Navigating a Complex Housing Market: The Real Estate Agent You Choose Matters!
MARCH 2023 HOUSING MARKET UPDATE | GREATER PALM SPRINGS AREA
The current housing market has continued to adjust to a more normal, more balanced market. These adjustments have been shaped by higher interest rates, resulting in lower demand and a gap between seller and buyer expectations. This is why, more than ever before, having a knowledgeable real estate professional on your side is paramount to getting the most out of this mixed housing market.
In February, the FED gave no indication that they were going to stop raising the FED fund rate, which negatively impacted the bond market, translating to further mortgage rate hikes. However, mortgage rates are down about ½% since the end of February due to inflation easing and in reaction to fears of a banking crisis. This has resulted in some frustration for buyers who are payment sensitive. However, by choosing the right professional who is experienced with negotiating price adjustments and employing strategies like Interest Rate Buydowns, most buyers will still find it a fine time to buy.
Sellers have also needed to take into account these market conditions. The latest Desert Housing Report from the California Desert Association of Realtors reports an expected seasonal increase in home prices to $681,780 (an 8.2% increase year over year). Units sold were down 33% year over year. However, this metric tends to lag as most homes take 30 plus days to close escrow, resulting in the seasonal increase showing at a later date. “Days in the Market” increased with the average days on the market jumping to 49. This is much closer to pre-pandemic levels where homes averaged 65 days on the market. With the average days on the market increasing, and the number of total sales decreasing, hiring a true professional that will help guide sellers and market their home to maximize sale price has never been more important.
For sellers, choosing a real estate professional that will provide top quality service with high quality photography, strategic negotiation skills and the ability to reel in buyers is integral to a listing’s success. The Jelmberg Team is leading the charge representing more resale clients than any other real estate team in the area with 240 transactions in 2022. If you are curious what your home is worth in the current market conditions or want to learn more about how buying down your interest rate can make your home purchase more affordable, reach out to one of our experienced agents. We’d love to help you!
Source: The Desert Housing Report Produced for Valley agents through the sponsorship and cooperation of GPSR and CDAR by Market Watch LLC ©2023 CDAR & GPSR. All rights reserved. Use and distribution by members only.
2 BIG Items for Navigating Housing Market in 2023: Interest Rates Buydowns, and Buyer Leverage
California Desert Association of Realtors (CDAR) statistics from January 2023 have painted a picture of what buying a home in early 2023 looks like. We have seen a steady stream of seasonal buyers and buyers coming back to the desert. The story for these buyers are affected by increased inventory, decreased buyer activity and interest rates.
Firstly, inventory has increased while monthly sales have decreased, allowing buyers previously deterred by getting outbid in the mad rush to purchase homes from 2020 to 2022 are now cautiously returning to search for homes. Secondly, interest rates returning to levels around 6% (as previously seen in the early 2000s) have led smart buyers to request sellers buydown their interest rates making their monthly payment more affordable. Thirdly, leverage for buyers has returned. With the homes sitting longer on the market, sellers have been willing to concede more concessions to buyers.
These market factors of inventory, interest rates and buyer leverage have shaped the landscape of deals in the Coachella Valley and the Jelmberg Real Estate Professionals help our clients navigate these factors to make the ever-elusive win-win deal a reality for both buyers and sellers.
So, what can do we help you navigate these market conditions?
1. INTEREST RATE BUYDOWNS
With up to 3 times the impact on monthly mortgage payments when compared to lowering the sale price of a home, interest rate buydowns are often the perfect tool to both increase affordability for buyers and help sellers lock in a deal.
Many recent deals have included the seller paying for the buyer’s buydowns and even agreeing to further concessions including paying for closing costs and lowering the sale price of their home. This is possible for sellers as the median home price rose 5.7% since the same time last year and a whopping 47.7% increase since April of 2020.
2. BUYER LEVERAGE – Make your home stand out from the crowd
January 2023 saw a significant increase in the “Months of Sales” ratio to 3.1. This is a jump toward a more balanced market for buyers and sellers. This 3.1 ratio measures supply versus demand and speaks to a slowing in the number of homes sold decreasing to 413 from historic averages (pre-pandemic) of 700 sales per month.
This means buyers have increased leverage to ask sellers for more concessions when entering a deal as sellers are seeing their homes sit on the market longer. As buyers have more choice, it is important for sellers to make their listing as attractive as possible. Ensuring that your listing’s photos, media, marketing and showing availability are all on point is paramount to a listing’s saleability. This is where our team of professionals at the Jelmberg Team can really help sellers maximize profitability with professional photography, 360 virtual tours, virtual staging, online marketing, and a database of over 40,000 potential buyers.
If you are interested in how our team can help you navigate the current market please contact your Jelmberg Team Real Estate Professional at jelmbergteam.com/agent and discover why our team has received over 220 five-star reviews!.
Just let us know how we can help with your real estate needs,
Enter your address below to find out what your home is currently worth:
That calculator is an estimate to get you started. If you’d like a more accurate home price estimation, please reach out to the Jelmberg Team agent you have been working with. Also, feel free to reach out if you have any questions about our shifting market.
Source: The Desert Housing Report Produced for Valley agents through the sponsorship and cooperation of GPSR and CDAR by Market Watch LLC ©2022 CDAR & GPSR. All rights reserved. Use and distribution by members only.
A Market Shift May Signal a Great Opportunity for Home Buyers While Sellers Still Making Significant Profits.
Published: 01/01/2023
The Coachella Valley housing market has started to shift toward a buyers’ market. With inventory approaching more normal levels, the Valley may offer some advantages to buyers while still being quite profitable for sellers.
Buyers Have Negotiating Power
Over the last 2 years home prices have skyrocketed due to low interest rates and a lack of inventory. These price increases pushed many buyers out of the market. On top of this, the recent interest rate hikes have soared close to 7%, further exacerbating the affordability for home buyers. However, a reprieve for buyers may be here now in 2023.
