Signs of Life in Housing

I am currently in Palm Springs.  This morning, the lead headline in the local newspaper, The Desert Sun, was that home sales in the Coachella Valley had risen 58%.  Sales of entry-level homes drove the surge.

Sales of entry-level homes dominated the Coachella Valley real estate scene during the fourth quarter of 2008, while big-ticket properties turned in a disappointing performance, new data shows. ...

"... Entry-level home sales are robust” with a 58 percent gain over 2007. “High-priced real estate sales took it on the chin.”

The company has tracked real estate trends across the nation for more than 16 years and provides data to The Desert Sun for a comprehensive look at the Multiple Listing Service market. It made its observations from the 1,867 sales tracked in the last three months of 2008:

Sales of property priced under $500,000 doubled compared to the fourth quarter of 2007.

Real estate activity mushroomed in west Desert Hot Springs, where sales prices averaged $108,247.

Sales of mid-range homes dropped nearly 50 percent.

Sales in the market between $750,000 and $1million fell by one-third.

Homes priced above $1 million declined nearly 56 percent.

“I have never seen prices tumble so dramatically in such a short time,” Veling said. “There has never been such a clear indicator that price is driving this sales phenomenon.” ...

The median price from the sale of single-family detached homes and condos, and new construction, stood at $180,000 in January — a month noting sales gains of 9 percent and one $9 million home sale, according to MDA DataQuick.

The California Desert Association of Realtors said existing home sales rose 51 percent that month in the Coachella Valley.

It set the valley median home price at $153,350, down from $319,440 in January 2008.

 

 

In the Coachella Valley, the median home price has been cut in half.  Housing prices have fallen so far that homes are becoming affordable.

This is important.  Places like Palm Springs lead the housing bubble up.  They were also the first places to bust.  Now, they are stabilizing as buyers are enticed by attractive valuations.  This is how a bottom works.

That does not mean the housing collapse has ended.  However, we can now see the light at the end of the tunnel.  

Most of the housing bust is over.

Comments

[Sivaram Velauthapillai]

Hi,

You are doing a good job with this blog. I would like to make a suggestion if you have time for it:

It would be great to have a search feature. One can attempt to search from Google and various external sources but it would be good to have it on the homepage.

[san diego real estate]

Real estate is safe place to invest money.What is the Roll of an Investor in Real Estate? On what basis Investor & Broker Dealing? ?

[psychodave]

Very convincing presentation.

How will Palm Springs' more reasonably priced housing protect itself from rising unemployment, which could cause a further decline in demand?

[Toro]

Dave

Unemployment already has been rising.

T.

[Boat52]

Buying a large formerly expensive house is like buying an elephant. Easy to do, but difficult to take care of. Let the buyers beware.

[Rich Krizo]

A point that a lot of people are missing is that on November 26 there was a holiday season moratorium on forclosures that was put on Fannie, Freddie, with BofA, Wells, Citi, Chase, Countywide and national servicers that lasted until Jan. 30th. On 2/14 these same lenders placed another moratorium until Obama Rescue Plan was put in writing. That happened on March 4 and on March 6 the moratorium was extended to March 30. Trust me, there are a whole lot of forclosures that are going to hit the market as soon as the moratorium goes off. It's just delaying the problem. Market needs to get cleared asap. Check it out.