Mortgage interest rates ticked a bit higher in February, but remain below their February 2020 levels. Interest rates may rise a bit further in coming weeks, but according to Freddie Mac chief economist Sam Khater, “while there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3 percent range for the year.” With rates still at historically low levels, home sales are unlikely to be significantly impacted, though higher rates do impact affordability.
The Median Sales Price in the Greater Palm Springs area was up 22 percent to $527,000 for Detached homes and 19.4 percent to $340,250 for Attached homes. When we compare city median prices in February against year ago values, we see that every city is participating in this strong price move. Four cities now have year-over-year price increases for detached homes above 20% – Indian Wells, La Quinta, Palm Springs, and Desert Hot Springs.
Inventory broke under a thousand by registering just 902 units on March 1st. This number, which includes attached and detached homes, is by far the lowest inventory in history. This imbalance of prospective buyers to available homes for sale will continue to support multiple offers and, with it, higher home sales prices, as we go into the typically busy spring market. We believe this will probably reverse once
the vaccine is widely distributed.
We tend to see a lot of all-cash offers in a seller’s real estate market. When demand begins to exceed supply, many buyers and investors use all-cash offers to outfox the competition.
If you’re using a mortgage loan to buy a home in 2021, you have to accept this harsh reality. There might come a time when you’re competing against one or more cash offers. And as they say, cash is king.
Be patient and persistent with your home search, but be realistic as well. The truth is, it’s a tough time to buy a home in many parts of the country.
Selling, buying, and making a move in any market is difficult, but this market in-particular requires a strong strategy. I am sure you have plenty of questions about your next step and I am here to help. Please reach out 760-766-6093 and schedule a one-on-one consultation and I can help you envision your next step.