Bolstered by a strong December that saw home sales hit their highest mark in six months, Coachella Valley real estate professionals are seeing signs of improvement and hoping for a rebound in 2007. In the past six weeks or so, those in the key real estate industry say they’ve seen buyer and seller activity increasing and falling in line with the valley’s more traditional, seasonal pace. That comes after the cadence went topsy-turvy during recent real estate boom years, especially in 2004 and 2005.
A report issued Monday shows home sales tumbled 27 percent in the valley in December compared with year-ago figures. But there were several positives:
- Sales in December increased about 22 percent vs. November 2006 when 717 homes sold.
- The 874 homes sold in December was the highest mark since June, according to La Jolla-based real estate research firm DataQuick Information Systems.
- The December median home price posted a 4 percent increase to $406,000.
- That put the median home price at its highest mark since May, when it hit $412,000.
- Compared to the corresponding month in 2005, the valley’s overall median home price increased 11 of 12 months in 2006. The only exception being a 0.9 percent median price decline in November.
“I think things are definitely going back to a more normal pattern,” said Louise Hampton, Realtor with Prudential California Realty in Palm Springs, who has 25 years of real estate experience. A healthy real estate market is an important part of the Coachella Valley economy. Not only is this home to thousands of retirees, the desert also has seen a surge in more permanent, year-round residents. That has fueled an expansion in the construction business.
More homes sold also means a boost to the overall economy, helping not only those directly involved in the home-building and real estate markets, but also furniture stores, home designers, landscape companies and the like. “Normally in January, activity starts to pick up, and we’ve certainly seen that this year,” Hampton said. “Our best selling months are ahead of us — March, April, May, June. Once buyers start jumping back in, I think it will be a domino effect.”
The general tone in the market has changed, said Sam Schenkl, executive director of the 1,600-member Palm Springs Regional Association of Realtors. “I think we’re seeing a return to the 2001-level market — which is things are quiet in the summer months and it picks up during ‘the season.’”
“The general vibe we’ve been getting in January — though we haven’t seen numbers yet for the month — is that it’s definitely picking up as far as sales,” Schenkl said.
Coldwell Banker’s large residential brokerage unit in the Coachella Valley is seeing an uptick in business so far in 2007, said Malcolm MacEwen, senior vice president and regional manager of the Los Angeles Desert Regional Office. “There have been a notable number of inquiries into our listings, and the traffic at our weekend open houses has more than doubled in the past two weeks. The number of properties entering into escrow are also on the rise and stronger than last quarter.”
Window of opportunity?
Many buyers who’ve been wary about home prices falling have been buoyed by a steady increase in home-price appreciation in most valley neighborhoods, real estate agents said. Joan Castro, in the real estate industry since 1977 and is also with Coldwell Banker Residential Brokerage, said buyers may be realizing there is a good window of opportunity. Interest rates remain at near-historic low levels, and most bets are that Federal Reserve policy-setters will hold rates steady.
Valley price appreciation maymight have slowed from a double-digit pace, according to DataQuick, but it’s still edging upward. And there are approximately 8,000 homes to choose from in the valley, including new homes with a wide range of incentives. For buyers, it’s the best market in years in terms of choice, said Greg Berkemer, executive vice president of the California Desert Association of Realtors. Berkemer’s advice to buyers: “Don’t try to time the market. There are motivated sellers, and this is your time.”
Castro said she has a number of month-end closings lined up and is seeing more buyers who are looking. “I think we’re going to have a very busy late season,” said Castro, who has been selling in the valley since 1999. Schenkl said the fact that speculators have largely exited the valley’s market also seems to be pushing the market to 2001 levels. “I think the Realtor community is starting to breathe a sigh of relief,” Schenkl said.