With inventory further normalizing to 2,140 units in the Coachella Valley and the California Desert Association of Realtors forecasting inventory in February to reach 2,500 units, sellers have been reducing prices and buyers now have negotiating power for seller concessions.
At the Jelmberg Team we have seen many of our buyers negotiating with the seller to “buy down” their interest rate to make their mortgage payment more affordable. In the example below our buyer’s agent negotiated both a $34,000 reduction in price and $13,000 to permanently buy down their interest rate on their loan from 5.99% to 3.99% in their first year and 4.99% for the remainder of their loan. With negotiating power like in this example this may prove to be a great opportunity for buyers to enter the housing market with the purchase of a home.
Sellers Still Have Plenty of Equity
So how is this good for home sellers? With buyers asking for more and home prices normalizing what is in it for sellers? Well, despite median home prices reducing to $649,000 in November (down 8.6% from the peak), median home prices from April of 2020 were only $440,000 (only 30 months ago). This is a 47.5% increase in just 30 months! This means most homeowners still have at least $200,000 in equity in homes purchased prior to April of 2020.
If you want to learn more about how buying down your interest rate can make your home purchase affordable, or are interested in how market conditions are affecting your home price, reach out to one of our experienced agents.
Coachella Valley Inching Towards More Balanced Real Estate Market
Published: 10/4/2022
Coachella Valley home prices have decreased for the second month in a row, further solidifying the Coachella Valley housing market’s shift to become more balanced. Median home prices have decreased 5.5% since August to $670k, but are still up over 15% year over year.
The number of home sales continues its normal seasonal dip, though we are still at levels well below last year’s sales numbers (32% fewer sales year over year), and approx. 25% fewer sales than pre-pandemic levels. All Coachella Valley cities and price ranges are experiencing this decline in sales at varying levels, with homes priced above $700,000 affected the least.
Coachella Valley inventory increased by 214 units, bringing the number of active homes to 1,807. This is over 920 more active homes than we saw this time last year, but still approx. 33% short of normal levels. Inventory numbers are still tracking to be in the 2,500 range at its height in the upcoming season (approx. 1,000 short of normal pre-pandemic levels).
Months of sales increased by 0.3 months to 2.2, and are significantly up year over year in every city and every price range, continuing its steady rise and moving much closer to be a more balanced market.
The number of homes sold Valley-wide above asking are down to 27% from well over 50% just a few months ago. It’s expected homes sold above asking will be at normal levels (10%) by the end of the year. Average days on market are also expected to get back to normal levels (50-60 days) in the very near future. Median days on the market are currently 32 days.
FED Rate Hikes
It seems the FED’s rate hikes have produced their desired effect to cool the market. Interest rates have settled around 7% from the recent rate increase earlier last month, though the sentiment industry wide is we could see rates drop significantly in the first half of 2023. Fannie Mae published a recent housing report indicating rates could fall below 5% in 2023.
All of this data points to a market here in the Valley that is shifting to become more balanced, though still in favor of sellers at this point. If inventory remains at, or close to current numbers (about 30% less than pre-pandemic levels), we can expect to see home prices stabilize, or continue to gradually increase through the season. We’ll be watching this closely along with the FED’s decision on an interest rate hike this fall and its actual effect on buyers in the Coachella Valley.
The Jelmberg Team had over $14 million in sales over the last two months and have been able to structure deals that are still favorable to our sellers, while helping to offset the rate increases for our buyers making it a win/win for both parties.
Contact the Jelmberg Team agent you have been working with for more information about how we are still able to meet our clients real estate goals in the current market.
Produced for Valley agents through the sponsorship and cooperation of GPSR and CDAR by Market Watch LLC
Coachella Valley Sale Price Drops For First Time In A Year: Market Continues To Normalize
Published: 9/9/2022
For the first time in twelve months and second time in the last two years Coachella Valley home prices have decreased. Median home prices dropped 4% in August to $682,000, but is still up over 17% from August 2021.
Though the number of home sales seems to be taking a normal seasonal dip, we had about 23% fewer sales in August than pre-pandemic levels. The lowest since the housing crash over a decade ago. All Coachella Valley cities are experiencing this decline in sales at varying levels.
Interestingly however, the sales decline has been limited to homes priced under $700k. Though the overall number of sales are down 31% from a year ago, homes priced above that $700k mark have still seen the number of sales increase year over year.
Valley inventory has plateaued the last several months after seeing a 3 to 4 month surge that brought the number of active homes to about 1,600. This is over 750 more active homes than we saw this time last year, but still about 30% short of normal levels. We should see a seasonal increase in inventory starting in October that would bring inventory to around 2,600 in February or March. Again, still about 1,000 short of what we normally see.
Months of sales has also plateaued (to 1.9), after seeing a steady 7 month increase, and is significantly up year over year in every city and every price range while the number of homes sold valley wide above asking is down 15% (to 36%). Still 25% more homes selling above ask then we had seen prior to 2020.
All of this data points to a market here in the Coachella Valley that is shifting to become more balanced, though still in favor of sellers at this point. If inventory remains at, or close to current numbers (about 30% less than pre-pandemic levels), we can expect to see home prices stabilize or continue to gradually increase through the season. We’ll be watching this closely along with the Federal Reserve’s decision on an interest rate hike this fall and its effect on buyers in the Coachella Valley.
Enter your address below to find out what your home is currently worth:
That calculator is an estimate to get you started. If you’d like a more accurate home price estimation, please reach out to the Jelmberg Team agent you have been working with. Also, feel free to reach out if you have any questions about our shifting market.
Just let us know how we can help with your real estate needs,
Coachella Valley Market Update June 2022
The market seems to be starting to reach peak home values. While home prices are still climbing nationally, the increased mortgage costs have also pushed some buyers out of the market. National home sales fell 2.7% in March, and mortgage applications dropped 5% in mid-April.
