Jeannie Niles Real Estate Investment
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Marketwatch: January 2007
Palm Springs Area
| Type | New Listings | Pendings | Listings/Sales Ratio |
|---|---|---|---|
| Single Family Homes | 1380 | 272 | 5 to 1 |
| Condos | 526 | 95 | 5.5 to 1 |
| Multi-Family | 39 | 7 | 5.6 to 1 |
San Diego
| Type | New Listings | Pendings | New Listings/Sales Ratio |
|---|---|---|---|
| Downtown Condos | 164 | 53 | 3.1 to 1 |
As we anticipated, the sales activity as well as new inventory increased substantially from December.
Prices are not declining in most areas. We no longer have the “the house across the street sold for $700,000, but I have a better tile floor so my house is worth $750,000 scenarios. I see this as a good thing as the market stabilizes and returns to normalcy. Those of us that have been in the real estate market for a long time appreciate this type of market.
A couple of sectors that are having some “issues”...Multi-family. Cap rates actually declined to around 2.5 to 4 in most areas during the 2004/2005 market. Without the benefit of rapid appreciation, this type of cap rate is not attractive to most investors. Inventory is increasing dramatically for multi-family and prices are being reduced. I believe this will continue until rents start rising enough to bring cap rates back into the 5 to 6 range.
Areas that have a large number of new single family home tracts for sale are experiencing price reductions on resale property. This is especially true in Desert Hot Springs and La Quinta. The builders have a lot of unsold inventory, the investors that wanted to “flip” properties are out of the market, builders are lowering prices/offering substantial concession packages. Why would someone purchase a resale home that is 10 years old when they can buy a new home for the same price?
For the first time in my 30 years of experience, the number of “back on the market” properties are almost 50% of the properties going into pendings. Apparently buyers are under the impression during the escrow period, they can ask for lots of concessions/repairs that sellers are declining to do.
That’s my take on things for this month. If you have any questions or want clarification of anything, give me a shout.
Happy February and don’t forget to send your loved one a Valentines Treat
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Seven properties went into escrow in October.
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For Coachella Valley
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Multi-family properties have been the hardest hit segment in the desert area for number of sales during the current real estate downturn.
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I am always frustrated how the media and other trade groups use statistical data to prove the point they want to make, thus I like to do my own statistical research.
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It can be very profitable purchasing bank owned properties in the current real estate market.
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Some of the most outrageous episodes in property ownership that the owners lived to tell about.
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Only 5% sales agents or brokers actually own investment property, and only 10% actually sell a property.
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Jeannie Niles Real Estate Investment
P.O. Box 317
Palm Desert, CA 92261
P: (760) 360-4020
F: (760) 340-9069
E: jniles@realestate-investment.com
