gail wrote this at 2:06 pm on May 4, 2007:

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There certainly has been a lot of talk about the real estate market this year and how it has dramatically changed from a seller’s market to a buyer’s market. If you believe all that you read on a given day, you will believe that we are presently in a depressed market and only fools would rush in! Then, on another given day, you will read that home sales are up and prices are down. Still, if you pick up the paper on yet another day you may read that home sales are down, but the prices are up from last year. What we hear or read seems to depend on the author of the piece and his /her agenda. So, what is really happening?

Well, first of all, I think that it is important to separate the Desert market from all other markets. The Desert is still one of the lowest priced desirable places to live in California. “Coachella Valley has really seen better numbers than a lot of areas nationally and in parts of California,” said Sam Schenkl, executive officer of the Palm Springs Regional Association of Realtors. The reasons for this are simple: the baby boomers are ready for their dreams to come true and this is where they want to be. Also, Californians living in the coastal areas are often cashing in on their large equity gains, and moving to the Desert where, in comparison, the prices are still very low, and the quality of life is very high.

However, given the above statements, it is still true that the market has changed substantially in the Desert from a year ago. It has turned from a seller’s market, with very few homes to choose from, to a buyer’s market with twice the inventory of a year ago. Because of this, the prices have dropped from last year. In my opinion, they have come down about 10%. Since the prices went up 60% in the last 3 years, the fact that they have now come down 10% does not make for a depressed market. Unfortunately, it is true that there are sellers who bought when the variable interest rates were 5% and took out 100% loans. Those loans are now adjusting and suddenly those buyers have found themselves with mortgage payments twice what they were, and can’t handle these new payments. Some of those homes are now in foreclosure. However, according to Senator John Seymour, former real estate broker and President of the California Association of Realtors, the notices of default for homes in the Desert are still at a very low percentage, regardless of what you read in the papers.

So, what does all this mean? Despite the fact that it is now a buyer’s market due to the fact that there are twice as many homes for sale as there were a year ago, homes are still selling-they are just taking longer. On average we have noticed that it is taking roughly 4 to 5 months for homes to sell now. The Envision Group, a marketing firm from L.A. just completed a report on the housing market that states that there are the same number of buyers out there from a year ago, but just more inventory, so the market “feels” much slower because there are fewer buyers proportionate to the available homes.
DataQuick (another Real Estate data service) reported: “Overall home sales in the valley were up considerably in March compared with February. Units sold jumped nearly 33 percent - 937 homes sold in March from 705 in February”.

Many buyers are still waiting for the market to hit the bottom. They are reading the papers and waiting for the media to announce when the bottom hits. In my opinion, the fact that the homes are selling and the inventory is now beginning to decline indicates that we do not need to wait for the media to wave a magic wand. The prices have come down, homes are definitely not going at the listing price, but the homes are selling. We are even starting to see some multiple offers. My feeling is that prices are now stabilizing. Although the homes are taking much longer to sell, due to the fact that the buyers have more choices, the homes are selling and the inventory is starting to go down from where it was a few months ago.

I am very optimistic about the current market. I feel that this is a normal market, as opposed to the craziness of a few years ago. If you are realistic in your real estate goals, whether you are a buyer or a seller, there are tremendous opportunities for you in our Desert.

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