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Mike Duncan - CalBRE#01276361

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Weekly Economic Report

by Mike Duncan - CalBRE#01276361

Existing home sales slowed, while new home sales enjoyed solid enough growth to hit a record high, and lay-offs saw a small, unanticipated decline. Existing Home Sales After two months of gains caused by increased purchases by first-time buyers, tight inventory finally caught up with existing home sales. Transactions of existing single-family homes, townhomes, condominiums and co-ops fell 3.2 percent to an annual rate of 5.39 million in July, the National Association of Realtors reported last week. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” NAR Chief Economist Lawrence Yun said. “Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.” Total housing inventory at the end of July rose just 0.9 percent to 2.13 million existing homes of all types available for sale, representing a 4.7-month supply at July’s sales pace. Compared to last year, July’s inventory was 5.8 percent down from July 2015. That narrowing supply pushed prices higher, with July’s median existing-home price for all home types hitting $244,100, which is 5.3 percent higher than July 2015’s $231,800 median price. New Home Sales Meanwhile, new home sales fared much better, with transactions of new single-family homes in July shooting up to an annual rate of 654,000, a whopping 12.4 percent higher than June’s rate of 582,000, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. This marked a nine-year high, and when compared annually, July’s sales were 31.3 percent higher than July 2015’s pace of 498,000. Looking at price and supply, the median sales price of new homes sold in July came in at $294,600, and the average sales price was $355,800. The estimated number of new homes for sale at the end of the month was 233,000, representing a 4.3-month supply at July’s sales rate. “This is a continued sign that demand for new homes remains solid in a low interest rate, low unemployment environment,” said Ralph McLaughlin, economist at real estate site Trulia.com. Initial Jobless Claims Turning to employment news, new claims for unemployment benefits filed by the recently laid off during the week ending August 20 notched down to 261,000, a small decline of 1,000 claims from the prior week’s total of 262,000, according to last week’s report from the Employment and Training Administration. That total was well below the 265,000 claims that the market had expected, and kept lay-offs well below the 300,000-claim mark that economists consider indicative of a growing job market. So far, this is the 77th straight week of claims below 300,000, which is the longest such streak since 1970. The four-week moving average — considered a more reliable measure of jobless claims — fell to 264,000, a 1,240-claim drop from the previous week’s average of 265,250. This week we can expect: Monday — Personal incomes and spending for July from the Bureau of Economic Analysis. Tuesday — Consumer confidence for August from The Conference Board. Thursday — Initial jobless claims for last week from the Employment and Training Administration; workforce productivity and costs for the second quarter from the Bureau of Labor Statistics; July construction spending from the Census Bureau. Friday — August car and truck sales from the auto manufacturers; July balance of trade from the Census Bureau and the Bureau of Economic Analysis; July factory orders from the Census Bureau; August payrolls, unemployment, hourly earnings and average workweek from the Bureau of Labor Statistics.

California Home Sale In July

by Mike Duncan - CalBRE#01276361

July Home Sales and Price Report California home sales and median price decrease in July as affordability crunch puts dent in housing market - Existing, single-family home sales totaled 415,840 in July on a seasonally adjusted annualized rate, down 4.1 percent from June and 5.1 percent from July 2015. - July's statewide median home price was $509,830, down 1.8 percent from June and up 3.9 percent from July 2015. - Year-to-date sales are down from the previous year for the first time in more than a year and a half by 0.3 percent. LOS ANGELES (August 16) - California home sales stumbled in July as low inventories and eroding affordability dragged down the housing market, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 415,840 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2016 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The July figure was down 4.1 percent from the revised 433,600 level in June and down 5.1 percent compared with home sales in July 2015 of a revised 438,230. Home sales remained above the 400,000 pace for the fourth straight month, but sales have declined year over year for the fifth consecutive month. "Despite the tight housing supply conditions that have persisted over the past few years, home sales have stayed relatively solid," said C.A.R. President Pat "Ziggy" Zicarelli. "Even with a shortage of homes on the market, low rates and strong demand have been the norm. Some regions, such as the Bay Area, are seeing an uptick in inventory as high prices are motivating sellers to list their properties for sale. While this could ease the inventory somewhat, supply remains tight, and low affordability is expected to be an issue in the short term." The statewide median price remained above the $500,000 mark for the fourth straight month, but there are signs of an expected slowing in price growth. The median price of an existing, single-family detached California home slipped 1.8 percent in July to $509,830 from $519,410 in June. July's median price increased 3.9 percent from the revised $490,780 recorded in July 2015. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values. More homes being sold at the high end of the market (over $1 million) and slightly fewer sales at the lower end (under $300,000) contributed to the year-over-year gain in the median price. - California Association of Realtors www.car.org

Happy Client

by Mike Duncan - CalBRE#01276361

Zillow Published Review Here is what mimisproule wrote: How likely are you to recommend Mike Duncan? highly likely Rate Mike Duncan on specific characteristics Local knowledge: Process expertise: Responsiveness: Negotiation skills: Summary of their experience We live out of state and Mike was willing to spend a weekend with us driving around showing us what ever we wanted to look at. When we didn't find anything and had to fly home Mike was willing to look at houses for us and send us photos and info. He was very professional and not afraid to say what he really thought of the properties he showed us. The sale went as easy as expected. Service provided Helped me buy a home or lot/land Street address 490 N Calle El Segundo, Palm Springs, CA 92262 Year 2015

