Inventory is High. Does that mean nothing is selling?

Several of our readers and clients have commented about or questioned the high number of homes currently available in the Coachella Valley.

When most buyers new to the area think of Palm Springs, they think of only the City of Palm Springs. Our real estate market and our Multiple Listing Service (MLS) include a HUGE geographical area, extending from 29 Palms/Joshua Tree to Idyllwild to La Quinta and all the way down the valley to the Salton Sea and Coachella.

There are some other factors to consider when looking at the unsold inventory.
The 5 major contributors to the increased inventory:

1. The market slowdown itself causes homes to remain listed on the MLS longer;
2. Developers are now listing their remaining unsold inventory in the MLS;
3. Homeowners who previously were trying to sell their own homes are now listed with Realtors and at prices adjusted to reflect the current market and now back in the MLS;
4. Homes built or purchased for speculation (not to live in by the 1st owner) are now listed by Realtors and listed in the MLS;
5. Homeowners with loans that they can no longer afford and who are unable to refinance have listed their homes with Realtors and now in the MLS.


Here are some of the positive signs for the desert:
· Sales in October rose by 16.4% over last month – strongest gain in So. Calif.
· Year over year drop in sales was 30.1% -- smallest drop is So. Calif.
· Year over year price drop was 5.1% -- statewide the price drop was 9.9%
. Current affordability rate for desert is 33% -- at the height of the market it was 11- 13% range

Although these signs are encouraging, some Sellers still remain in a market where only the serious minded belong; successful seller’s homes must show well, and be priced to reflect their neighborhood – not necessarily the median price reduction.

For Buyers, when you find the home and area you want, this may be the best time to act.

** Although we know now when the market began to change there was so much activity in the pipeline that we were into 2006 before it revealed itself. Accordingly, we will be out of this current market as well before it is documented.