Palm Springs Market Watch: July 2009

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

41% decline in inventory since 1/31/09

Multiple Offers on Most Listings

Many Listings sell OVER Listing Price

Investors return to market with Cash Purchases

If no additional catastrophe occurs like the October 08 credit meltdown, the bottom of our market occurred in February 2009. Sales have increased each month since February and inventory has declined.

In February it was possible to purchase a home in Desert Hot Springs for $50,000! Those same homes are now selling for $100,000!

Duplexes that were selling for $150/160,000 are now approaching $200,000.

The Federal Reserve today kept interest rates at historical lows and indicated they would continue that policy.

It’s an amazing time to purchase real estate.

Questions? Comments? Send an email or give me a call.

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	Contingent Other	Pendings	New Listings	New Listings/Sales Ratio	Sales As Percent Of Inventory
Single Family Homes	3137	321	388	704	1 to 1	22.6%
Condos	1380	97	74	226	1.3 to 1	12.4%
Multi-Family	134	9	16	28	1.1 to 1	18.7%

The category contingent other has been added this month. Most of the time a buyer has 17 days from the date of acceptance in which to remove all contingencies and his/her deposit goes non-refundable. Agents are supposed to report a property going into escrow as “contingent other” until the 17th day or when all contingencies are removed, at which time the property is moved into “pending” status. I have discovered many agents are now leaving their listing in the “contingent other” status until it is ready to close escrow, thus the reason I have added this category. Any questions regarding this, let me know!

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.