Last Week Economic News

by Mike Duncan - CalBRE#01276361
An increase in first-time buyers helped boost existing home sales, while housing starts and permits on new homes saw encouraging growth, and lay-offs continued to drop. Existing Home Sales A welcome influx of first-time homebuyers helped boost sales of existing single-family homes, townhomes, condominiums and co-ops by 1.1 percent in June, to hit an annual rate of 5.57 million, the National Association of Realtors reported last week. Compared annually, June’s existing home sales were 3 percent higher than June 2015’s rate, and were at their highest pace since February 2007. While sales to investors fell to their lowest share since July 2009, first-time buyers represented 33 percent of June’s sales, up from May’s 30 percent, and was the highest percentage since July 2012’s 34 percent. “Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” said NAR Chief Economist Lawrence Yun. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases. “The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market,” Yun added. “The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply — particularly areas in the Midwest and parts of the South.” Looking at price, the median price for all types of existing homes hit $247,700, which was up 4.8 percent from June 2015, and marked the 52nd straight month of year-over-year sales increases. In terms of inventory, the number of existing homes for sale dropped 0.9 percent to 2.12 million units, which represented a 4.6-month supply of homes for sale. New Home Construction In new home construction, building permits issued for the construction of private housing of all types grew 1.5 percent in June to hit an annual rate of 1.15 million, according to last week’s report from the Census Bureau. That said, when compared annually, this was 13.6 percent below June 2015’s pace of 1.33 million. Permits issued for single-family homes grew 1 percent in June to hit an annual rate of 738,000. Starts on construction of private homes of all types expanded a healthy 4.8 percent to hit an annual rate of 1.18 million for the month, but like permits, were still down from 2015, falling 2 percent below June 2015’s rate of 1.21 million. Starts on single-family homes grew 4.4 percent to hit an annual rate of 778,000. “Homebuilding continues to gradually recover from the housing bust that accompanied the Great Recession,” PNC chief economist Stuart Hoffman told the Wall Street Journal. “Demand for new single-family homes is slowly but steadily improving.” Initial Jobless Claims First-time claims for unemployment benefits filed during the week ending July 16 continued to beat market expectations. Initial claims for the week dropped to 253,000, a decline of 1,000 claims from the preceding week’s unrevised total of 254,000, the Employment and Training Administration reported last week. The 1,000-claim drop bucked the market, which had expected claims to hit 265,000. The week marked the 72nd consecutive week of first-time claims below 300,000, which economists consider a level that indicates a growing job market. This has been the longest such streak since 1973. The four-week moving average — regarded as a more stable measure of lay-offs — fell to 257,750 claims, a decline of 1,250 claims from the prior week’s average of 259,000. This week we can expect: Tuesday — Consumer confidence for July from The Conference Board; new home sales for June from the Census Bureau. Wednesday — Durable goods orders for June from the Census Bureau. Thursday — Initial jobless claims for last week from the Employment and Training Administration. Friday — Advance second quarter gross domestic product from the Bureau of Economic Analysis; July consumer sentiment from the University of Michigan.

