October 2022 Hi Desert Real Estate Market Update
Happy Fall Real Estate Fans!
Our temperatures are cooling. Many of us are in the mood to get outside and enjoy a beautiful fall in our spectacular desert communities. Our market has changed a couple of time over the last writing as we try to navigate this confusing real estate market. My comments may be a bit longer than I usually write.
I believed and told you that I thought we would see some rebound in our market by now. I was not prepared for interest rates to jump from mid-5% range to the high 6% range in just about a weeks’ time. This has cooled our market even more than the last two months of changes. At this writing we have 636 active homes listed. Our business calculates a buyer or seller’s market by comparing it to how long the current inventory will last. We divide the inventory by the closed escrows. If there is less than six months of inventory, we call it a “Seller’s Market.” If there is over a six-month inventory, then we call it a “Buyer’s market.” We closed escrow on ninety-nine homes in September. This gives us just short of a 6.50-month inventory or a Buyer’s Market. This is the first time we have crossed this line since March of 2016. This is a major change for our communities not seen in over six years!
Now we couple this with the surging interest rate hikes, and we have a recipe for a slowdown. Inventory is the highest since 2015 and shows no drop off as more people decide to leave our communities. Buyers are dropping like flies as they become disqualified from mortgage lenders.
Don’t get me wrong. We closed escrows on ninety-nine homes last month. Not a bad number for us but definitely not a good number either. Depending on our economy this could be a short-lived market, or we could slide into a huge inventory of houses with no one able to buy. Remember almost 50% of our community live on less than $50,000 of household income. Hard to qualify for a $400,000 mortgage with $50,000 worth of income. As gas prices surge again, we see a major drop off in visitors. Many of my vacation rental clients tell me there has been a major drop off in demand.
My opinion is that we will stay at this level +/- about 15% through the winter. I am hopeful spring will shed some light and demand on our struggling home market.
Other highlights of this Update include-
- Highest inventory since November 2015, lowest closed escrows since February 2019.
- Average price of a home increased in all three of our larger markets.
- Over 20% of homes sold last month were over $500,000.
- Average days on market (DOM) increased in Yucca Valley and Joshua Tree but decreased in Twentynine Palms.
We are in the middle of the community art tours. I hope you get a chance to visit some local artist and lend them your support. Have a great fall.
Sincerely,
Bob Armstrong
(760) 221-2999
DRE #01275801
GREEN Real Estate Group
Bob Armstrong
