March 2024 Hi-Desert Real Estate Market Update
Greeting Hi Desert Real Estate Fans!
This month I have a lot of information to share with you. This could be a long read. I hope you learn something from it 🙂
February came and went with only a blip on our real estate screen. The biggest news was the rise in interest rates. In late January, it looked like the Feds were going to stop any increases in interest rates. Late January and early February, we received more negative economic news and the Feds seemed unsure of what they are going to do. Mortgage interest rates dropped in late January to the high sixes. By mid-February, they were back to the high sevens or low eights
depending on your credit score. They remain there today. This had the effect of cooling our market off, again.
We read a lot about inventory. Inventory affects price points. Too much inventory and buyers can push sellers around on what they are willing to pay. Too little inventory and sellers can command higher prices for homes. It is my opinion that we are well into a buyer’s market. But our local Realtors (and/or sellers) are keeping our price points well above what the sales points are today.
Let us take a quick look at our three larger local markets and compare actual sales prices to the current listing prices.
|
Community
|
Average Sales Price Feb
|
Percentage of Sales at or below avg price
|
Percentage of Listings at or below avg price
|
|---|---|---|---|
So you are aware, lower sales can skew the percentages. This is why I don’t compute sales for Landers, Pioneertown, and Morongo Valley. Generally speaking, they sell much less than the three larger communities. One high sale in any of these communities can really throw the numbers off. Joshua Tree can see this happen from time to time. Like last month, Joshua Tree had eleven total sales. In Joshua Tree we have to look for trends.
The Twentynine Palms market is close to balanced. Joshua Tree is a little off. Yucca Valley is significantly overpriced based on average sales price.
You can see my point more clearly by looking at the price per square foot for sold properties based on last month’s average price per square foot and current listings.
|
Community
|
Average price per square foot in Feb
|
Percentage of Sales at or below avg price per square foot
|
Percentage of Listings at or below avg price per square foot
|
|---|---|---|---|
As you can see, Twentynine Palms is close to average with almost half of the listings below average. Even though last month’s average in Joshua Tree was some of the lowest we have seen in years, almost four in five homes are priced above average. In Yucca Valley we see two out of three homes are priced above average. Just like Joshua Tree, Yucca Valley had one of the lowest prices per square foot sales that we have seen in a few years.
If we couple this information with the fact that we offer few real career job opportunities, we can see that our housing is priced well above what a local can afford. With a slowdown in Short Term Rentals (STR), we are seeing sellers trying to make a profit on properties they over-invested in as well as locals trying to maximize their values. If we adjusted prices to be more in line with sales trends, I believe we would see more sales. But greed can be a hard thing to address when you are selling. Realtors must paint a better picture for sellers to make better decisions.
Other highlights in our market include-
Inventory remains high. At this writing we have 640 active listings in our market.
The smaller, outlying communities performed well last month.
Average prices and average prices per square foot dropped significantly last month in Yucca Valley and Joshua Tree. We saw a big bump in average sale price and average price per square foot in Twentynine Palms.
72% of homes sold in February were below $400,000.
I hope you enjoy the Update. Please let me know if it generates any questions. As always, if you know of anyone who can use my help, please share my contact information with them. Have a great March and a wonderful Easter celebration.
Bob Armstrong
March 2024 Hi-Desert Real Estate Market Update
