Some Clarity For A Transitioning Market
Stories of a shifting housing market are all over the news cycle, from industry publications and experts to local media outlets. Our monthly Coachella Valley market reports have also noted market trend changes due to emerging patterns in the data. With inventory starting to creep back up, sales activity pointing down, and many people uncertain about what it all means, we wanted to present some clarity to aid you in deciding your future, regardless of whether you fall under the buy or sell side (or both!) of the decision tree.
Of course, every situation is unique so if you are unsure about how to digest the information available to you, we recommend that you connect with your local Bennion Deville Homes real estate professional. Whether you are interested in buying or selling a home, they can address any specific questions or concerns you may have and provide you with the information you need to make an informed decision.
No, We Are NOT In A Bubble!
Despite some catchy recent headlines, no, the current housing market is not experiencing a bubble. The factors that drove the housing bubble and subsequent crash in the 2000s, such as loose lending practices and homebuilder speculation driving the market, are not present in our current conditions. There are several factors that are keeping prices high, most notably low inventory levels and still strong demand for property. With inventory starting to creep back up, plus more housing on the way in the form of new construction, and rising interest rates, which will cool demand, we expect to see prices stabilize in the coming months. The rapid sales pace and rate of price increases for the past 12-18 months were simply not sustainable. The market is not about to burst. In fact, the cooling of demand and growing inventory levels are indicators that the local housing market is heading down a more sustainable path, one that should not prevent you from acting should you be thinking of buying or selling a property.
Should I Buy A Home Right Now or Wait Out the Market?
For the first time in a long time, homebuyers have options on the market. Inventory levels of new and existing homes continue to grow, which is a great thing for rebalancing our local housing market. An increase of properties for sale will slow the bidding wars for homes, which greatly contributed to price growth during the height of the pandemic-era real estate market. Additionally, the summer months traditionally have a smaller buyer pool, meaning there could be less competition for homes as we head back toward market seasonality. This will also give buyers more leverage at the bargaining table. With modest momentum swinging back toward buyers, price reductions are emerging again in the market. If you are interested in buying a home now, you have a better negotiating position, and homes just coming to market should be priced more realistically to reflect this shift.
For those homebuyers who will be purchasing a home with a mortgage, there are other reasons to consider now a good time buy. Although interest rates have been rising, they are expected to go even higher this year as the Fed looks to further cool the economy to combat inflation. If you are in position to make your move, and your monthly payment for a home is within a range that you can afford, you may want to consider acting before rates go up and your buying power diminishes. Work with your lender to get prequalified for a loan and determine a monthly payment that fits comfortably into your budget.
Why Should I Sell My Home Now?
Despite homebuyers gaining a bit of momentum, it is still an incredible time to list a property for sale. Prices remain at or near all-time highs, and for those who have been in their current home for several years or more, the market presents an excellent time to cash-in on any realized equity while finding a property that may fit your current and future lifestyle needs. Selling a home may be of particular interest to empty nesters and those looking to downsize, growing families seeking more room, and anyone who purchased a part-time residence who wants to capitalize on the market.
As mentioned above, although the growth curve on home prices is expected to flatten in the coming months, we are still seeing robust opportunities to sell for a great price. The median sale price of a Coachella Valley home ended the month of May at almost $640,000 – nearly 23% higher than the same time last year and up over 3% from April. Monthly modest price growth is still expected due to low inventory, but with the number of homes hitting the market increasing, the window is shrinking. It is better to sell while levels remain scarce before more homes hit the market in what is traditionally our most active listing time in the fall and winter months. Those who act now can maximize their home’s price.
Whether you are looking to buy or sell a home in the Coachella Valley, we hope you make a Bennion Deville Homes real estate professional a part of your process. If you are curious to know more about what your home is worth, or are in the market to buy a home, please connect with your local Bennion Deville Homes agent. We will unlock possibilities for you.