Moving Towards Equilibrium In Coachella Valley

The Desert Sun has an update on the Palm Springs housing market. "The Coachella Valley's median home sales price slipped a bit in December from its record $400,000 posted in November. But at a median of $390,000, the figure was still 15 percent higher than a year ago. The trends have shown fewer homes being sold in recent months and staying on the market longer." "December valley home sales counts were down from year-ago levels in most categories tracked by DataQuick. The overall 990 homes sold was down 7.6 percent, the count for resale condos was down 33.6 percent, and the total of new-construction properties sold dropped 10.7 percent." "According to Greg Berkemer of the California Desert Association of Realtors, local unsold inventory continues to grow, from 5,657 properties in December to 6,395 as of Monday, as the market moves toward equilibrium between buyers and sellers." "To ease the sale of a house he purchased in Palm Springs in August and placed on the market in October, longtime investor Rick Castro of Rancho Cucamonga is trying a method that he said has worked well for him and other investors elsewhere in Riverside County. He is offering the four-bedroom home, located in an older neighborhood..with an asking price of $450,000, with a rent-to-own option." "There is no formal qualifying process, but Castro is looking for buyers with a steady income. His terms: pay $7,500 in initial move-in costs and $1,800 for rent. Provided the buyer stays for the term of a one-year lease, $1,350 out of each month's rent payment will go toward the purchase price. 'Not everybody has $20,000 or $25,000 to put down as a downpayment on a house,' Castro said Monday. 'If they have decent credit and decent income, this can work for somebody buying a house for the first time.'" "Carl Ingram, a real estate agent in Rancho Mirage, predicted that a continually tightening market will prompt more sellers to try similar methods, or at least lower their asking prices. Pressure on sellers could heighten if mortgage interest rates rise, or if sellers begin to feel pressure as the introductory terms on their 'exotic' loans expire in the next two years." "Right now, Ingram said homes priced below $400,000 are selling briskly, while sellers of homes priced higher are getting fewer bites, depending on homes' amenities. 'It's gotten to where if you don't have a swimming pool, don't expect to sell very fast around here,' said Ingram. He said he is advising selling clients to consider lowering their asking prices by 10 percent if they have not received serious offers in the first 45 days."