The weather has been more humid than normal for July in the Desert, and it has been extremely uncomfortable.

In mid-July, we had a freak thunderstorm that hit the valley. The thunder was loud & ominous and there were a few instances of lightning. The next morning, over 1″ of rain fell in one hour on Palm Springs, which caused some major flooding in the city.

The following week, there was a 5.4 earthquake that hit the Chino Hills area of Southern California, and the shaking was felt in Palm Springs.

And top of this is the constant buzzing of the locust, or cicadas, that have inundated the town. With all of these occurrences happening, one would think that the “plagues of Egypt” have fallen upon us here in Palm Springs.

Even if the other “plagues” did show up here, it wouldn’t have stopped the real estate market during the month of July.

Here’s a breakdown on the Real Estate activity during month of July:

* 98 homes & condos sold, with a median price of $402,849
* 180 new listings on the market
* Average days on market was 163 days
* Average % of List Price to Sales Price was 94.7%

The number of pending sales was up once again for the month of July. Pending sale are properties that are currently in escrow, where all of the contractual contingencies have been removed and the sale of these homes are likely to go through. Currently, there are 64 pending sales for the month of July, which is up from the June 2008 total of 40 homes.

According to the Desert Area MLS, there are currently 1255 homes & condos on the market in the city of Palm Springs. Of the 1255 homes available, 194 of them are currently in escrow.

What does all of these statistics mean? It means that there is a 13 month supply of homes available for buyers to purchase in Palm Springs, and prices will continue to adjust as home sellers are realizing they need to aggresively price their homes in order to sell, which is reflected in a higher average percentage of list price to sales price.

In a nutshell, it’s a great time to buy a home in Palm Springs.

See you next month for the August 2008 Palm Springs Real Estate Market Report, and watch out for the locust!!!

Photo courtesy of Flickr

But when I meet someone new and they find out that I am a REALTOR, then the barrage of questions comes flooding in. Some of them go like this:

1. “What is the difference between a short sale and a foreclosure?”
2. “Do you think the Palm Springs Real Market has hit the bottom?”
3. “What is happening with Port Lawrence?”
4. “Do you think it’s good time to buy?”

I will usually answer these questions this way:

1. How much time do you have for an explanation?
2. The answer is yes.
3. Check out my blog, Blog of the Desert, and read my article on Port Lawrence.
4. The answer is absolutely!!

The number one question that I get asked by everyone is: “What homes are selling in Palm Springs?”

As you can see on the chart, there have been 292 single family homes sold YTD in the city of Palm Springs, with an average days on market of 109 days.

To answer everyone’s question, “What is selling in Palm Springs?”, here it is: Homes in the $250,000 to under $300,000 have been the top sellers in the real estate market in Palm Springs. In the last 6 months, there have been 42 homes in this price range that have sold, with average time on the market of 93 days. A very close second place has been the $350,000 to under $400,000 price range, in which 39 homes have been sold.

Many of these homes represent the short-sale (pre-foreclosure) and foreclosed homes that have been flooding the real estate market. Savvy buyers have been purchasing these homes at bargain basement prices, and will reap the benefits as long as they keep the home for a minimum of 5 years.

So what do these number mean to the potential Palm Springs home buyers and sellers?

Let’s take another look at the chart. Say you are selling your home in Palm Springs, and it is priced at $649,500. According to the data, homes in the price range of $600,000-$649,999 have an average time on the market of 159 days and 11 homes have sold in the 6 month time frame.

During the same time frame, 16 homes sold in the $549,000-$599,999 price range and were only on the market for an average of 85 days. As a seller, you need to really look at the numbers and price your home according to the current market data or it will just sit on the market.

For you buyers, I have some pearls of wisdom that you need to share with you as well. The chart to the left represents the total condo sales in Palm Springs for the last 6 months. There were a total of 362 condos that have sold, with an average time on the market of 144 days.

The $200,000-$249,999 price range did very well YTD, with a total of 77 condos sold.

Many people think that the days of multiple offers are a thing of the past. This is simply not true. If homes and condos are priced aggressively, the onslaught of multiple offers will occur.

For instance, my client wanted to place an offer on a mid-century modern home that was priced at $285,000. I knew that this home would sell quickly, so I informed my client that they needed to be aggressive with their offer. We made an offer of $295,000, $10k over the asking price, with a closing in 30 days. To our surprise, we were turned down. It turns out the winning offer was $285,000 cash, and a close of escrow in 10 days.

