that is easy to manage and very stable.

The rental market is doing well….in fact we have no vacancy at present for our existing rental homes. Many of the folks that have lost their homes through foreclosure are now becoming tenants. We have rented several of our properties to persons in this situation and they are great tenants since they are used to being owners.

The National News has been very disappointing this month. Most of the statistics being quoted are from the first quarter of the year. It was pretty scary about Fannie Mae and Freddie Mac’s problems, but all indications are that the federal government will provide assistance.

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.