The main reason for this is the sharp rise in interest rates. They have hit an average of 5.35% nationally, a 2% increase from just a year ago. Interest rates may not affect you directly as a home seller, but as Lawrence Yun, chief economist at the National Association of Realtors, states, “Many buyers will be forced out of the market because of the hit to affordability from rising interest rates.” That could put a damper on the number of multiple-offer situations and lead to increased days on market.
However, it’s not all doom and gloom. Locally, while increased interest rates are causing a dip in buyer demand (23% less sales then this time last year), and the number of active homes are starting to rise. Despite the recent increase in the number of active homes the total inventory is still well below pre-pandemic levels by over 2,500 active listings. By the end of April, there were just 859 active units and now it looks like we will have over 1,100 to start June (still historically very low). This much needed inventory will allow home buyers entering the market more selection and may even curb rising prices.
As a result, median home prices in the Coachella Valley are still at an all time high ($670k). Zillow predicts that annual home price appreciation nationally will “continue to accelerate through the spring, peaking at 22% in May before gradually slowing to 17.8% by February 2023.” The increased mortgage rates will likely slow home price growth, but every major real estate firm still expects home prices to grow somewhat this year.
You may be wondering how inflation and our general economic situation play into this. While inflation is hitting the average consumer hard and some worry we may see a recession in 2023, the real estate market is expected to remain strong. Interest rates are slowing down buyer activity, but it likely won’t be enough to cause a crash.
In the lead-up to the crash of 2008, the real estate market had already experienced a significant downturn. That’s something we are not seeing today. Many are actually looking to the real estate market to lessen the impact of a possible recession in 2023.
Overall, it is still a fantastic market in which to sell your home. Prices have never been better, and while higher interest rates may make it harder to buy, there are plenty of strategies that can help you find a new home and make the whole process smoother.
The market projections are positive, but the future is still uncertain. This may be your last best chance to sell your home for top dollar before rates climb even more and price more buyers out of the market.
If you’re curious about what your home could sell for in today’s market, check out this home value calculator, which takes into account recent Coachella Valley sales:
Enter your address below to find out what your home is currently worth:
That calculator is an estimate to get you started. If you’d like a more accurate home price estimation, please reach out to the Jelmberg Team agent you have been working with. Also, feel free to reach out if you have any questions about our shifting market.
Just let us know how we can help with your real estate needs,
The Jelmberg Team
Coachella Valley Market Update March 2022
If you have read any of our market updates over the past 2-3 months, we asked our readers to keep an eye on the Fed’s plans to shrink its balance sheet and raise interest rates. The Fed taking action seemed like a forgone conclusion to battle rising inflation (now at levels we haven’t seen in forty years), the question was, and remains, how high and how fast would they take rates?
In December of 2021, we mentioned The Federal Reserve announced that it is “open” to speeding up the end of their bond buying program and are signaling that interest rate hikes are coming in 2022.
In January we told our readers it looks like the Fed will be taking action faster and sooner than anticipated. It was thought the Fed would raise rates by a quarter percent three times in 2022, but in meeting minutes from their December meeting they indicated they could raise rates sooner, and at a faster pace than previously thought to fight inflation –perhaps beginning in March.
Rates are moving in a big way, but still very favorable to buyers. As of today (February 15th) the average conforming 30 year fixed rate nationally is just under 4% (as low as 3.625% on jumbo loans up to $1.5M), and has increased approximately 25% in the last 90 days. It’s hard to know exactly what to expect in the coming months as some policy makers are calling for swifter and more aggressive hikes like St. Louis Fed President James Bullard who would like to see a 1% hike by July 1st, which would likely mean a .5% increase in March, and .25% increases in May and June. Centrists among the top Fed officials appear skeptical of raising rates so aggressively and seem to be content with the three .25% increases in 2022 that had previously been discussed. Even if the Fed takes a more aggressive path, it will take more than interest rates increasing to 5-5.5% to slow our Housing market in the Coachella Valley in any kind of significant way.
However, if significant increases in rates were coupled with the Fed aggressively tightening monetary policy, we could see this impacting buyer demand more significantly. I read a Rueter’s article recently that indicated the analysts at Bank of America estimate that the Fed’s balance sheet will shrink to 31% of GDP by the end of this year from 36% currently, while the European Central Bank’s will shrink to 56% of GDP from 69% currently. If they are right it could represent liquidity drains of up to $1.5 trillion and $2 trillion, respectively. These are huge numbers that could put a massive strain on the stock market, which could also affect buyer demand in the valley. The last time the Fed used these tools together was in 2018, when the stock market swung 20% from it’s high to low that year.
The Fed’s intentions moving forward here will be something we continue to keep a close eye on.
In the meantime, the valley’s real estate market yearns for that seasonal bump in inventory that just hasn’t materialized. The number of sales in January was down 17% from last January due to lack of inventory, but still approximately 23% higher than pre-pandemic levels. Multiple offer situations, with accepted offers at or above ask are the norm, especially in Palm Springs, Indio and Cathedral City (Avg. 1.5%,1.1% & 1.0% above ask).
Whether you are a seller or a buyer, there is still a great opportunity for you in this market. Let us help you navigate it. The Jelmberg Team has already helped 43 buyers and 31 sellers meet their real estate needs in the first two and a half months of 2022.
Reach out to a Jelmberg Team Real Estate Professional for more market information, or to see how much you can benefit from recent market trends on the sale of your home.
Graphs and statistics for this article are produced for Valley agents through the sponsorship and cooperation of PSRAR and CDAR by Market Watch LLC
©2021 CDAR & PSRAR. All rights reserved. Use and distribution by members only.
Coachella Valley Market Update February 2022
Published January 25, 2022
Here we go! The start of the season for real estate has begun in the Coachella Valley and the market is sailing further into uncharted waters. We continue to experience unprecedented market conditions in the Coachella Valley, as the median sales price ended the year at $615K, which was a yearly increase of over 18%.