The moral of the story: Homes are selling in Palm Springs, News at 11. For the buyers, now is the time to take advantage of some of the lowest home prices that the Coachella Valley has seen in a very long time. If you wait for “the bottom to hit”, you are already too late. For the Palm Springs home sellers, the numbers don’t lie. Home prices have gone down. If you want your home to sell, you need to price your home aggressively.

People flying off the handle, City Hall fining honest business owners for having signs in their storefronts, and Fox News still telling the world the “Sky is Falling”. Being bombarded everyday with depressing news will start wearing anyone down. I’m a pretty optimistic person, but there are some days that I just want to stay in bed all day.

Every so often, a random set of positive cliches start playing my head: “It’s alway darkest before the dawn” “The glass is half-full, not half-empty”, and “Winners never quit, and quitters never win”.

As I was preparing the June 2008 Palm Springs Real Estate Market Report, another cliche just popped into my head: “Every cloud has a silver lining”.

I am not going to post that this year’s real estate numbers are lower than last year. We already know that, and why point out the obvious?

There are currently 1326 acitve listings in the city of Palm Springs. Of these 1326 listings, 104 properties are contingent sales in escrow and 108 properties are pending sales in escrow. Pending sales in escrow are transactions where all the contractual contingencies have been removed, and the sale will go through.

The first “silver lining” I discovered: Of the 108 pending escrows in Palm Springs, 40 of transactions occurred during the month of June alone. That’s huge!!!

The second “silver lining” of the Palm Springs Real Estate Market is the increase in the median home price. The average median home price last month was $403,360, which was a 5% increase over last month. The median home price for May 2008 was $381,665.

There were 102 homes & condos sold in Palm Springs during the month of June.

During this time, the homes were getting over 94% of the listing price. What the information is telling me: Homes that are priced to current market trends are getting the best prices, and are being sold sooner.

The last “silver lining” is how long homes are on the market. The average days on market of homes sold in Palm Springs for the month of June is 131 days. This is 11 days shorter than the YTD total of 144 days, and is 9 days shorter than the May 2008 of 140 days.

What does this all mean to you? If you are selling your home in Palm Springs, make sure you price your home competively, or it will just sit on the market. And to you, the Palm
Springs home buyer? I will finish this blog post with my favorite cliche, just for you:

“Don’t put off until tomorrow what you can do today.”

Throughout the last six months, we have been inundated with the 24-hour media barrage about the state of the economy, gas prices going up, and home prices going down.

It’s a wonder that I even get out of bed & go to work!!

Rather than focusing on the negative news that I get everyday, I try to look at the positive things that are happening around me and try to find a silver lining.

Our office, led by my broker Scott Lyle, procured the highest priced listing in the Coachella Valley. It is the home of Alan Hamel & Suzanne Sommers, called Les Baux de Palm Springs, and is being offered for a mere $27.5 million dollars.
The Palm Springs Real Estate continues to move forward, despite what is being reported in the news:

There are currently 1450 homes for sale in Palm Springs, which includes 218 homes & condos that are currently in escrow. Of these 218 escrows, 117 of them are pending sales. This means that the contingencies have been removed from the contract, and will move forward to a successful escrow closing.

There were 129 homes & condos in Palm Springs in April 2008.

The average listing price of homes was $428,525, with an average time on the market of 138 days. This number is 11 days lower than the 2008 average of 149 days.

Of the homes that sold in April, the average home sales price was $396,087, which was 92.4% of the listing price. The number of 129 homes sold in April represents 35% of the YTD total of 363 homes & condos sold in Palm Springs.

May 2008 housing numbers were also impressive. There were 121 homes & condos sold during the month of May, which is 25% of the YTD total of 484 properties sold in Palm Springs.

The average sales price of the homes & condos sold in Palm Springs was $381,665, which is 92.52% of the average list price of $412,538.

What do all these statistics mean to you & me? It means that there is a 12-month supply of homes to purchase in Palm Springs, prices of homes continue to level off, which gives buyers like yourself more choices than ever to find the home of your dreams. Sellers, which include the banks that have foreclosed on homes, are more likely to be in the right frame of mind to negotiate on the terms of your purchase agreement.

Whether you are looking to purchase your full-time residence, vacation home or just starting your Palm Springs home search, let Scott Lyle Realtors’ 30 years of experience help you every step of the way. See you next month for the June 2008 Palm Springs Real Estate Market Report.

Every Wednesday morning, the Palm Springs Association of Realtors has its weekly Board meeting at the Mizell Senior Center at 8am.

