Palm Springs Real Estate Market Mid-Year 2019 Highlights:
- The median price in Palm Springs was up 12%.
- Closed Sales decreased 10 percent in Cathedral City
- Closed Sales decreased 13 percent and Inventory increased 24 percent in Rancho Mirage
- Inventory increased 18 percent in Indian Wells
- Inventory increased 8 percent in Palm Desert
- Active Listings increased 10 percent, Inventory increased 21 percent in Indio
- Pending Sales and Closed Sales decreased 10 percent in La Quinta
- Inventory increased 23 percent in Desert Hot Springs
The weather is Hot! How about the greater Palm Springs area real estate market?!
At midyear, the median price in the Greater Palm Springs area was up 5%. This comes as residential real estate sales have slowed, about 7 percent lower than the first half of 2018.The number of Active listings are about the same, however the supply of properties is at 4.0 months, 8 percent higher than the first half of 2018 (A balanced market is about 6 months of inventory). It showed signs of softening for the first time in recent memory.
In April, the S&P Case-Shiller Home Price Index dropped for the 13th month in a row. To be clear, home values are still going up nationally and Coachella Valley; they’re just rising at a more moderate rate. Annual gains for April clocked in at 3.5%, down from 3.7% in March.
But in some markets the shift has been far more dramatic.
Take Seattle. For two years price growth accelerated faster there than anywhere else in the country. Then between April 2018 and April 2019, the year-over-year price change shrunk from 13.8% growth to a 0.0% flat-line. Over the same time frame, San Francisco fell from 10.9% to 1.8% annual gains.
Experts say builders have faced a number of obstacles to ramping up new construction, including high land prices, labor barriers, material costs, and the onerous process to obtain permits.
All this puts pressure on profit margins so when builders do construct a new house, it tends to be more on the luxury end.
Finally, as people move less often and more boomers decide to age in place rather than downsize. That’s just kind of holding up a lot of the number of active listings here in Coachella Valley. Otherwise that would be lubricating the whole system.
The perfect scenario going forward is if there can be a robust increase in new home construction on the mid-priced and low ends, the housing market will be more of a bright spot for the broader economy.
Will our seller’s market continue? Probably. But it’s not all bad news for those looking to jump on the home buying bandwagon. First-time buyers can expect less competition than last year and the Fed is giving them no reason to think that mortgage rates should be expected to increase significantly.