The number of sales continues to trail last year’s totals, and are down in every city except Coachella, Bermuda Dunes and Desert Hot Springs in the month of December. But, the number of sales are still significantly higher than pre-pandemic levels.
In fact, the reason the number of sales has been trending down year over year is due to the lack of inventory, not lack of demand from buyers, as inventory is at the lowest number on record for the valley in December at 607 active homes. That’s 900 units less than last year and almost 2,400 units less than this time in 2020. Astonishingly, we continue to see this record breaking low inventory during a time CDAR has described as “historically, the strongest three months of inventory increases,” the Coachella Valley has seen. Incredible.
Tangibly, this data continues to translate to many multiple offer situations with homes selling at or above asking price.
It will be interesting to see how inventory trends the first quarter of 2022 as the normal seasonal uptick in listings hasn’t really been felt since 2019. Keep an eye on that.
Another development we are following closely is the Fed’s plan with interest rates, as it looks like the Fed will be taking action faster and sooner than anticipated. It was thought the Fed would raise rates by a quarter percent three times in 2022, but in meeting minutes from their December meeting they indicated they could raise rates sooner, and at a faster pace than previously thought to fight inflation. Perhaps beginning in March. This could have an effect on our market once we see rates edge closer to that 4% benchmark.
Whether you are a seller or a buyer, there is still a great opportunity for you in this market. Let us help you navigate it.
Please feel free to reach out to a Jelmberg Team Real Estate Professional for more market information, or to see how much you can benefit from recent market trends on the sale of your home.
Sources:
https://www.cnbc.com/2021/12/10/fed-is-expected-to-speed-up-end-of-bond-buying-and-signal-interest-rate-hikes-are-coming.html
https://journal.firsttuesday.us/new-construction-drops-heading-into-q4-2021/80707
The Desert Housing Report Produced for Valley agents through the sponsorship and cooperation of GPSR and CDAR by Market Watch LLC ©2022 CDAR & GPSR. All rights reserved. Use and distribution by members only.
Coachella Valley Market Update January 2022
Published December 20, 2021
As we enter the new year the statistics on the explosive housing market in 2021 have all shown a real estate demand in the Coachella Valley is bursting at the seams with surging home prices and an ever-dwindling supply of homes reaching record lows. With the median home price pushing up to $615,000 the Coachella Valley has shown no direct signs of slowing down in the near future. While “rising waters raise all ships,” some areas and price points in the Desert have seen slightly more drastic increases in prices than other areas. However, there are larger national economic factors that could plateau or even show a slight decrease in record high home prices. Overall, the burgeoning Coachella Valley real estate market has seen some of the most interesting and stunning changes in 2021.
Demand has been the major story in real estate in 2021. While demand across the US has increased dramatically driven by low interest rates, the demand in the Coachella Valley has increased as more and more people are searching for homes in tertiary markets. At the same time, there has been a California-wide shortage of new home starts signaling the perfect storm for historic price increases. However, some cities in the Coachella Valley fared better than others. Bermuda Dunes saw a 44.4% increase in 12 months and a 223% increase since the low prices seen in the 2011-2012 season. While Rancho Mirage, for example, saw a monstrous increase of 32.3% year over year, this increase still only ranks them the fourth highest increase in the Desert. These never before seen price jumps are a direct result of the demand increase.
There is no question that the real estate industry is experiencing a historic boom. However, the one question that lingers in the minds of investors, the public, and real estate professionals is “how long can it last?”. While there are no direct signs of a slowdown, an interest rate increase could change the current real estate market landscape. In December of 2021, The Federal Reserve announced that it is “open” to speed up the end of their bond buying program and are signaling that interest rate hikes are coming in 2022. As real estate buyers are some of the most sensitive direct client markets to interest rates, this could spell an end to the huge price increases and possibly even mark a slight decrease in home prices in the US. Despite this being on the horizon market forecasters are not predicting a major market crash, just a plateau or a price adjustment.
If you want more information regarding current market trends in your area, please reach out to a Jelmberg Team Real Estate Professional by visiting jelmbergteam.com/agents today!
Sources:
https://www.cnbc.com/2021/12/10/fed-is-expected-to-speed-up-end-of-bond-buying-and-signal-interest-rate-hikes-are-coming.html
https://journal.firsttuesday.us/new-construction-drops-heading-into-q4-2021/80707
The Desert Housing Report Produced for Valley agents through the sponsorship and cooperation of GPSR and CDAR by Market Watch LLC ©2022 CDAR & GPSR. All rights reserved. Use and distribution by members only.
Real Estate Market Update | Coachella Valley
Published November 9, 2021
As we welcome back snowbirds to the valley and prepare for the upcoming holiday season, buyers, sellers and Realtors alike are watching, with great anticipation, what the coming months have in store for the Coachella Valley housing market. Real Estate professionals are paying especially close attention to the valley’s inventory levels, as the lack of inventory continues to keep prices at unprecedented levels (median sales price is currently $600,000).
Inventory is still less than half of what it was a year ago (915 vs. 2,014), and less than a third of what it was in October of 2019 (3,010). Are we going to see the explosion of listings that those in the Real Estate industry have been clamoring for? Or, will we see the normal seasonal increase in listings that would get us just above a thousand? Either way, it’s going to be an interesting season.
The other current housing market stats remain pretty consistent. Median months of sales remain just under 1.0 (under 3.0 would indicate a sellers market), and the average discount rate is at a premium of 1.1%, meaning the average home is selling for 1.1% above list price. Average total number of sales are down 28% from a year ago (806 vs. 1,120), but still higher than what we experienced years prior. In fact, the number of sales has decreased year over year in every price point except homes above $1 Million. The largest decrease in the number of sale was in homes priced under $400k.
Needless to say, we still find ourselves in a sellers market with the majority of homes selling over asking price, and in many cases with multiple offers. If you are curious what your home is worth in this current market, reach out and we can show you how we have been able to help 117 sellers in 2021 net the most for their property, in the least amount of time.
