The middle of July is always hot in the desert, but we seem to forget how hot it really is! It has been 114-115 degrees for the past several days and it will be the same for the next week, and hot all the way through August. This is the main reason real estate sales shift into slow motion during the summer.

But, there is always some business being done! I opened escrow on a home in Rancho Mirage this week, and I am preparing an offer on a home in La Quinta, both priced above $1 million. But, these sales, as well as most of what is selling this month, involve very serious sellers who are willing to take a lower price than they would have in the past.

So, how is the market? In the low-end market, there are multiple offers on the bank owned properties, and that market is active. But, prices have dropped 50% in some areas, leaving many people owing more than their homes are worth, possibly setting up the next wave of foreclosures.

In the high-end market, a larger percentage of the properties that are selling are bank owned properties also. Almost all of the buyers are looking for a deal, so they are attracted to the bank owned properties. And, the longer sales remain sluggish, the more high-end properties will be affected. There are also some sellers who are not financially distressed, who will make the decision to ‘sell at market value’ much like the stock market.

The good news is that this is happening during the normal ‘off season’ in the desert. November is almost four months away, and there is plenty of time for the economy to stabilize for our ‘high season’. There is no way to be sure what will happen, but many sellers have taken their homes off the market for the summer, and will reassess in the fall. At least there will be good weather and a larger number of potential buyers.

This month I have included the following items you might find interesting:

•	‘Signs of Life in Jumbo Lending’ This article from Inman News takes a look at the improving jumbo loan market.
•	‘Keeping Up Appearances’ This Wall Street Journal article is about high-end homes in England that are bought for investment and just sit empty.
•	‘How Long Should it Last?’ This National Association of Realtors study tells of the average useful life for many household materials.
•	5 Bank Owned Homes for Sale above $1 million in the Desert: 3 in La Quinta and 2 in Palm Springs. There are 7 bank owned homes in escrow, making this an active market.
•	The 10 Most Expensive Homes Sold in the Desert in June 2009: According to the Desert Area MLS, these 10 homes ranged in price from $1.7 million to a $7 million sale at Bighorn. These closings represent sales made in April & May. 2 were at Bighorn, 2 at the Hideaway, and 1 each at Mission Hills CC, Tradition Golf Club, Desert Horizons CC, The Estancias in LQ, Alta in PS and Desert Springs at The Marriott, PD.
•	Mortgage rates as of 7/15/09.

I hope you find this information informative and helpful. Please contact me with any input or questions you might have, 760.779.1653 or send an email to Bruce@BruceBlomgren.com.

Sincerely,
Bruce