This morning I checked the inventory of single-family detached homes in some of the popular neighborhoods of Palm Springs, expecting to see higher numbers even for this time of the year. Active listing numbers should be rising soon, but they are still below normal levels in several key neighborhoods.


As of 9/12/18 (current SFR Active Listings):
  1. Movie Colony East/Ruth Hardy Park- 6
  2. Vista Las Palmas- 5
  3. The Mesa- 5
  4. Sunrise Park- 4
  5. Movie Colony (proper)- 3
  6. Little Tuscany- 3
  7. Twin Palms- 2
  8. Tennis Club/Tennis Club South- 2
  9. El Mirador- 1
Among the above nine neighborhoods combined, there are only thirty-one homes active for sale. Sizable numbers of homes were sold in 2018 and many homes are under contract in these neighborhoods, but there simply are not enough homes to sell currently, and these figures are concerning. 
 
Here are the active listings notated above to view– https://bit.ly/2NbjQda
 

There are other popular neighborhoods that currently have sufficient inventory, but this is generally because of the following reasons:

Land-Lease Properties

There are more obstacles in getting mortgage financing. Most people are used to not paying an additional lease for the land on which their property sits. If the expiration date is less than 30 years away, or if the annual lease is too high, these properties are even tougher to sell. Of course, many properties are sold on leased land, but they will never be as attractive or sellable as fee land property.


Communities Shooting Too High Up in Price

We see it as agents, and buyers see it too- property prices have risen substantially in the past 5 years and “great deals” are no longer available. Prices have risen so much in some neighborhoods that people are reminded of the 2008 crash. Believing that prices are inflated beyond the property’s true worth, these people would rather sit on the sidelines than bet on appreciation. Neighborhoods with ample inventory that is now sitting on the market are proving that buyers are reluctant to spend on a property whose outlook in the near future gives them pause.


Listings Being Priced As If They Were Upgraded/Trying to Hit a Home Run

In a Seller’s market, there will always be aggressive pricing- however, today’s buyer is more informed, and is less prone to an emotional buy. If a home was remodeled 10+ years ago, most buyers will factor in updating expenses. We are seeing homes in neighborhoods with lower inventory being priced as if if they had undergone substantial work, or being priced with a recent sale in mind that is superior in quality, views, etc. We are also seeing properties that were purchased at much lower prices whose owners are not content to receive a lucrative return and are waiting for the “home run” offer. This strategy may backfire, because if the market dips or flattens out they’ll end up chasing the market, racking up days on the market, and quite possibly getting a worse offer than if they just priced the home within range from the outset. These folks think the escalating prices will never cease.

 

There is no doubt that a seller has an advantage when inventory is low in a high-demand neighborhood. Pricing it just under market value can create multiple-offer frenzy and can bring a premium price; pricing the property at market value may still result in multiple offers or at least an offer at or near listing price. If you decide to test the market at a higher price than market, it’s best to have a strategy for creating as much exposure as possible to be able to adjust price sooner rather than later if the market is not responsive. If you are able to get a solid buyer at a price over market value, then you have negotiating room and may be able to achieve a fantastic sale. It is crucial as a seller to make sure you walk through all strategies and demand honest feedback from your real estate agent before deciding on a listing price, because the goal is always to sell for the highest price in the shortest amount of time.