Coachella Valley Real Estate Market Update – COVID-19 & Coronavirus
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. Yesterday CAR (California Association of Realtors) clarified that REALTORS® should cease doing all face-to-face marketing or sales activities, including showings, listing appointments, open houses etc. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person. With this new directive, we have notified all of our occupied listings that their home cannot be shown at this time. Believe it or not, there are still buyers in need of homes. To continue to help provide service to our listings and facilitate sales for buyers, we are sending previously shot video walk-throughs to buyers or, in a lot of cases, live virtual walk-throughs with the help of our sellers!
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.
– Everyone at the Jelmberg Team.
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 heating 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
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 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.