What’s the latest news from our Palm Springs market? There are a few metrics we have to look at.
The first is our “months of sales” ratio, or our absorption rate. As of March 1 of this year, this ratio was 4.8 months, which is very similar to the 4.7-month mark we were at during this time last year.
These are the lowest ratios we’ve seen in the last five years. Even though sales have declined, inventory remains well-contained and seems to nearly match or equal the number of new homes coming on the market. The median number of days on market in February was 66 days, which is exactly the same as it was in February of 2018.
When we look at the absorption rate in different price brackets, we see ratios that are comparable to last year in every bracket under $700,000. Over $800,000, however, the absorption rate is lower, which indicates that the high-end price range is showing good strength compared to other ranges.
As of March 1, there were 3,909 homes for sale, which is almost identical to the 3,901 units we had for sale on March 1, 2018. Again, these are the lowest March 1 ratios we’re seen for the last five years, which we find encouraging considering the measurable drop in sales. This implies that buying and selling are relatively balanced—even with the lower sales numbers.
12-month increases in city median prices for detached homes are beginning to slow in a comparable way to what we see in the regional detached index. For example, Cathedral City now shows a 12-month gain of only 2.7%, Indio a gain of 2%, Desert Hot Springs a gain of 1%, and Palm Springs and Palm Desert showing year-over-year price declines. In the condo market, Indio saw a 31% increase, Rancho Mirage saw a 24.9% increase, La Quinta saw an 11.8% increase, and Desert Hot Springs saw an 11.3% increase.
Interest rates are as good as they’ve been in recent months, but volatility seems to be the new norm. Remember, interest rates follow the 10-year treasury note, so this recent dip has reinvigorated buyers to purchase properties and lock in a low rate. These low inventory numbers also means its a great time to sell your Palm Springs home.
As always, if you’d like to know more about our Palm Springs market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.