Palm Springs Market Watch: May 2009

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

Total inventory available January 2008 was 7681 properties. This was the largest amount of available property since the downturn began. As of 5/31/2009 total available properties are 5259, which represents a decline of 31.5% from the peak.

Inventory is anticipated to start rising again once the banks continue their foreclosure process. There was a foreclosure moratorium from December 08 to approximately March 09, while everyone was waiting for the Obama Administrations plan to stem the foreclosure crisis.

Prices declined substantially the first quarter of 09, in fact the huge decline in our area was from October 08 to March 09.

Many properties are being sold at price reductions of 50 to 80 percent off their all time high in 2005 and 2006.

Opportunities abound! Single Family Homes under $100,000, duplexes for $150,000 and condos for $50,000!

It’s now possible to earn a higher income return on real property at the current prices than most other investments available.

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	3572	453	619	1.4 to 1	13%
Condos	1546	99	225	2.3 to 1	6.4%
Multi-Family	141	20	22	1.1 to 1	14%

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.