For the last 7 months or so, buyers and agents have been glued daily to new listings hitting the market. If an available resale property is located in a desirable area, no extreme flaws, and priced ‘close enough’ it is getting sold quickly and over ask in many occurrences. Doesn’t matter about differing price points anymore- the Coachella Valley market is selling property in all price ranges.
Currently I’m noticing the absolute lack of expired or cancelled listings each day especially- maybe 1-2 only per day in each of the desert cities. This is a far cry from a more balanced market where there may be 5x more on any given day. Properties that literally could not sell year after year with multiple agents taking the reins are now selling to very determined buyers.
So the concern is- what happens when almost everything is bought? There is a finite number of sellers right now, and that is shrinking by the day. Generally almost all proven agents are representing maybe half, or even less than half, the amount of listings they typically carry “in season”.
Many of our clients that could sell at a strong profit love the desert though, and they would sell if they could get another property at a lesser price- but they aren’t enthused to move to a much less desirable property, so as a result they are holding. Others that have actually sold, or that are planning to, mostly want to cash out and either invest in a different real estate market or are looking into other investments.
There is always the chance of course we see more sellers come on the market if the prices keep rising as it isn’t showing any signs of slowing. But how many will do that and will it be enough?
If you’re trying to do a 1031 exchange as a seller good luck! The chances to find a property worth exchanging at a price that makes sense is becoming nearly impossible. Especially since so many properties need considerable work, and are being sold at prices that would make you would expect it updated, it is causing the more disciplined type of property investor to pause from buying.
If you’re a property flipper you are literally venturing into communities that have little to no price support and making the case that particular community is underpriced. So far it has shown to be a successful strategy in the past year or so, but they still are communities that have a track record at a lower price for various reasons, so it remains to be seen long term how this will pan out for buyers who purchase flipped properties in these types of communities.
It definitely will be interesting to see how the first half of 2021 progresses for Coachella Valley’s housing inventory- hopefully we can find a way to satisfy the overwhelming buyer demand.
Mike Patakas
CA DRE#01264926
Pacific Sotheby’s Realty
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