By Bruce Cathcart, Broker/Co-Owner of La Quinta Palms Realty
You wouldn’t buy a new or used car without taking it for a test drive. We all want to see what kind of condition it’s in and how it performs in all kinds of weather and road conditions. If you are really serious about a specific car you can even rent one for a few days to really get to know whether or not it is the car for you. So why is it that most of us don’t have that same mind set when it comes to buying a house or condo? Okay, before you say it… some houses actually do come with wheels, but I’m not talking about actually taking the home out for a spin here. But there are several situations that it makes perfect sense to rent a home before actually purchasing a home. In fact this year I have noticed that to be a growing trend here in the Coachella Valley and, quite frankly, a lot can be learned from these folks that are employing this strategy for relocating to the desert and eventually purchasing a home here… or not.
Before I share with you some examples of how this rent before purchasing strategy might benefit you or someone you know, let’s take a quick look at the real estate sales activity for the month of April. As a reminder, the number of homes sold in 2014 was 11% fewer than in 2013. The idea here is that we need to sell MORE homes than last year to support a recovery of the real estate market. If we sell fewer homes this year than last year, then obviously our market is NOT going in the right direction! So far 2015 is off to a slow start with total sales for the first quarter still lagging behind last year’s numbers. We were all hoping for a strong March to make up the difference. Here’s what happened.
According to the Desert Area MLS (as of 05/01/15) there were 1,012 pendings of residential properties here in the Coachella Valley in April. There were 1,024 pendings in the previous month (March) which means activity was still good following our normal seasonal sales pattern. Checking the pendings from April of last year (2014) there were only 879 pendings for the month. That’s good news for May closings and suggests that we will likely exceed last year’s sales in May but the difference will not be large enough to keep up with last year’s sales numbers. This will mean another year of overall declining sales for homes in the Coachella Valley unless our sales numbers continue to rise in May and June, which is unlikely. Checking the actual sales data, in March there were 777 solds and in April we rebounded with 857 solds. A nice increase to be sure, but unfortunately this is slightly LESS than a year ago when in April 2014 there were 870 solds. So, as was predicted last month, the little gain in solds for March was lost in April and we continue to fall behind last year’s total solds. Our inventory of homes for sale dropped slightly for the second month in a row with 4,934 homes available as of May 1, 2015 compared to 5,054 at the beginning of April. This is still 800 MORE homes on the market compared to the same time last year. Unlike many other locations in Southern California, the lack of inventory is not a reason for the current lack of sales in the Coachella Valley. With our selling season quickly coming to an end I hate to say it, but right now our real estate market here in the Coachella Valley is not on the road to recovery.
Working here in the Coachella Valley affords me with the opportunity to work with people from all over the world who think they want to come and live here and enjoy the lifestyle and all the other great things that our desert has to offer. I get to help folks looking to retire here, purchase second homes, and also those individuals or families who are transferring into the area for work or simply to improve their quality of life. In most of these instances they come here with limited knowledge of the area and rely on what they have learned from the internet, their friends and of course their trusted real estate agent. Now I am not saying it is true in all cases, but under these circumstances wouldn’t it make sense to take a “test drive” before purchasing a home here? Sometimes we forget that we live in a resort area which means that almost every neighborhood, gated community and country club has vacation rentals available for short term leasing. Not sure if you want to retire to Sun City or The Trilogy? How about the Cathedral City Cove or La Quinta Cove? Whatever your budget or desired location there is probably a fully furnished house or condo out there for you to rent and really see if it is the place for you. Not sure you can handle the heat in the summer? The good news is that monthly rates drop dramatically June through October. So if you are struggling to find the perfect property, not sure about the area, or making the move… take the ultimate test drive and rent a home before purchasing. You’ll be glad you did!
Join me each month this year as we keep a close eye on our Coachella Valley real estate market. If you have a real estate question or concerns please email me at the address below.
Bruce Cathcart is the Broker/Co-Owner of La Quinta Palms Realty, “Your Friendly Professionals” and can be reached by email at email@example.com or visit his website at www.laquintapalmsrealty.com.