Also, it’s still a great time for buyers to take advantage of historically low interest rates. This year alone, the Jelmberg Team has helped 179 buyers navigate this historic market and meet their real estate goals.
Graphs and statistics for this article are produced for Valley agents through the sponsorship and cooperation of PSRAR and CDAR by Market Watch LLC
©2021 CDAR & PSRAR. All rights reserved. Use and distribution by members only.
The Market Isn’t Going To Crash!
Published on July 6, 2021
Here are three reasons why the market won’t crash but could slow down soon.
Want to Buy a Home? Search All Homes
Want to Sell a Home? Receive a Home Value Report
In early April, Google reported that the question, “When is the housing market going to crash?” had spiked 2,450% within 30 days. “Why is the market so hot?” searches had doubled in just a week, and “How much over asking price should we offer on a home in 2021?” jumped 350% in that same week. So is the housing market headed for a crash this summer? Here are three reasons why we don’t think so:
1. Qualified buyers. One of the main differences between 2008 (when the market crashed) and the condition of the current market is loan standards. Foreclosure filings were at a 15-year low in February of 2020 before the pandemic and have continued to decrease.
2. Down payments. The average down payment in 2007 was 9%, but the typical current down payment is 15.9%. 45% of first-time homebuyers financed 100% of their home in 2007, while just 17% did so in 2020.
3. Adjustable-rate mortgages. In 2007, 15% of all mortgages were adjustable or fixed then adjustable. In 2020, only 4% were adjustable.
“We can expect the Coachella Valley housing market to remain strong into the foreseeable future.”
With all this in mind, we think there are a couple of factors that could slow the current market:
- An interest rate increase. A significant increase in interest rates that would get us over that 4% or 5% mark could impact the market, but it just doesn’t seem like the Fed has plans for this anytime soon.
- Foreclosures. As of March, about 70% of all homeowners still in forbearance are not making any payments. The worst-case scenario is that about 2.9% of all mortgage borrowers could end up in delinquency. The serious delinquency rate could go from 0.9% to 3.8%. That’s still much lower than the 6.3% rate seen in 2010, but it would slow the market.
The good news is that once these forbearance programs start to wind down, it seems that with low interest rates and low inventory, we can expect the Coachella Valley housing market to remain strong into the foreseeable future. Please reach out to the agent on our team you’ve been working with if you have any questions.
For more information on how the Coachella Valley Market has skyrocketed recently visit the link below:
Published on May 15, 2021
2021 Coachella Valley Home Prices in April 2021 Continue a Rising Trend
There is no doubt, home prices are swelling. Market-watchers are seeing a nearly unprecedented surge in home prices. This surge is exemplified by the median sale price in the Coachella Valley increasing in April to a massive $559,750, up from $440,000 last April. Valleywide, homes are selling in an average of 34 days, and the average 30-year fixed-rate mortgage is near a record low. Though things currently feel a bit hectic, the market will adjust to the natural ebb and flow of typical economic cycles.
Prices aren’t expected to fall anytime soon, and years of under-building means that the country is facing a serious housing shortage. Total home supply shrunk 28.2% from a year ago, according to the National Association of Realtors. Growing demand and diminished supply make a perfect combination for escalating prices.
Now more than ever, the market is very lopsided in favor of sellers. For example, our team alone has a backlog of vetted and pre-qualified buyers looking for a home in a Del Webb 55+ community. Here is a comprehensive breakdown of our buyers who are currently searching for a home in Del Webb Rancho Mirage, Sun City Palm Desert or Sun City Shadow Hills:
JELMBERG TEAM’S BUYERS FOR HOMES IN A DEL WEBB COMMUNITY:
| Under 1,500 SQFT | 1,500 – 2,000 SQFT | 2,000 – 2,500 SQFT | Over 2,500 SQFT |
|---|---|---|---|
| 51 | 62 | 46 | 26 |
However, sellers should be cautious about pricing their homes too high because buyers still won’t pay for a property that’s majorly overpriced.
So what should you do when you receive multiple offers for your property?
Here are the three factors you should consider when comparing offers:
- Payment Method. Cash is king, and paying in cash allows buyers to waive the appraisal, which is great for sellers. However, if you’re confident in the buyer’s lender and their mortgage approval, there’s not much risk in taking an offer from a buyer with a loan. Also remember that local lenders are often more accessible on nights and weekends, which can be crucial in this fast-paced market.
- Contingencies. These days, sellers are in the position to ask for as few contingencies as possible. Many buyers are waiving home inspections right now and are finding ways to waive home appraisal contingencies.
- Compare apples to apples. The best way to compare offers is to lay them side by side. A good strategy is to create a spreadsheet with all the essential information to make comparisons simple.
Ultimately, it’s an excellent time to be a seller as long as you have an experienced real estate agent to guide you through today’s sometimes chaotic market.
If you’d like to speak to me about what you can net from the sale of your home, or any other real estate matter, please call me at 760-FOR-SALE.
Published on March 25, 2021
UPDATE: Spring home sales haven’t let up
In 2021 there has been a flurry of change in national news and the macroeconomic front. Despite these changes, the housing market seems to have not missed a step in keeping pace with the unprecedented sales numbers from the end of 2020.
Locally, the median sale price ended 2020 at $520K in the valley, up 22% YoY (Year over Year) and the number of units sold in 2020 was up 13% (YoY), with the biggest increases in units sold above the $600K price point.
Inventory remains at historic lows starting 2021 with over 50% less inventory than January of 2020, with the inventory retraction essentially even across price ranges.
The increase in units sold and drastic decrease in available inventory has created a month of sales ratio at 1.4 months (historically low levels), and as you might expect, multiple offer situations and bidding wars. As of December 2020, 1 in 5 homes were selling above list price.
While the huge price increases and multiple offer situations are certainly prominent aspects of our current market, the interesting story is the decrease in new listings (down 8% YoY in 2020), especially in the lower price points.
