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Real Estate Market Update January 2017 For The Greater Palm Springs Area
Dated: January 25 2017
Market Update January 2017
What's been going on in the greater Palm Springs area real estate market?
With 6.3 months of sales, our market is balanced. This is part of a positive trend, though, as it is one month less than it was at this time last year. Remember, six months of sales (or absorption rate) is a balanced market. A higher number would favor buyers, and a lower number favors sellers.
If we look at the absorption rate by price range for all Coachella Valley area cities, we can see that the highest absorption rate is for properties listed over $1 million at 18.7. That means it would take 18.7 months to sell all homes listed at $1 million or above if no other home came onto the market. This is also a positive trend. At this time last year, the absorption rate in this price range was 20.9 months.
As you can imagine, the lower price points have a lower absorption rate because there are more buyers who qualify for those types of properties. Homes priced below $200,000 have the lowest absorption rate at 3.2 months of sales, which is also lower than last year when the rate was 3.9 months.
As of January 1st, inventory for the entire Coachella Valley stood at 4,585 units, which was 10% lower than this time last year. However, it's exactly the same number of units we had on the market on January 1st, 2015. Much of this is the result of higher sales volume numbers in the last few months of last year compared to a year ago.
At $340,000, our median price for detached homes for the whole Valley is effectively unchanged as of January 1st from last year at this time. However, this year's change in the median price for Valley condos has increased about $2,000, or just under 1%. The yearly change in the median price of individual cities shows a really positive trend for detached homes, but a slightly negative bias for condos. Palm Springs and Desert Hot Springs continue to be the Valley's leaders with 8.1% and 15.6% gains, respectively, while Palm Desert and Rancho Mirage each experienced year over year reduction of values.
After a period of stagnation in our market, the growing trend in long-term sales volume in both detached homes and condos is a very positive indicator in our market. Condo sales rose 9% year over year and detached sales rose 2.8% from last year. Since the Fed’s interest rate increase in December, interest rates are still hovering around 4% and slightly higher. Inflation is expected to increase in 2017, and as inflation increases, bond prices move lower, and mortgage rates typically increase. Most experts, however, don't expect interest rates to go above 5% in 2017.
Interest rate volatility along with market uncertainty is expected with the new presidential administration, but the economy seems to be strengthening. We're predicting that our real estate market will continue to improve overall, which makes now a great time to buy or sell a home in the greater Palm Springs area.
Ranked in the top 1% of all agents valley wide and named one of the Palm Springs Life Top Realtors for 2019 and 2020, Will is an Associate Broker/Team Leader of the WILL COOK GROUP with Keller William....
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