Real Estate Sales Stats for California

by Mike Duncan - CalBRE#01276361

For release: July 25, 2016 California pending home sales post third straight annual increase in June, C.A.R. reports LOS ANGELES (July 25) – Led by the San Francisco Bay Area, California pending home sales continued their upward momentum in June to post three straight months of annual increases, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. The California housing market remained very competitive, as C.A.R.’s June Market Pulse Survey** reflected a slight increase in sales with three or more offers over the previous year, particularly in homes priced $300,000-$399,000, which climbed from 8 percent in June 2015 to 18 percent this year. Pending home sales data: · Statewide pending home sales rose in June on an annual basis, with the Pending Home Sales Index (PHSI)* increasing 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016, based on signed contracts. With pending sales on a rising trend in the past couple of months, June’s increase should portend for higher closed transactions in July and August. · California pending home sales declined 7.0 percent on a monthly basis compared to May, primarily due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales were down 3.2 percent from May and up 3.0 percent from June 2015. · After trailing behind Southern California and the Central Valley since the beginning of this year, the San Francisco Bay Area led the regions, with pending sales increasing on an annual basis across the state. · For the Bay Area as a whole, pending sales were up 5.1 percent from June 2015 and down 16.3 percent from May. The June increase in Bay Area pending sales suggests a brighter outlook for the region, which had been trailing behind 2015 in closed sales, primarily due to low affordability and tight inventory. An improvement in housing supply during recent months – especially in Alameda, San Francisco, San Mateo, and Santa Clara counties – should alleviate low housing stock in the upcoming months. · Pending home sales in Southern California as a whole rose 3.2 percent from June 2015 and 1.3 percent from May, thanks to year-over-year gains of 5.5 percent in Los Angeles County, 4.1 percent in San Bernardino County, and 1.3 percent in San Diego County. Orange County experienced a 6.0 percent decrease from the previous year. · Pending sales in Central Valley posted a gain of 2.6 percent from the previous year and were down 9.3 percent on a month-to-month basis. Year-to-Year Change in Pending Sales by County/Region County/Region/State June 2016 June 2015 Yearly % Change Kern 75.2 101.3 -25.8% Los Angeles 94.0 89.1 5.5% Monterey 62.6 77.9 -19.5% Orange 76.3 81.1 -6.0% Sacramento 82.1 76.2 7.7% San Bernardino 76.4 73.4 4.1% San Diego 146.2 144.3 1.3% San Francisco 112.3 92.5 21.3% San Mateo 110.0 107.8 2.1% Santa Clara 101.9 98.5 3.4% SF Bay Area 148.9 141.7 5.1% So. California 113.6 110.0 3.2% Central Valley 101.0 98.4 2.6% California 127.3 123.4 3.2% June REALTOR® Market Pulse Survey**: In a separate study, California REALTORS® responding to C.A.R.’s June Market Pulse Survey reported slower growth in floor calls, listing appointments, and open house traffic, indicating slowing market activity. In a reflection of a slowing market, the proportion of homes selling above asking price declined in June. · After reaching an all-time high of 38 percent in May, the share of homes selling above asking price in June dropped to 35 percent, but was up from 33 percent a year ago. Conversely, the share of properties selling below asking price rose to 37 percent from 34 percent in May. The remainder (28 percent) sold at asking price. · For the homes that sold above asking price, the premium paid over asking price rose for the first time in three months to an average of 11 percent, up from 9.4 percent in May but was unchanged from a year ago. · The 37 percent of homes that sold below asking price sold for an average of 11 percent below asking price in June, which was up from 10 percent in May but unchanged from a year ago. · More than seven of 10 properties (72 percent) for sale received multiple offers in June, indicating the market remains competitive. Sixty-five percent of properties received multiple offers in June 2015. · The average number of offers per property dipped slightly to 3.0 in June, compared with 3.1 in May and 2.9 in June 2015. Nearly one-half (47 percent) of properties received three or more offers in June. Homes priced between 300,000-$399,000 and $500,000-$999,000 saw the greatest increase in three or more offers compared to a year ago. · More than one in five (22 percent) properties had price reductions in June, down from 23 percent in May. Twenty-one percent of properties had price reductions in June 2015. · Low inventory, declining housing affordability, and high home prices were the top concerns for about two-thirds (68 percent) of REALTORS®. · While still in positive territory, REALTORS®’ optimism of market conditions over the next year has been waning over the past few months, with the index decreasing to 52, down from 54 in May and 64 in June 2015. Graphics (click links to open): · Pending home sales by region. · Homes selling at/above listing price. · Nearly three-fourths of homes received multiple offers. · Price range of homes receiving 3+ offers. Follow us on Twitter @CAR Media and @CAREALTORS® Like us on Facebook, and check us out on Instagram. *Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008. **C.A.R.’s Market Pulse Survey is a monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month. Leading the way...® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Market Trends in the Palm Springs Area

by Mike Duncan - CalBRE#01276361

Below are the current trends for the Palm Springs Area

 

Curnt vs. Prev Month Curnt vs. 6 Months Ago
  Jun. 16 May. 16 % Change Jun. 16 Jan. 16 % Change
For Sale 4480 5120 -12.5% 4480 5803 -22.8%
Sold 971 920 5.5% 971 582 66.8%
Pended 963 921 4.6% 963 635 51.7%
Date 1/16 2/16 3/16 4/16 5/16 6/16
For Sale 5803 6013 5914 5662 5120 4480
New Listing 1886 1590 1478 1436 1274 1014
Sold 582 598 904 885 920 971
Pended 635 729 916 913 921 963
Months of Inventory (Closed Sales) 10 10.1 6.5 6.4 5.6 4.6
Months of Inventory (Pended Sales) 9.1 8.2 6.5 6.2 5.6 4.7
Absorption Rate (Closed Sales) % 10 9.9 15.3 15.6 18 21.7
Absorption Rate (Pended Sales) % 10.9 12.1 15.5 16.1 18 21.5
Avg. Active Price 708 712 724 723 722 688
Avg. Sold Price 411 434 417 435 410 416
Avg. Sq. Ft. Price (Sold) 208 218 212 215 210 212
Sold/List Diff. % 96 95 96 95 96 95
Sold/Orig LP Diff. % 93 93 93 92 91 91
Days on Market 109 112 117 116 112 111
Median 299 287 304 317 300 300
Table Information

Should I Buy a Home Now?

by Mike Duncan - CalBRE#01276361

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall down the road, while others are convinced that home prices will go up.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, a one point rise in interest rates could cost tens of thousands of dollars over the life of your mortgage!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates while they are still available.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

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Mike Duncan, CRS - CalBRE#01276361
The Duncan Group
78060 Calle Estado Suite 11
La Quinta CA 92253
(760)831-0484