December 2023 Hi-Desert Real Estate Market Update

Season’s Greetings Fans,

The holidays are fully on us along with the winter weather. The focus on family and holidays takes away from home buying. In our communities, November, December, January, and February tend to be our slowest months for sales in real estate. Last month was no different than most past years.

There is hope for 2024. This last week we have seen interest rates dropping into the low 7% range. I have heard of some lenders even slipping into the high 6% range for borrowers with fantastic credit. The current opinion of leaders in our industry is that with the drop in interest and, more importantly, the Fed’s signaling they may be done raising rates will inspire buyers to return to the market. During this almost two-year run-up of rates, buyers for the most part have stayed on the sidelines. The thought process is that once buyers can see hope that rates have peaked, they will jump back into the market with the hope that they can refinance to a lower rate in the near future. Time will tell if that will happen.

Another interesting and complimentary statistic is that, nationwide, prices have continued to rise. In our communities the increase will be less than national numbers but an increase, nonetheless. We are on track to close around 1,100 homes this year. This is almost half of the closings in 2021 (2,066) and about two-thirds of the closings in 2022 (1,696). Excluding the added cost of higher interest rates, nothing in the foreseeable future indicates any type of significant price drop. If someone wants to be a homeowner, they need to get in the game. It does no good for a buyer to wait for 5% rates if the price of the home accelerates.

Highlights of this Update include-

• Inventory is strong but I expect by next month it will see a major drop. Many Sellers use the new year to let their listings expire while they re-evaluate their situation. Most will look to hire a new Realtor. Some will drop their price to focus on their goal of selling. I expect we will see inventory drop into the high 400’s until March after the new year.
• We closed seventy-three escrows last month. We are on track to close about 1,125 homes this year.
• Eighty-two percent of closed escrows last month were under $400,000.

For me, it is Merry Christmas. Whatever you celebrate this year, I pray you have a fantastic holiday season and a prosperous New Year. Thank you for your support and confidence.

Sincerely,

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