In an article from today’s Desert Sun, real estate and business news reporter Amy DiPierro writes that median home prices in the Coachella Valley continued their ascent in the first three months of 2018, and the number of homes available for sale kept dropping. Amy writes that housing inventory is particularly low for homes priced at $300,000 or less, leaving sellers of these homes in a position of power this spring.
Enrique Braunschweiger, President of La Quinta mortgage company First West Financial, is quoted as saying “right now what we’re finding is, in that $300,000 and below range, there is very little room for negotiation, and everything is selling at full price.” He estimates that between 30 and 40 percent of buyers in the Coachella Valley are competing for homes priced under $300,000, with this same segment of the market accounting for as much as 70 percent of buyers in communities like Indio, Coachella and La Quinta. However, according to Denise Goodman, a mortgage loan originator at Franklin Loan Center in Palm Desert, it’s not impossible to buy a house for under $300,000, “you just have to sharpen your tools a little bit…you need an agent that’s looking at the listings every day...you need to aggressively look and you need to be aggressive in the offering.” And it’s recommended that buyers be pre-approved for a loan to show sellers that they will be able to get a mortgage.
At the same time, new home building remains at historic lows in the Coachella Valley. Before the recession, single-family home building in the nine incorporated cities of the valley peaked at 7,800 units in 2004, according to the Census Bureau's Building Permits Survey. Last year, building permits were issued for 775 single-family homes in those same cities, a 90 percent drop from the peak. New home building has remained relatively flat for a number of reasons, including rising building costs and a decline in the number of home builders since many left Southern California during the recession. Fred Bell, president of the board of directors at the Desert Valleys Builders Association, is quoted as saying “to deliver anything, let’s say, $275,000 to $300,000 is going to be extremely difficult…most of the entry-level product you’re going to see is going to be at $325,000 and up.”
To read Amy DiPierro’s original article and view the accompanying photos and infographics, courtesy of The Desert Sun, please visit: https://www.desertsun.com/story/money/real-estate/2018/04/30/cv-home-buyers-competing-dwindling-supply-houses-under-300-000-heres-why/536373002/