October 2024 Hi Desert Real Estate Market Update

Happy Fall Real Estate Fans,

Finally, the weather has calmed down. It now looks like we will have about a three week fall and then a major drop in temperatures again. For now, it is nice to feel the fall desert weather.

The market went sideways since the Feds dropped rates. It was assumed that T-bills (which mortgage interest rates are based) would follow, and they did for about a week or two. Then they climbed back up. Today they are higher than before the drop. And it’s only been a few weeks since the adjustment. In our local market, instead of buyers coming back we found Sellers jumped back in. In my September update, we had about 680 active listings with 73 closings. This would equate to approximately a nine-month inventory (inventory divided by sales). In this Update you will see we have 744 active listings with 78 sales. This would equate to a nine-and-a-half-month inventory. I just looked and we are at 777 active listings. To see the health of our market in a smaller equation, look at the Active Under Contract and Pending sales. In this Update you can see we have 49 and 75 respectively. This is way down. Tracking these two numbers will show us the market is healing (or bleeding). If these rise, the market is getting busier.

Another concern I have is being greatly overlooked by consumers and real estate professionals. Since sales have stalled, primarily in the higher price range, Comps for appraisers are going to be very difficult. The current average price per square foot in Joshua Tree is $333.83 (this is up from $247 in the September Update which was very low for JT). I have just shown almost all the new, mid-century builds to a client who is financially strong and will be using a conventional loan. That buyer had to change their goals because there was no way we could get an appraisal to value to qualify for a loan. All those houses will need either the market to roar back, cash buyers, or major price drops. LA/OC contractors who flooded into our market don’t understand this and continue to hold their price. I looked for my buying client. In the last eight months, only 10 houses have closed in the MLS in Yucca Valley for over $400 per square foot. Appraisers will have to be very creative to find value. There is no way they can show comparative value which almost all lenders require. They may be able to show a cost approach to value, but I don’t see lenders allowing this en masse. Maybe a credit union or a bank that portfolios their own loans. That’s a real long shot.

Highlights of this Update include-

• High inventory is continuing to expand. At this writing, we have 777 active listings.

• We could be on the path to close less than 900 properties this year. I have been creating these Updates since 2013. This would be the lowest year in my records. By almost 200 sales!

• 74% of homes sold were under $400,000.

Enjoy our short fall season. Winter is on the way. Traditionally, winter is our slowest season. Please remember, I can help buyers and sellers in any market. If you know of someone that needs my help, please share my contact with them.

Sincerely,

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