Desert Hot Springs, Coachella, Cathedral City
Over 25% decrease in new listings.
Indio, Bermuda Dunes
Over 10% decrease in new listings.
Palm Desert, La Quinta, Palm Springs, Indian Wells, Rancho Mirage
Under 4% decrease in new listings.
Is the decrease in new listings due to potential sellers not wanting unnecessary exposure to COVID? Hard to tell, but this could be the case. As more residents of the Coachella Valley have received their vaccine, and we move closer to a more normal way of life, we could see an uptick in the number of new listings.
So, what can you do as a homeowner or buyer to fully leverage this crazy-hot market?
The truth is if you want into this market you need to find a professional well versed in how to navigate it. At The Jelmberg Team, we understand this market and have the processes in place to maximize our clients’ interests and do it safely.
Buyers:
Though some buyers may be deterred by interest rates ratcheting up a bit, many more are rushing to lock in affordable monthly payments while they still can. However, actually finding and getting an offer accepted has never been more challenging than right now in the Coachella Valley. Lean on an experienced real estate agent to make the best offer for you and be prepared to offer over list price.
Sellers:
For sellers, the number of listings could increase markedly over the next few months. If you have thought about selling your home, now may be the best time to beat a potential influx of homes on the market and maximize your net proceeds.
If you’ve even been entertaining the idea of selling your home this year, I invite you to follow the link below to instantly calculate your home’s value in today’s market based on recent Coachella Valley sales:
Enter your address here to find out what your home is currently worth
The Jelmberg Team was founded on the principle of being leaders and innovators in our industry by pioneering ways to use technology to create seamless experiences for both buyers and sellers. This continuous endeavor has prepared us for this time; our systems, structure, services, and marketing techniques were built to help our clients and our agents thrive in this virtual environment. We have closed over $95 million in sales in the last 8 months alone.
If you have any questions about real estate, please reach out to your Jelmberg Team Agent.
—
Published on July 1, 2020
UPDATE: There’s an unexpected outcome of the pandemic shutdown
Home prices are surging right now in the Coachella Valley.
In January 2020, it looked like we were in for a solid year. Inventory had been steadily decreasing in the Coachella Valley for several years, while home prices have seen 75% – 200% appreciation (depending on what city you live in) since the lows of 2011.
The Jelmberg Team had 55 homes closed or in escrow during the first two and a half months of the year ($20.6MM in volume). The market was strong.
We obviously hit some bumps in the road in the middle of March, but the market seems to have weathered the storm and unexpectedly come out the other side stronger. Nationally, in the month of April, more than 41% of homes on the market faced a bidding war, and home prices rose 7.4% year-over-year to reach a new record high. Locally, the valley has seen a 2.3% price increase year over year (as of the end of May) and we will likely continue to see home values appreciate for the foreseeable future. Our team has experienced a flurry of activity in the month of June with 21 sides ($9.3MM) in escrow since June 1.
What explains such an active market in the time of a pandemic? There are three reasons:
First, buyers are rushing back into the market. Social distancing restrictions are loosening. Folks who were hoping to buy a new home during the spring peak season can finally do so.
Also, due to quarantine, some people are re-evaluating their current homes more carefully and possibly looking to buy a home with more space.
Second, we currently have record-low mortgage rates. For homebuyers, this makes it a particularly attractive time to get into the market.
Third, there is very little inventory. Nationally, the number of homes on the market dropped by almost 20% in April, making this the lowest April inventory of homes for sale on record. Locally, inventory is still down 20% from this time a year ago, while average days on market have decreased 10 days to 54. The discount rate is also down to 2%. One of the most telling stats to keep an eye on is the absorption rate which has dropped to 3.7. This represents the months of inventory the market currently has (less than 6 months of inventory indicates a seller’s market).
So there you have it: tremendous demand for homes and very limited supply. The upshot is that we will continue to see home prices rise.
What does this mean for you?
Simply put, if you’re looking to sell your home, it’s a great time to do so. If you were to list your home in the current market, and price it correctly, you could sell it quickly and for top dollar.
In case you’re curious how much your home is worth in the current hot market, take a look at the following home value calculator, which is based on recent Coachella Valley sales or call the agent you are working with for a more accurate home evaluation:
Enter your address here to find out what your home is currently worth
If you’re looking to buy a home, the good news is that several beautiful homes just came on the market. If you’d like to see them, take a look at this complete listing of valley homes for sale:
Click here for all available Coachella Valley area homes for sale
Finally, if you have any questions, whether you’re thinking of buying or selling, give the agent you are working with a call. Market conditions are changing very quickly these days. We have our finger on the pulse of the Coachella Valley market, and our team is here to help.
—
—
March 28, 2020
UPDATE: Real Estate is an Essential Service
On Friday, March 28, 2020, California Gov. Gavin Newsom Announced that real estate inspections and showing are an essential service. This allows for buyers in-person showing/inspection of homes by the State of California during the stay at home order. While this is great news for both home buyers and home sellers, at the Jelmberg Team we will only do in-person showings only if necessary, and if a showing is deemed necessary, we will take every precaution possible to ensure a safe and clean showing.
For more details on this announcement visit this link to the California Association of Realtors (CAR) notice on this change:
https://www.car.org/en/aboutus/mediacenter/news/essentialservice?src=redalert
How Has COVID-19 / Coronavirus Affected Real Estate in the Coachella Valley?
March 23, 2020
As the world nervously watches the spread of COVID-19 (or Coronavirus), the pandemic has begun prompting responses from every industry, and nearly every level of organization in the country. Professional sporting events, concerts, and even political campaigning have been impacted. How then, has COVID-19 affected the real estate market, especially as we enter what was primed to be an especially hot spring for real estate?
Lawrence Yu, chief economist for the National Association of Realtors, had anticipated about 5.5 million sales of previously owned homes this year (an increase from 2019 and 2018).
