Perspective on Palm Springs & La Quinta's Real Estate Market

Greg Berkemer • Special to The Desert Sun • December 6, 2010

This is a good article by Greg Berkemer, Executive Vice President of the California Desert Association of Realtors. Greg offers sensible advice on buying real estate in the Palm Springs and La Quinta area and puts the current real estate market into perspective.

The housing market in Palm Springs will recover, but prices won't. At least not right now. If housing prices take off again in an unchecked upward push then the boom and bust cycle starts all over. A healthy sustainable recovery occurs when housing values improve steadily over time, such as 3 percent to 6 percent per year.

Market Strategies Reconsidered

Buy today, raise the price, and sell tomorrow is not a strategy. It's a market condition. Buying more house than you can afford and hoping it goes up in price before the interest rate adjusts isn't a strategy either. Just ask anyone who is losing their home.

Here is a strategy that works: Be honest with yourself and the bank. Buy a house you can afford. Turning it into your home is the reward, and a great long-term investment is the bonus.

Market Realities Reaffirmed

Housing is shelter from a storm - not the marketplace. The market is hugely rewarding and unfairly harsh all at the same time. It just depends on which line you are standing in. When your strategy is solid, and you buy for the right reasons you'll be standing in the right line.

So what does market recovery look like? It's not about price or number of properties for sale. It's about fair market value. Right now foreclosures and short sales are taking up most of the space. When the marketplace is once again dominated by buyers and sellers meeting in the marketplace because they want to - not because they're forced to - recovery has arrived.

It's Not About Starting Over, It's About Where You Start

And where you are is in a housing market with the lowest prices and interest rate in years. When you find the house you want, in the area you want, with the amenities you want, at a price you can afford with a loan you can qualify for - that's the bottom of the market for you. When you buy the house that's right for you and your family how long this current market lasts, whether it's 2 years or 5 years, no longer makes a difference.

Don't Just Work Your Plan, Work the Market

Knowing where you are headed is important. Arriving is even more so. Putting together your plan to buy or invest may take a couple hours - where to look, how much to spend, what features are required and which are just nice to have. Spend your time learning the area, neighborhood, property values, and creating absolute clarity around what you want. You won't have to look at many houses to know it when you see it. Ready aim, ready aim, ready aim is for lookers not buyers.

Five years from now, when asked "when is the best time to buy a house," the answer will be ... five years ago. The road ahead may be uneven and have its share of starts and stops, but it's going to be a great ride. Don't miss out.

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