If you are following the housing market, you may be interested in knowing that sales activity here in La Quinta is starting to pick up some steam, particularly as people start returning to the valley after the holiday season to escape the rest of the winter months.
Many new and returning snowbirds are or have been "renting" for the season, and are now beginning to start looking at buying opportunities. Unlike last year at this time, there is less uncertainly in wondering when home prices will finally "hit bottom". Buyers are now feeling that prices for the most part, have reached a point where the risk of further price erosion has diminished. Or to state this another way, that the potential for upside price appreciation is beginning to outweigh the risk of further downside price erosion. They are (wisely) not looking to turn a quick profit, but rather just looking to buy a winter home here in the desert, without having to worry about continued significant price erosion.
Of course, not every home on the market is priced appropriately, relative to current market values, however the majority are priced at least close enough to market value to "attract an offer, which as most buyers and sellers realize, is the beginning of a dialog in arriving at a mutually agreeable price (as opposed the "take it or leave it" offers from bottom-fishers during the last couple of years).
The fastest-selling homes are still those with the best mix of location, condition, likeable floor plan, and price. Price is still the first thing considered, however most buyers in this area realize that price is not the only consideration. They don't want to end up with a "bargain-priced" home they really don't like, or that is in a community they don't care for, or that does not fit their lifestyle. Fortunately for buyers right now, the inventory of homes for sale is large enough to find the right home, in the right community at the right price.
What's ahead for home prices?
California remains ahead of the nation in market recovery with many first-time home buyers entering the market due to affordable home prices, low mortgage rates, and first-time home buyer tax credits from the state and federal governments. However, credit still is tight and unemployment remains high, which could hinder a full market recovery until 2011.
•· The median home price of an existing, single-family home reached its trough in February, according to data collected by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). In November, the state's median home price rose in year-to-year comparisons for the first time since August 2007.
•· C.A.R.'s closely watched "2010 California Housing Market Forecast," projects that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.
•· Some economists are forecasting another surge of foreclosures in 2010. However, C.A.R.'s economists expect that foreclosures will remain flat this year compared with 2009. In 2008, many lenders flooded the market with foreclosures, and as a result, the state's median price declined by historic levels. By comparison, in 2009, lenders listed properties for sale at a more measured pace, which helped moderate another home price decline.
•· Government efforts to maintain a low interest rate environment have stabilized the market. However, a mortgage analyst at a financial publishing company predicts that rates likely will rise to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent.
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