The two stages of the housing recovery in the US and in Palm Springs, CA
Are we in a full-blown recovery?
Are we really there and what does it mean to buyers and sellers? This article will attempt to look at both sides of all the market studies going on right now. Studies being made to determine where we are in what is still being called the biggest housing bubble burst ever. And note the data for this article comes from a lot of varied sources; not just the National Association of Realtors. NAR is known at times to paint a rosy picture.
We will be looking at:
- The two stages of the housing recovery - sales & prices – and where we’re at in the process.
- Where prices are over the next 6, 12, & 18 months.
- If the weak global economy and the uncertainty of the upcoming election will impact consumer confidence in real estate?
So what are two stages of the housing recovery? Why are they important and how are they related?
The way a buyer and seller feels says what is happening in the market place. The tricky part is how does that compare in Palm Springs? And as sales come back, as houses come on the market, as sales proceed, will prices come back too.
First lets look at the sales side. Available homes for sale. Up or Down?
Looking at sales- There is plenty of evidence that proves we are at the recovery point. We have new home construction on the rise and listings are beginning to increase in some areas of the US (more about Palm Springs later). Buyers coming out again and showing up at open houses and they are buying the new homes being built.
Once again, the housing industry is helping to boost the economy because not only does a turn around in sales bring jobs via the builders, but it also generates sales when people move in and begin to furnish and trim out those homes.
Next we have to look at prices too. Are they rising, or are they steady or are they still going to drop? More so, is it the time to buy?
Prices are dependent on supply and demand. Low inventory, prices will rise. Too many available homes and prices will drop. Nationally, the numbers show prices are steady because we have a steady supply of homes for sale(again, in Palm Springs, that is not the case) but not so many as to cause a drop in prices.
Palm Springs? All sales reports are showing the bottom has been hit. Prices are firm and in may cases have begun to rise. Why? We show a low inventory which explains why prices are firm and have risen just a bit. And of all the data out there, asking all the experts, the average of all the responses says that prices will begin to rise over the next few years.
The charts in this gallery will show you expected price appreciations over the next few years and will also show how low mortgage interest rates affect your monthly payment and the amount you pay over a 30 year loan based on a $250,000.00 home.
So what can we tell you as a buyer?
(Forget for a moment all the things you hear from the TV experts or your great-uncle, OK?)
Interest rates are still are record lows but as the recovery gets under way over the next couple of years, that will change
We are back to 2001 prices for the most part. But here is the BIG difference. Interest rates. The latest rates are about 3.76% which are historic lows for sure. So for a 250,000.00 house could mean almost 500/ month less and 176,000 less over 30 years. Not exactly chump change I’d say.
The complete information for this post is HERE
The chart below tells us that inventory is at a low point in Palm Springs and according to the experts, this will always have an upward push on prices. We expect that to turn a bit this winter as more homes come on the market but expect that sellers will be pricing them higher than last year.
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