Good News For Buyers and Sellers

Broad changes taking shape across the desert real estate market have been well chronicled over the past few months. Overall, inventory is increasing, demand is receding, and activity in the market is slowing down as a result. This return toward more “normal” market conditions is an overall positive development for the long-term health of the Coachella Valley and the residents who call it home on a full or part-time basis.

Regardless of whether you fall in the buyer, seller, or buyer and seller camp, there are unique opportunities for you right now. Keep reading to learn why being on either side of the transaction has its advantages.

Opportunities for Sellers

Despite the slowdown in activity last month, it is still a great time to sell your home. Prices remain robust, demand is steady, and our peak seasonal market is in full swing, meaning more buyers are out and about. The market is back on an upward trajectory in the seasonal sales cycle. Month-over-month pended sales from January to February are up more than 100%, and the number of homes sold is up 41.7%, which has cut into available inventory a bit.

The sale pace is back at a typical level, sitting at nearly two months of market time to sell a home, with 56% of all single-family homes selling within 60 days and 79% selling within 90 days of listing. Sellers should be realistic about market time when putting their home up for sale, and practice patience if their home is still on the market after 30 or even 60 days.

Although the days of sight-unseen home purchases and fervent bidding wars are over, prices are up considerably year-over-year. For anyone who has owned their home for a few years or more, now is an excellent opportunity to cash in on realized equity to move into a home that suits your needs, whether that be upsizing, downsizing, or something that better aligns with your desired lifestyle. Inventory sits at around 4 months of supply to meet demand, indicating sellers still enjoy a slight advantage in negotiations. However, this figure has been steadily rising over the past few months. Those who are looking to capitalize on the market should strongly consider making a move now based on the appealing factors of strong prices, still low inventory, and a large pool of homebuyers. As more homes hit the market, you will have more competition for the attention of buyers. Jump in before your neighbors do!

Opportunities for Buyers

As we noted up front, inventory is rising, nearly triple what it was at this point last year. When buyers have options in the market, they can take their time – and to date this has been the case. In addition to the slowing pace of sales, more good news for buyers comes in the form of the listing discount, which has returned to a level closer to the historic figure of between 4 and 5 percent off the list price. Additionally, the number of homes selling above asking price continues to fall from a peak of over 75% of sales to about 30%. This figure will continue to drop with more homes hitting the market as buyers can simply turn their attention to another opportunity.

Factoring into the equation for buyers is the activity of sellers. During the pandemic era, the scarcity of homes meant sellers could practically ask for whatever they wanted, and most of the time they got it. In our current market sellers need to be more proactive to attract buyers, which should lead to more competitively priced homes. Although the National Association of REALTORS® (NAR) expects the median home price across the country to stay relatively stable, dipping 1.3% in 2023, they also expect prices to increase by 2.8% in 2024. For those buyers who have been waiting out the market, there is an opening to get into a home now before the market snaps back.

Homebuyers who will finance their home purchase should be aware of current interest rates and certain opportunities in the market. Lenders may offer incentives to make their loan more attractive, such as waiving fees for refinancing within a certain time frame. Additionally, rate buy downs are a possible tool sellers can use to entice a buyer to close the deal. According to NAR, interest rates are expected to drop to 6.1% by the end of 2023 and then to 5.4% in 2024. Affordability should always be a factor in a home purchase, so the prospect of dropping rates offers hope for buyers who may be squeezed out of the market right now. Another way to look at this situation as an opportunity is through the lens of scarcity. As with home prices staying high when inventory is low, homebuyers who can afford a home at the current rates should consider making a move before rates drop and the pool of buyers grows. Those who purchase now can always refinance to take advantage of future rate decreases. Speak with your real estate professional and your lender to go over your situation and to discuss opportunities.

If you are currently weighing your Coachella Valley real estate options, we would be honored to have the opportunity to be part of your decision-making process. Reach out to your local Bennion Deville Homes real estate professional to go over your goals and see how we can unlock possibilities for you. We will provide you with the information you need to make an informed decision. Visit our website, BDHomes.com, to get started.