April 2020 Hi Desert Real Estate Market Update

Greetings my “Shelter in Place” Friends,

No question we are all experiencing something we have never experienced before. Make no mistake, along with all the other issues this pandemic is having, real estate buying and selling is pretty much stagnate at this time. Many of you have reached out to me for my opinion on how this will all play out. All I can say is this is new for all of us. No one, and I mean no one, has any idea. All the talking heads are in the same boat. At this time, no one knows how this will play out. BUT…I can give you a bit of a cheat or a tell!

Like most things in business, follow the money! The number one requirement for a mortgage is the ability to pay it back. On Wednesday, April 1^st, My Girlfriend Debbie (you may remember she is a mortgage broker) received a note from her company. They claimed that they paid out over one hundred million dollars ($100,000,000.00) in loan funding on Tuesday. By Wednesday morning a large amount of the borrowers had asked for forbearance for their new loan. NOT GOOD! You can read more about how these postponed loans are affecting the banking requirements on my blog (http://www.bobarmstrong.realtor/blog/2020/4/4/market-newsletters-mortgage-update/ffadc2f5-7695-11ea-a0e7-69a44243059b ). I had a client who had funding conditions change three times in one day. By the third change, he no longer qualified for his loan. Today, Chase announced they would only loan to people with over a 700 credit score. They must have 20% down for the loan.  Our area lives and dies on government loans. FHA, VA, USDA have all tighten their requirements for a loan. No money equates to very few sales. I suggest you watch news on the mortgage markets. They will start to offer incentives for people to borrow again. Once they are offered, our real estate market will lag about four weeks behind. In my opinion I think the Feds will offer some very low interest mortgages for a short time. I’m thinking 2.50% on a thirty year to super charge the housing industry. Like you, I will wait and see. If I see something that triggers a rebound or restart, I will post it on my blog.

To me the best part of these Updates is the ability to take years of data into consideration. I expect, if the shelter in place stays in effect well into May, that the numbers will be tainted by our economic conditions caused by the pandemic over the next several months. But as for March of 2020, we saw some interesting highlights in the Update:

1) As you would guess, Pending and Active Under Contract status is dropping. This shows a drop in potential sales.

2) Joshua Trees average price jumped to over $340,000!

3) Price per square foot in Joshua Tree was $276.06 last month. This is a huge surge.

4) Days on Market for all three major markets in our area are all below double digits.

I encourage you to stay safe. I am available if you need me. I can do Facebook live tours of homes if you are interested or we can stay safe and stay six feet apart (taking our own cars) and actually visit properties if you need. What ever you need during these tough times, please let me know…except for toilet paper…you are on you own there 😊

APRIL 2020
MARKET UPDATE
Hi Desert Communities
By Bob Armstrong Real Estate Broker
(760) 221-2999, squabblefree.bob@outlook.com
7245 Joshua Lane, Suite B, Yucca Valley, CA 92284
DRE# 01275801

This monthly report is an attempt to provide you with the mathematical information about the current real estate market in the Hi Desert communities of Yucca Valley, Joshua Tree, Twentynine Palms, and surrounding areas. I do my best to keep my opinion out of the information. If you want my opinion, just ask! I also post market information on my Facebook Fan Page (www.facebook.com/desertrealestate). All information included on this Update is gathered from the California Regional Multiple Listing Service (CRMLS) which is the predominate service in the area. Numbers in parenthesis represent change from last month.

INVENTORY
At this writing (April 13, 2020) we have 394 (+16) residential homes actively for sale in our area ranging from a low price of $17,500 to a high of $4,450,000. There are 78 (-28) properties in “Active Under Contract” status (some major contingencies but in escrow). There are 89 (-04) properties in a Pending sale (waiting on escrow to close). Of the active listings, 131 in the Yucca Valley zip code of 92284 (+04).  75 in the Joshua Tree zip code of 92252 (-07) and 126 in Twentynine Palms 92277 (+20).

 MONTHLY CLOSED ESCROW AND INVENTORY COMPARISON BY YEAR

Last month, in March, we closed escrow on 134 residential properties. In comparison, last year we closed escrow on 137 residential properties in our Hi Desert communities. Below are two, line graphs of inventory and closed escrow by month for the 2015, 2016, 2017, 2018, 2019, and 2020.

