Year-Over-Year Price Increases and Lowest Inventory in History
The median price of Valley detached homes in March was $549,000, which is 27.3% above last year. The attached home median price in March was $345,000, up 15.4% over the last twelve months.
Prices are expected to continue moving higher by following the seasonal pattern of reaching highs in May before pulling back. Seven cities how have median price increases for detached homes over 20%, with two up more than 30%. It should also be noted that five cities have exceeded the historic price highs they made in the year 2006, with two more only fractional percentage points away.
The three-month average of total sales is now averaging 1,129 a month, which is 39% higher than last year. Due to seasonal forces, average could reach 1,200 units, or higher, over the next two months and sales staying in the high range.
Inventory continues to decline and as of this writing, there are 707 units for sale. That compares to 3,034 units a year ago. Continued high sales and lower inventory has again driven the “month of sales” ratio to new historic lows. It is now just 4/5 a month, or just a little over three weeks. A year ago, the ratio was 3.7 months. This lack of supply is causing bidding wars amongst the many home buyers and is the force driving home prices much higher.
If you are considering buying, the time is now. I see the current trend of appreciation continuing for the next few years.
If you are considering selling, now is a great time. Most homes sell within days. Don’t get left behind.
Put me to work for you! Please don’t hesitate to contact me for specifics.
Home Prices, Election, Covid-19, Oh My!
It’s been quite a November and we’re only 13 days into it.
Many of us thought after November 3rd the Democrats and Republicans would stop their constant fighting and we’d know who the Presidential candidate would be sworn into office in January. To add to our worries, Covid-19 high positivity rates smacked us again.
But there is a bright light in our housing market.
People from around the country are buying homes where they’ve been vacationing. They’re buying homes in leisure destinations as permanent residences and as secondary homes. Our Palm Springs area is one of those destination hotspots. And we locals know why; weather, beautiful scenery, lifestyle, and fabulous homes at fantastic prices.
2020 has proven to be a very big year in the real estate market in the Coachella Valley. Buyers who had been waiting for “the right time” to purchase a home found this year to be that right time.
Our residential inventory is still very low in all prices points, with the exception of the uber high-end properties. If a property is priced correctly, based on its location, sun exposure, floor plan and other factors in its community, it will sell – and sell quickly. But even in this hot market, sellers must remember that buyers set market prices, not sellers. It is a sellers’ peril if they disregard this reality. If they do, they won’t sell their homes.
As we approach the holidays, realtors would generally see a slight slowdown before our January to April active season. However, since Covid-19 people keep streaming into the desert searching for their ‘desert dream home’.
There’s been a huge surge of sales in the detached home market. In the past 1-1/2 months, home sales experienced a 39.3% increase year-over-year. The average home sale is a tick over $600,000. In the $700,000 to $800,000 price bracket, sales increased 96%. In the million-dollar and over price bracket, sales went from an average of 45 units to over 110 units a month, an increase of 144%.
Entry level homes priced between $250,000 to $350,000 are very hard to find. If a single-family home comes on to the market in this price range, it won’t list for long. In this price range it’s easier to find a condo.
With the start of our selling season, we anticipate seeing more homes hit the market, which may ease some of the upward pressure on home sales. However, as with everything else this year, nothing is running its usual course.
Stay tuned. Stay connected.
When you begin the process of looking for a home, you will hear about the necessity of putting money into escrow. While you have probably heard this word before, you may not be able to easily define what it is or why you need it. In today’s post we will take a look at the definition, as well as some of the basic principles involved with the process of escrow. When you’re done reading, be sure to contact Darlene Harwick in Palm Springs to see how she can help you find your dream desert home.
Simply defined, escrow is a bond or other document that is kept in the custody of a third party that takes effect only when a specified condition has been met. In practice, this means that a neutral party, or “middleman”, holds money or assets being transferred between two parties until the legal obligations have been met by both sides. This practice is utilized in business transactions to ensure that neither side is cheated in the process. In the framework of homeownership, escrow refers to money that is held in an account which pays for property taxes and insurance each month as part of the mortgage payment agreement. You do not have to worry about setting up the escrow account as it will be taken care of by either a title agent, attorney, or other party who is paid to provide this service.
We mentioned that the primary function of escrow is to ensure that money does not change hands until all aspects of a contract have been fulfilled. Let’s take a moment and clarify all of the parties that are involved in a real estate transaction. The three main parties are the buyer, the seller, and the lender. The lender is typically a banking institution. The escrow officer is usually an employee of a title company or mortgage company who will work with your real estate professional to ensure that all necessary information is included in the instructions in the escrow document.
Unlike your checking or savings accounts, your escrow account holds a very specific balance that will be processed during the closing on your new home. Lenders frequently request the balance to be equal to two months of the following items: estimated property taxes, mortgage insurance payments, and homeowners insurance payments. While this may seem like a lot of money to pay up-front, it will benefit you in the long-term if prices increase on any of these items. You will benefit from having a cushion in the account, rather than having to make up the difference if it is shorted.
A minimum balance requirement is an excellent safety measure to have in place, as it ensures that a negative balance is not accidentally incurred. When it comes to your escrow account, the minimum balance requirement is determined in a slightly different manner from the requirement for a traditional checking account. The minimum balance is not to dip below two months’ worth of payments. This time frame of two months is based on figuring out one-sixth of the total amount of items that are paid from this account. Just as a minimum balance in your checking account protects you from overdrafts, the minimum balance in your escrow account helps to guarantee that if your taxes or insurance payments increase, you will not be in a position where you are facing a large shortage.
Purchasing a home involves a lot of paperwork and industry-specific terms that can be overwhelming. When you work with Darlene Harwick, however, she will take care of each piece along the path of homeownership for you. Contact her team today and learn how they can make it easy for you to find the desert home you’ve always wanted to have in Palm Springs.