Over the last 3 years, the inventory of Homes For Sale in the Palm Springs and surrounding desert cities did not increase much as prices rose. Yet, it has dramatically done so (more than 50%) within the past 3 months, having gone from under 3,000 units to around 4,700 units, indicating a Buyer’s market. Inventory is currently at the highest level since February 2012. Up 7.7% compared to last year, it is down 9.3% compared to last month. On December 1, the valley’s months of sale ratio went to 6.8 months, the highest reading in 4 years. The greatest increase was in homes priced between $400,000 and $600,000. In homes over $900,000, the ratios are declining from a year earlier.
Home Prices experienced moderate gains in 2014, as were predicted following the double-digit increases in 2013. In November, the Average For Sale Price (in thousand) was $749 -up 26.3% compared to last month and up 11.1% compared to last year. The Average Sold Price per Square Footage is $214 -up 9.4% compared to last month and up 8.1% compared to last year. Generally, levels that are in line with current wages and interest rates have been reached. Notable is that, in comparison to other desert cities, Palm Springs experienced a 16.9% 12-month change (per square foot) and is now only 11% away from its all-time historic highs. Whereas a low 8% distressed sales rate should not affect fair pricing for the market, a long-term damaging effect is anticipated.
The number of Homes Placed Under Contract in November was 793 -up 9.4% compared to last month and up 5.5% from last year. 585 units sold, reflecting a 15.8% increase from last month and a 15.2% decrease since last year. Interestingly, Home Sales in Palm Springs have increased 10% and 30% in Indio within the past 3 months. The Average Sold Price (in thousand) was $406 -up 12.8% compared to last month; up 6.6% from last year.
The Average Days On Market trend remained steady at 100 -down 4.8% compared to last month and up 23.5% from last year. The Sold/Original List Price Ratio of 94% is rising, up 1.1% compared to both the last month and year. December 2014 U.S. Economic & Housing Market Outlook released on December 16, Freddie Mac predicts the biggest year for home sales since 2007!
In 2014, Home Value gains grew at a rate of 4.5%, and in 2015, they are expected to increase by 3%, according to the report. Rental Vacancies fell to their lowest level since 2000 in the last year, and 30-year Fixed Mortgage Rates are expected to average 4.4% in 2015 after hovering just below 4% in December. Because Price Increases in 2015 will be difficult, Proper Pricing will be key.