September 2023 Hi Desert Real Estate Market Update

Greetings Fans,

Fall is in front of us, summer behind. With a little luck, we should see a small uptick in our market for sellers over the next 10 weeks. The overall belief is that once the Fed’s stop raising or lower interest rates, buyers will come back in droves to the market. The belief is that buyers will believe interest rates will fall lower so they should get in the market at the higher rate, and refinance when the rates drop. The problem is no one believes rates will drop much below five percent in the foreseeable future. Foreseeable being the next 24 months and longer. Higher interest rates are here to stay.

The second issue in front of us, in our communities, is the lack of jobs. Not retail or restaurant but real career job opportunities. They do not exist in our communities. Construction related jobs sure. But they, like a tourist economy, come and go with the economy. Many construction workers left the Hi Desert in the 2008 recession and are priced out of returning. Since our market turned around April of 2022, we have seen a steady decrease in transactions in our local market. The question I keep asking myself is “what if today’s market is our normal market”? What if we are returning to the market of 2015/2016? We closed about 1,160 escrows in 2015. Another 1,332 escrows in 2016. At this moment, it appears we will close around 1,200 this year. So far, year to date, we have closed about 800 escrows. We are on track to close less than 100 escrows a month. Kind of puts us back around 2015. My point is our current market may be our normal market. Sellers need to price their product to be more competitive in this market and buyers need to spend time with their Realtor to see a good bargain when they find it. A good Realtor can be the difference between a good choice and a bad one on both the selling and buying side.

Highlights of the September Update include,

1. Inventory remains consistent between 550 and 600 properties for sale. Currently, this is a five-to-six-month inventory. Many in our industry consider the market balanced when we have around five to six months of product to sell.
2. Active Under Contract and Pending sales dropped to a new low compared to the last four years. This could reflect in a drop in closed escrows over the next two months.
3. The Update show a big drop in sales in Twentynine Palms by over 6% for the previous month.
4. Over 70% of homes sold were under $400,000.

Fall can be one of the best seasons in our Hi Desert communities. I hope you can find time to get out and enjoy all that is happening in our area. As always, if you know someone who needs help in our local market, please share my information with them.

Sincerely,

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