The Coachella Valley housing market has started to shift toward a buyers’ market. With inventory approaching more normal levels, the Valley may offer some advantages to buyers while still being quite profitable for sellers.
Buyers Have Negotiating Power
Over the last 2 years home prices have skyrocketed due to low interest rates and a lack of inventory. These price increases pushed many buyers out of the market. On top of this, the recent interest rate hikes have soared close to 7%, further exacerbating the affordability for home buyers. However, a reprieve for buyers may be here now in 2023.
With inventory further normalizing to 2,140 units in the Coachella Valley and the California Desert Association of Realtors forecasting inventory in February to reach 2,500 units, sellers have been reducing prices and buyers now have negotiating power for seller concessions.
At the Jelmberg Team we have seen many of our buyers negotiating with the seller to “buy down” their interest rate to make their mortgage payment more affordable. In the example to the right our buyer’s agent negotiated both a $34,000 reduction in price and $13,000 to permanently buy down their interest rate on their loan to 5.99% and a 2/1 buy down to 3.99% in their first year and 4.99% for the second year. With negotiating power like in this example this may prove to be a great opportunity for buyers to enter the housing market with the purchase of a home.
Sellers Still Have Plenty of Equity
So how is this good for home sellers? With buyers asking for more and home prices normalizing what is in it for sellers? Well, despite median home prices reducing to $649,000 in November (down 8.6% from the peak), median home prices from April of 2020 were only $440,000 (only 30 months ago). This is a 47.5% increase in just 30 months! This means most homeowners still have at least $200,000 in equity in homes purchased prior to April of 2020.
If you want to learn more about how buying down your interest rate can make your home purchase affordable, or are interested in how market conditions are affecting your home price, reach out to one of our experienced agents with the contact information provided to the right.