That’s because borrowing costs had plunged to lows not seen since 2012/2013 (e.g., an average interest rate of 3.29% on a 30-year fixed-rate mortgage) and the job market was strong. Obviously, though, no one could have foreseen a virus disrupting market conditions at the start of 2020.
But just how disruptive has it been so far?
Thursday, March 19th, evening Governor Newsom and the State Public Health Officer issued Executive Order N-33-20 requiring all Californians to stay home except as needed to maintain continuity of operations in 16 infrastructure sectors. UPDATE – Real estate has now been deemed an essential business as of March 28, 2020 allowing for real estate agents to do limited face to face meetings. For more details on this announcement visit this link to the California Association of Realtors (CAR) notice on this change: https://www.car.org/en/aboutus/mediacenter/news/essentialservice?src=redalert or see update above.
There is still a need to buy and sell homes. Even the day prior to the new mandate, our listings were being shown regularly, we had two agents showing/video touring property (prior to the Governor’s stay home order) and we opened a new escrow. We had a home go into escrow last weekend, and we have 4 new listings going active in the next couple of days. Though the volume of buyers we would expect to see this time of year is obviously significantly lower, there are still buyers out there that have a legitimate need for a home.
We did see 2-3 escrows cancel initially due to the state of the nation, but we have 22 other current escrows that are solid. The biggest issues we are working with right now are logistical in nature due to the US/Canadian border being shut down. Currently, all the functions needed to get a home closed are available to us. Escrow, title, and the recorder’s office remain open.
The message we have for our clients right now is there are still buyers with need and the conditions that make for a fantastic market for both buyers and sellers still exist—crazy low rates and sellers with lots of equity in their homes (home values have increased for 9 years straight). Though we will likely see the US economy as a whole take a hit, a spike in unemployment, a short term drop in sales and sale prices, the real estate market will likely rebound quickly as it will be considered one of the safer investments during this time.
Ultimately, you have to determine what’s right for you as a home buyer or home seller. If you have a need to purchase or sell a home, we’d be happy to offer you a virtual consultation in lieu of meeting in person. We can discuss your specific needs in detail and show you how we are adapting our marketing to get the most exposure for our sellers at this time. Or we can provide you with a virtual tour, or live video walk through of homes you may be interested in.
Otherwise, please stay home and take care of yourself and your family. Reach out to us if you have questions and we will continue to provide you with the most up-to-date information possible, with hyper-local context that may be lost in the national media coverage.
We will get through this!
Lastly, it’s important that we listen to the medical professionals who are bearing the brunt of this, working hard to treat the infected, and developing a vaccine. We must all do our part to slow the progression. Hopefully, by now, you’ve heard these protocols, but it never hurts to reiterate them:
- Wash your hands with soap for at least 20 seconds, especially after having been in a public space or after coughing, sneezing, or blowing your nose.
- If COVID-19 is active in your area, put over 6 feet of distance between yourself and other people.
- Avoid public areas unless absolutely necessary, especially if you are over 65 and/or at a higher risk of getting sick.
- Stay at home if you’re sick and reach out to your primary physician.
Regards,
– Everyone at the Jelmberg Team.
Visit this page often to see the change in the Coachella Valley real estate trends.
–
SEE HISTORICAL / PREVIOUS MONTHS POST BELOW:
Published on: March 1, 2020
The Real Estate Market In The Coachella Valley Is Heating Up!
The Coachella Valley real estate market is trending up! Over the 2019 and early 2020 there has been significant improvements to loan limits, interest rates and the economy making for the perfect storm for housing prices to increase. However, the now distant memory of the financial crisis of 2008 and 2009 still causes anxiety for some looking to enter the real estate market again. Despite this seemingly prudent fear, this time a seems to be different for a number of reasons. Adding to this optimism for the Coachella Valley’s real estate market is the reduction in housing starts state-wide and the allure of the Desert’s competitive value for home buyers.
This Time Americans Have Less Debt
More importantly, unlike the previous housing boom, the personal household debt for most Americans is much lower. Despite attention grabbing headlines like “Household Debt Tops $14 Trillion,” however, when adjusting for inflation household debt is much lower than in 2008. According to Market Watch, Inc. personal debt ratios are much healthier than the dark days of 2008 and 2009 during the Great Recession. Adjusting for inflation, since the peak of 2008 debt levels are down nearly 19% and since bottoming out nearly seven years ago real per capita debts are up just 4.5%.
Also, the percent of disposable income needed to service household debt is the lowest since the 1970s and foreclosures are the lowest on record. According to the Federal Reserve, it takes an average of 9.9% of disposable income to service debts, down 13.2% since 2008. Taking into account the personal debt levels and the ability of consumers to pay off debt, at this point, household debt seems to be an unlikely trigger for another recession and Americans should be more capable of weathering an economic slow down.
Interest Rates, Loan Limits and a Roaring Economy
that 2020 could be a great year for real estate. First on the list was the economy. Bloomberg Economics forecasted that the U.S. economy will grow 2% in 2020 as the record-length expansion turns 11 years old in June. Real incomes are rising, and unemployment is at a 50-year low. Also, the stock market finished 2019 at all time highs with the DOW Jones Industrial Average hitting 28,462 and the S&P 500 reaching 3,230 in December of 2019.*
Secondly, interest rates are almost at 2012 lows. Interest rates decreased to well under 4% in the 4th quarter of 2019, almost reaching 2012 levels, with no indications of rate increases in the near future.
Lastly, The Federal Housing Finance Agency (FHA) announced in November that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000 in most
Couple the household debt statistics with the strength of the U.S. economy, record low interest rate and an increase on FHA loans and the result is stellar great news for both buyers and sellers!
The Coachella Valley’s Value to Buyers
In January of 2020 the median sale price of a home in Los Angeles has plateaued at the whopping $689,950. Comparing this to the Coachella Valley with a median home price at around $375,000 the opportunity for Angelino’s seems apparent! This discrepancy in prices along with Baby Boomers looking more than ever to retire makes the Desert a very attractive option for buyers from LA and other high priced cities in California.
