The U.S. housing market remains robust, with strong activity reported across both rental and residential housing fronts. Single-family rent prices are increasing rapidly, as demand for single-family housing and inventory constraints forces some buyers to rent, increasing competition and pushing rents up across the nation. Meanwhile, sales of new construction single-family homes recently hit a six-month high, rising 14% to a seasonally adjusted rate of 800,000, according to the latest data from the U.S. Department of Housing and Urban Development.
In October, the median price of a detached home in the Greater Palm Springs area was exactly $600,000, which represents a 12 month gain of 13.7%. The median price for attached homes in October was $370,000; a year ago, the October price was $305,000. This represents a gain of 19.3%. Because of their lower price points, attached homes continue to help fill the low supply levels homebuyers find with detached homes.
On November 1st total inventory in the Valley was 915 units, which compares to 883 units last month and 2,014 units a year ago. This ongoing paucity of inventory continues to be the driving force lifting home prices higher. The “months of sales” ratio throughout the Valley on November 1st was 9/10ths of a month, which is one tenth higher than last month but still far below the 2.4 months of a year ago. It is these very low ratios that continue to make this a powerful seller’s market. We believe there is little price risk since demand continues to far outstrip supply, even after the strong price gains of the last year.
We are introducing a new method to calculate city home prices that we believe better represents what’s happening in each city. We present the price of the average size home, and the calculation is closer to the method a home appraiser uses when valuing homes. The advantage is you’re always pricing the same, average size home in each city. The first numerical column is the size of the average home; it’s always the same. The second column is the median price per square foot of sales that month. The third is the price of the average size home (i.e., the product of the two columns). Cities are ranked by the 12-month percentage change.
With interest rates inching upward, and experts expecting further rate increases on the horizon, motivated buyers are hoping to lock in their home purchases to take advantage of what are still historically low rates.
If you’re thinking of buying a home, rest assured you do have more options now than you did earlier this year – and that’s a welcome relief. That said, today’s market is still highly competitive. This isn’t the time to slow your search. It’s actually the season when the number of homes available for sale tends to peak. Focus on the additional options with renewed energy this season and be prepared for ongoing competition from other buyers.
If you’re considering selling your house, realize that while growing, inventory is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line. Eager buyers will likely be motivated to act before the holidays, giving you the benefit of a fast sale.
If you or someone you know is looking to buy or sell a home please give Mark a call 760-766-6093.