Market Watch

I have selected four primary geographic areas to monitor in the southern California real estate market. Look for a post each month summarizing changes in these areas.

Palm Springs Area

This includes Palm Springs going east through Indio, also includes Desert Hot Springs and Mission Lakes. This area is also known as the Coachella Valley.

Single Family Residences

Aways a good indicator of the market since this is the product that sells the most.
Condos

In a high priced market of single family homes, more pressure is put on condos because they are usually less expensive, so if you can’t afford a single family home, you can probably squeeze yourself into a condo.
Multi-Family

Also known as Residential Income in certain areas.

San Diego

Downtown Condos

This is an area that according to all the bubble theorists, economic prognosticators, and analytical real estate brokers such as myself was high risk because of rapid price escalation and new product becoming available, thus increasing inventory exponentially. I counted eight construction cranes within a two mile radius for new high rises two weeks ago!

These four areas are not meant to be totally representative of all of Southern California, but rather are meant to give some indication of what/where is happening in areas I find of particular investment interest. I admit to having no particular scientific skill in trend analysis, but I do believe that long years of experience have given me some insight into what is and is not important.

I believe the most important factors to monitor are new inventory, existing inventory and, most importantly, pendings. Pendings are properties that have, theoretically at least, been sold. They have gone into escrow but have not yet recorded/closed escrow. In a rapidly changing market, whether it be up or down, pendings reflect “what is occurring” right now.

Traditional appraisals are based on solds — i.e. properties that have closed escrow. When a market is constant or relatively flat solds are great to use as an opinion of value. In the current market however we need more recent data and pendings are what I use.