I always get to the meeting about 15 minutes early to get a good seat.  When I got there this morning, the meeting room was packed.  There was a TV news crew setting up in the corner, and was wandering what all the hoopla was all about. 

Were were having a special guest speaker?  Who was it?  The Mayor?   The Governator?  My curiosity had piqued.  It turns our speaker was Larry Ward, the Riverside County Tax Assessor.  Now I thinking to myself “Why all the fuss?  Death & Taxes are the only things certain in life.”

I know that sounds a little pessimistic so early in the morning, but I did not have my morning cup of coffee yet.  The topic that Mr. Ward was covering today was on Proposition 8, the amendment clause in California’s Prop. 13 law to reduce property taxes when homes have decreased in value.

Proposition 8, passed in November 1978, amended Proposition 13 to reflect declines in property values. As a result, Revenue and Taxation Code Section 51 requires the County Assessor to annually enroll either a property’s factored Proposition 13 base year value or its Market Value as of January 1 (lien date), taking into account any factors causing a decline in value, whichever is less.

Mr. Ward went on to explain that in Riverside County, 15,000 Notice of Defaults on homes have been issued in the first 3 months of this year and that foreclosures are up 171% over last year.  With property values down and the current state of the economy, the County Assessors office wants to be proactive in order to help homeowners relieve some of their financial burden.

How will this help the homeowners of Palm Springs & rest of California?  The County Assessor is focusing on people who purchased their homes from January 1, 2004 to the present.   This timeframe represents the height of the Real Estate boom and all of the buying frenzy that ensued.  Take a look at the chart to illustrate how Prop. 8 would work.

If you purchased your home for $400,000 in 2004 (Year 1),  Prop. 13  allows for for a maximum of 2% a year increase in your tax basis .  

In year 2, your property value increased to $455,000, but your Prop. 13 basis is only $408,000.

But in years 3 & 4, the property values plummet but you are still paying the higher basis.

 By filing a Decline in Value Reassessment application, you can petition the County Assessors Office to reassess the value of your home.  If you look at Year 3 Prop. 13 Market Values, the basis is $416,000, which represents $5200 per year in property tax.  By filing a Prop 8 reassessment and bring your basis down to $365,000, the new property tax would only be $4563.  This represents a savings of nearly $700 per year!!!

Prop. 8 allows an annual reassessment increases (or decreases) based on current market data.  You need to realize that Proposition 8 reductions are temporary and recognizes the fact that the current market value of your home has fallen below its Proposition 13 base year value.

If and when the market value of the previously reduced assessment (Proposition 8) increases above its Proposition 13 factored base year value, the Assessor will once again enroll its Proposition 13 factored base year value. Proposition 8 values can change from year to year as the real estate market fluctuates up and down.

Any property that has received a Proposition 8 reduction in the prior year will be automatically reviewed the next year to determine whether that year’s lien date value should be maintained, decreased, or increased. Unless there is a change in ownership or new construction, your assessment can never increase above the factored Proposition 13 base year value.

The due date to file the Decline in Value Reassessment application is September 1, 2008.  For more information on Riverside County Proposition 8 data, log on to http://www.RiversideACR.com

In these tough economic times, any money saving ideas can help us all.

We all know bad news sells newspapers.  Whether it is the latest celebrity going to rehab or the Dow dropping 150 points, we are fixated on the bad.  

For the last year, we have been inundated by the media on how terrible the real estate market is across the country.  We all have to remember that real estate market is local, and that was is happening in Michigan is not necessarily happening in Palm Springs.   It drives me crazy when publications like the Desert Sun will report in bold headlines, “The Palm Springs Real Estate Market Continues Downward Spiral”, but in small print on page 6, “home sales up for the month of december”.

During my research in the Palm Springs MLS for the January 2008 home sales report, I found a silver lining: 

Median Home Price in Palm Springs for January 2008 Up 8% over last year

The January 2008 median home price in Palm Springs was $409,383, compared to the January 2007 price of $379,186.  This is an increase of nearly 8%!!  The incremental increase in the average median home prices is attributed to the continued sales of $1,000,000+  homes in Palm Springs, in which 3 were sold last month.  Here is the breakdown of the real esate business last month:

In addition, homes and condos in Palm Springs are selling nearly 94% of asking price.  Again, what does this mean to you, the buyer?  It means that the sellers of homes are continuing to adjust their offering prices to the reality of the current real estate market. 

Whether you are buying a short-sale home or a foreclosure, there many investment opportunities to be had in Palm Springs.  See you in March for the February 2008 Home Sales report.

 Photos courtesy of Flickr