We’re in a seller’s market, but buyers can benefit too.
A seller’s market? In the desert? Almost unbelievably, this concept is something we’ve become more familiar with in the last few years. No longer is it the stuff of legend experienced once upon a time in the far away land of Orange County.
However, no one thought the term “seller’s market” would be uttered in these current times. Nobody expected a real estate rebound quite like this. As a result, we’re seeing a unique opportunity for anybody thinking of buying or selling a home. I’ll explain what I mean in a second. First, let me give you the details:
1. A surge in demand continues
According to the National Association of Realtors, pending home sales spiked a stunning 44.3% in May compared to April. It blasted past expectations of a 15% gain. That is the largest one-month jump in the history of the survey, which dates back to 2001. Locally (as of June 30), despite the effects of the pandemic, average daily pending sales are now only 5% below last year’s levels at this time. That’s a 40% increase since mid-April.
Of course, the reason behind this is the pandemic. Much of the housing market shut down entirely in March and April. Since these are prime months for real estate sales in the Coachella Valley, there is a tremendous amount of pent-up demand. But that’s not all…
2. Ultra-low mortgage rates
Mortgage rates continue to hit new record lows. The 30-year fixed mortgage rate currently stands below 3%, more than a half percent lower than a year ago. Not surprisingly, this is creating even more demand, as buyers seek to take advantage of these historically low rates, and the Valley’s affordable and favorable price points. There’s only one thing standing in a potential buyer’s way:
3. A lack of inventory
The inventory of homes for sale was low even before the pandemic hit. It’s even lower now since many sellers pulled their homes off the market and have been slow to list them again. Nationally, the supply of existing homes for sale at the end of May was nearly 19% lower than the same time last year. While locally, inventory also decreased by 20% year over year (YoY) and has decreased every month on a year-over-year scale since 2016.
What does all this mean for you?
In short, it means we are back in a strong seller’s market. Pent-up demand and low mortgage rates mean there are many buyers on the market. On the other hand, low inventory means much of that demand is not being met, which is causing the months of inventory in the valley to drop to 3.2 months (under approximately six months of inventory indicates a seller’s market in most cases).
As a result, prices are rising, bidding wars are becoming common in certain communities and at certain price points, and homes are selling quickly. If you were to sell in the current market, you’d have a great shot at selling for top dollar and in record time. Buyers, you can take advantage of the lowest interest rates on record and everything you know the beautiful Coachella Valley has to offer, including:
- Beautiful weather and views
- Beautiful golf courses, and many opportunities for tennis and pickleball
- World-renowned events
- Wonderful restaurants and resorts
- Some of the most affordable low-density housing in Southern California
Like I said, right now might be a unique moment. It’s not clear how long this situation will last. As more sellers start listing their homes, we may see some balancing out between supply and demand.
If you are considering selling your home, you can start by simply finding out what you could get for it in the current hot market. An easy way to do this is with the following home value calculator, which takes into account recent area sales:
If you are curious about selling your home or simply have questions about the current Coachella Valley market, give the agent you are working with on our team a call. We are talking to buyers and sellers all day long and have a great feel for changing market conditions, which we are happy to share with you.