It’s time for a market update. Let’s take a look at how current conditions are contributing to rising prices and declining supply.
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What’s going on in our local real estate market?
In general, we’ve been in a strong seller’s market recently. This can be determined by looking at the “months of supply” ratio, which measures the balance of supply and demand. In this case, supply refers to our current available inventory while demand refers to sales.
A balance of low supply and high demand is what leads us to a seller’s market in the realm of real estate. Our current ratio, which is at 4.2 months, is the lowest May 1 figure we’ve seen since 2013.
And the average number of days on market this April was 64—the lowest figure for that month in the last five years.
Returning to the subject of supply, let’s discuss how price range can impact these figures. For all price brackets below $700,000, the months of supply ratio is below six months. Homes at and above the $800,000 price point have experienced considerable improvement in terms of supply.
“NOW IS A GREAT TIME TO ENTER THE MARKET.”
Inventory, though, continues to shrink overall. As of May 1, there were 3,622 units available on our market. This is 870 fewer units than were on the market at this time last year.
Diminishing inventory is one half of what’s been driving up home prices, recently. And if typical seasonal patterns persist, inventory is likely to continue its decline until September.
Taking a closer look at appreciation, Cathedral City, Palm Springs, and Palm Desert stand out as the three local cities with the greatest price momentum for detached homes. These cities have 12-month gains of 15.6%, 12.7%, and 11.8% respectively.
Palm Springs has been the region leader in terms of price, with a current median of $656,100. This is 9.3% above the previous all-time high we saw in 2006.
With all of these considerations in mind, now is a great time to enter the market. Sellers have a great opportunity to take advantage of current market conditions. Buyers considering using financing to purchase a home are facing some urgency at the moment, though, as the impending rise of interest rates will negatively impact purchasing power.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.