This boon in the comparative value for homes in the Desert has our team of real estate professionals working to capacity. Now consider in addition to value the Desert offers buyers, the roaring economy, loan limits increases, reasonable household debt levels, a shortage in housing in California makes the outlook for the Coachella Valley residential resales seems unstoppable in 2020.
*correction in stock market figures from previous market update on February 1, 2020
3 Reasons to Expect a Hot Real Estate Market in 2020
Published on: February 1, 2020
See Coachella Valley Market Trend Graphs
The Coachella Valley Real Estate Market has been strong in 2019 and we expect this trend to continue into 2020. Despite the looming election in 2020 we feel that there is strong evidence that this will have a marginal effect on real estate trends in the Coachella Valley market.
Here we go, the start of another election year. Every four years there can tend to be a sense of uneasiness leading up to the presidential election. Rightfully so as the policy gaps between the two major parties seems to be at their greatest in recent memory. By now, the country has a pretty good understanding of what it can expect from our president, while the candidates that hope to unseat him are running with far different ideas of how the country should be lead. Regardless of your party affiliation, there is plenty of opportunity to allow election anxiety to creep in.
Couple the election year with the many other important topics that will likely affect us this coming year (from a China trade deal, and Brexit, to our foreign policy with North Korea and Iran), and it’s understandable how the uncertainty could potentially create some tension and doubt about making any major decisions in the near future.
How will the upcoming presidential election affect the real estate market? Opinions differ among real estate professionals, but we feel very comfortable that 2020 will be another fantastic year for residential real estate sales in the Coachella Valley. Here are the three reasons why:
- The Economy is Very Strong: Bloomberg Economics is forecasting that the U.S. economy will grow 2% in 2020 as the record-length expansion turns 11 years old in June. Real incomes are rising, and unemployment is at a 50-year low, as we experience the longest period of continuous economic growth since 1854. The stock market finished 2019 at all time highs (over 32,000) with experts expecting it to go to 40,000 in the next 36 – 60 months. The US economy is showing no signs of slowing down in the next 12 months.
- Interest Rates: Almost Hitting 2012 Lows: Interest rates decreased to well under 4% in the 4th quarter of 2019, almost reaching 2012 levels, with no indications of rate increases in the near future.
- Conforming Loan Limit Increase: The Federal Housing Finance Agency (FHA) announced in November that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000 in most of the U.S., up from 2019’s level to $484,350.
The extra money in buyers accounts, teamed with interest rates near record lows and a conforming loan limit increase creates a perfect storm for buyers and sellers. Buyers should feel more comfortable to make a purchase and are able to afford homes at a higher price point, while sellers should be looking for inventory to creep down and home prices to inch up as more buyers enter the market. The stage is set for a very active year in residential real estate in the Coachella Valley cities.
Coachella Valley Real Estate Market Graphs and Stats:
The statistics and graphs below outline the Coachella Valley Market performance over the past 15 plus years.
The graph below shows the healthy growth in median sale price and a steady number of homes sold each year since 2011.
Since 2006 the Coachella Valley has seen steady gains in median sale price. The graph below shows this steady growth.
The Jelmberg Team finished 2019 with $74 million in sales, leading the entire Coachella Valley in closed units (194). This is a record for our team in both volume and transactions. We expect 2020 to be an outstanding year for the community and our team.
The Jelmberg Real Estate Team are Your Local Experts!
The Jelmberg Team has complied this data for the residents and prospective buyers or renters in the Coachella Valley. If you would like assistance in determining the market value or a listing price for your home please contact a Jelmberg Team real estate agent – here. If you are looking to purchase a Coachella Valley home for sale our expert agents have the local knowledge needed to find you the perfect home to fit any lifestyle or need.
Published on October 2, 2019
Coachella Valley & National Real Estate Market Update
Changes in the MLS in the Coachella Valley
There were big changes for Realtor’s in the Desert this summer. Both the Desert Area and Palm Springs Associations of Realtors have changed their MLS provider to FLEXMLS. Hopefully you haven’t noticed this change in the way you search property values or your home search.
Initially, the transition created some problems with how listings were being syndicated across the web. Our marketing team has been working diligently with all parties involved to insure jelmbergteam.com has the most accurate listing information in the Coachella Valley. Our team and our clients are so thankful for their efforts and are reaping the benefits.
Despite these changes in the MLS we wanted to highlight some interesting trends nationally and show how these trends may have contributed to the sky-rocketing numbers for the Jelmberg Team during the summer of 2019.
National Real Estate Trends in 2019
September 3rd CoreLogic®, a leading global property information and analytics provider, released their CoreLogic Home Price Index (HPI™) and HPI Forecast™ for July 2019, which shows home prices rose both year over year and month over month. Home prices increased nationally by 3.6% from June 2018. On a month-over-month basis, prices increased by 0.5% in July 2019.
Home prices continue to increase on an annual basis with the CoreLogic HPI Forecast indicating annual price growth will increase by 5.4% by July 2020. On a month-over-month basis, the forecast calls for home prices to increase by 0.4% from July 2019 to August 2019. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
Source: www.corelogic.com/news/corelogic-reports-july
Local Outlook
The Jelmberg Team had its best summer ever! Our sales volume (from May to August) grew over 40% to approx. $20.8MM (representing 28 buyers and 32 sellers). Our top four months in sales volume this year are March ($10.25MM), January ($6.8MM) and ……. wait for it… June ($6.4MM) & July ($6.3MM). We also had no shortage of sellers, as the team listed 39 homes during this time (also an all-time record for us).
We have noticed over the last 3 years that the traditional seasonality the market has experienced is gradually having less influence on home sales. We anticipate this trend to continue, and believe the strong sales numbers in June, July and August to continue into the 3rd quarter of 2019.
