Jeannie Niles Real Estate Investment
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How Much Have Real Estate Prices Really Fallen?
I do my own research and opinions on this blog are only mine based on direct observations and research that I do on a daily basis.
I read the local Palm Springs newspaper, The Desert Sun, which can also be accessed as http://www.mydesert.com/apps/pbcs.dll/section?category=business04
An article published 2/12/08 “Dissecting area real estate woes” describes a different real estate market than I know in the Coachella Valley. This article states that the average home price has inched up in the last year. I am certain by selecting the right criteria a case to support this could be made.
The reality of the market as I am seeing it is that prices have fallen 35 to 50% in some types of product in this area.
Examples:
Three Bedroom, Two Bath Single Family Home, Desert Hot Springs, 1500 square feet, 15 years old, excellent condition.
| 2005 sale price | 2007 sale price | Percent Decline |
| $270,000 | $170,000 | 37% |
Two Bedroom, One Bath “Indian Creek” Condo, Palm Desert.
| 2005 Sale Price | 2007 Sale Price | Percent Decline |
| $220,000 | $114,000 | 49% |
Three Bedroom, Two Bath Single Family Home, Cathedral City, 1750 square feet, 15 years old, excellent condition.
| 2005 sale price | 2007 sale price | Percent Decline |
| $365,000 | $220,000 | 40% |
The sales prices reflected above are under replacement cost. I would not anticipate prices falling much further.
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Income property has once again become “Income property”.
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There are many small income properties available in the area. Prices here have declined over 50% since the peak of the market late 2005/early 2007.
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It’s possible to obtain some great apartment financing. 25% down payment and interest rates at 6% or slightly below.
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Cap Rate is an investment tool for analysis that enables an investor to compare one investment to another.
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Cap Rate is the best tool for determining the value of an income property.
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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
