With high prices, home sales slow down in Palm Springs and the Coachella Valley

According to recent reports from California’s leading real estate organizations, as summer approaches, the city of Palm Springs and the Coachella Valley generally experience a slowdown in home sales. Despite some foreclosures shaking up the market and an initial increase in home sales at the beginning of 2024, the last three months have seen a clear decline, with sales approximately 20% below their usual levels.

Kevin Stern, a Palm Springs agent and president of Greater Palm Springs Realtors, provided a brief overview of the region’s real estate market, describing it as “slow and steady.” He noted that factors such as high interest rates and insufficient home construction have led to fewer sales transactions.

Despite the current sluggish sales, prices remain high. The average price of a single-family home in the Coachella Valley, although it fell from the record $724,523 in April to $710,000 in May, is still the second highest in history. Meanwhile, prices for condos and other attached homes also slightly decreased, from $500,000 in April to $494,000 in May.

Kevin Stern continues to explain that inventory is increasing, but this rise has not been enough to significantly lower prices. He states that high interest rates, with California lenders offering them around 7%, are a major factor in the slow market. Remember that rates were typically 3.5% to 4% before the pandemic and around 5% in mid-2022.

These high rates have kept many homes off the market, as owners prefer to stick with their low rates rather than face higher mortgage costs; they also deter potential buyers. Therefore, the increase in inventory may be due to owners deciding to move for lifestyle reasons despite the high rates, says Susan Marshall, a real estate agent in La Quinta and president of the California Desert Association of Realtors. She also believes that factors such as inflation and uncertainty from the upcoming elections have helped slow the market.

In light of all this, Mr. Stern advises: “If you want to buy a house now at 7.5% or 7.25%, do it, you can refinance it later, as waiting for rates to drop will mean more competition and higher prices.”

Available Foreclosures: 

Palm Springs: 15 homes available 

Coachella Valley: 25 homes available.

By Elías DaSilva | 28 de octubre de 2024.