LAST MONTHS CLOSED ESCROW INFORMATION
Number of Closed Escrows:
Last month (March 2020) in our Hi Desert communities of Yucca Valley, Joshua Tree, and Twentynine Palms plus outlying areas we closed escrow on 134 homes (+19). 38% of the sold homes were in Yucca Valley, 22% were in Joshua Tree, and 26% were in Twentynine Palms, 14% were from the smaller communities that surround our larger ones.

CLOSED ESCROWS BY PRICE RANGE:
Of the 134 escrows closed in March, 10 were under $100,000 (+04). 25 were between $100k and $150k (+06). 39 were between $150k and $200k (+09). Combined 55% of home sales were below $200k. 39 homes sold between $200k and $300k (+09) last month. 21 homes sold over $300k (-09). The highest value home sold at $1,095,000 and is located on Skyline Drive in Joshua Tree just north of the Highlands.

HOUSING STATISTICS
AVERAGE PRICE OF CLOSED ESCROWS:
In March, homes that closed escrow in Yucca Valley sold at an average price of $234,638
(-$8,109), Joshua Tree averaged $340,553 (+$44,606), Twentynine Palms averaged $153,177 (-$6,849).

PRICE PER SQUARE FOOT OF CLOSED ESCROWS:

In March, homes that closed escrow in Yucca Valley sold for $158.32 per square foot (+$15.10), Joshua Tree sold for $273.06 per square foot (+$49.84), Twentynine Palms sold for $121.97 per square foot (+$3.25). The most expensive home sold by square foot this month is in Joshua Tree.  This newer home is 1,260 square foot, on 2.25 acres, sold for $538.89 per square foot, and is on Sullivan in the Hospital area.  The least expensive home sold was $39.24 per square foot and is located in Twentynine Palms on Cactus Jack.

Average Days on Market:
The average days on market for sold homes in Yucca Valley in March was 87 (-13), Joshua Tree was 93 (+26), Twentynine Palms was 62 (-58).

MARKET CONDITIONS

I am sharing with you the Altos Market Trend Report. This is a weekly report I subscribe to that can shed light on the health of our market. I will be using the same week of each month that I prepare my Monthly Market Report to help inform you of the trends in our market. The Market Action Index (MAI) answers the question “How’s the Market?” by measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller’s Market conditions. Below 30, conditions favor the buyer. Watch for changes in MAI. If the MAI resumes its climb, prices will likely follow suit. If the MAI drops consistently or falls into the Buyer’s zone, watch for downward pressure on prices.

YUCCA VALLEY:
This week the median list price for Yucca Valley, CA 92284 is $299,450 with the market action index hovering around 40. This is an increase over last month’s market action index of 39. Inventory has held steady at or around 126. The market has been strong for several consecutive weeks. Reflecting these inventory conditions, with the MAI in the Seller’s zone, it is not surprising that prices have recently resumed their climb.

JOSHUA TREE:

This week the median list price for Joshua Tree, CA 92252 is $257,450 with the market action index hovering around 39. This is about the same as last month’s market action index of 39. Inventory has held steady at or around 68. Home sales continue to outstrip supply and the Market Action Index has been moving higher for several weeks. This is a Seller’s market so watch for upward pricing pressure in the near future if the trend continues.

TWENTYNINE PALMS

This week the median list price for Twentynine Palms, CA 92277 is $145,000 with the market action index hovering around 34. This is about the same as last month’s market action index of 34. Inventory has held steady at or around 125. In the last few weeks the market has achieved a relative stasis point in terms of sales to inventory. However, inventory is sufficiently low to keep us in the Seller’s Market zone so watch changes in the MAI. If the market heats up, prices are likely to resume an upward climb.

If you would like to better understand the math and dynamics of our local market, text, email, or call and let’s discuss your questions and concerns. I can find a winning strategy for you in any market.

Sincerely,
Bob Armstrong
(760) 221-2999
DRE #01275801
♻️GREEN Real Estate Group

If you know of someone who would appreciate the level of service I provide, please call or text me with their name and phone number or email address. I’ll be happy to follow up and take great care of them.