Palm Springs Area - (Palm Springs, Cathedral City, Rancho Mirage, Desert Hot Springs, Palm Desert, La Quinta, Indio, Bermuda Dunes)
4% DECLINE in Inventory During Month of August 2009. Many properties priced “under” fair market value allowing the market to set the price through competitive bidding. Banks more cooperative in allowing short sales for investor owned properties. Less Amount of Time for Banks to respond to Short Sales. Rental Market firming up.Banks are quite different from a year ago. Most banks are now easier to work with and it is possible to sell as a short sale, even if you are an investor owner of a property that is “under water”.
Still an unknown what current foreclosure filings will do to inventory. With banks being more willing to negotiate/work with investors as well as owner occupiers, the new supply may be diminished.
A total of 581 properties closed escrow in August. I track properties “going into” escrow because that statistic gives more accurate information as to what the market is currently doing. Once a property goes into escrow, it can take up to 90 or 120 days to close!
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Some explanations of my report:
Total Inventorytells 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.
Pendingstells 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 | 3000 | 332 | 400 | 567 | .775 to 1 | 24.4% |
| Condos | 1342 | 89 | 88 | 233 | 1.3 to 1 | 13.2% |
| Multi-Family | 127 | 7 | 11 | 16 | .89 to 1 | 14.2% |
The category “contingent other” is when a property is placed into escrow but the buyer still has contingencies in the transaction. Pending is when all contingencies have been removed and the buyers deposit becomes non-refundable. Agents are supposed to report a property going into escrow as “contingent other” until all contingencies are removed, at which time the property is moved into “pending” status. Unfortunately some agents are now leaving their listing in the “contingent other” status until it is ready to close escrow and some agents place an open escrow into pending immediately. This inconsistency in reporting will skew the results somewhat, but the trends will remain the same .Any questions or suggestions, PLEASE 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.
Hi, I'm Jeannie. For over 25 years I've helped investors make money in markets both good and bad. 
