Seeking Market Forecast for Buying in Joshua Tree, CA area

[Joanna Joy Seetoo]

Hello!

I know there's no crystal ball or magic bean but I've been reading all the great advice that gets posted here and as a newbie I am hoping I might be able to get some guidance. I have recently been to Joshua Tree/Yucca Valley/Twentynine Palms area twice in the last two months as I just love it there and am considering buying property to have a second home. Ideally I'd like to buy something with a few acres to build an art studio for multi media work, gallery and perhaps a few small cabins for people to visit with us. 

I have been seeing prices dropping and I'm wondering if this is just a momentary reprieve or are we going to see them continue to slide down for awhile longer.  I would be using a mix of cash and pulling equity from my home so ideally I can maximize my investment dollars as much as possible. 

Any advice would be greatly appreciated!

Thank you!

[Jason Kudo]

Quote from @Joanna Joy Seetoo:

Quote from Melanie P.

Real estate prices fluctuate, up and down. We are currently in a down trend that I expect to last three or more years. If you're building a commune complete with art installations, cabins, etc. whatever you're seeing in the market is totally irrelevant to where your project will be 10 years in the future, completed. 

 Thank you Melanie! I appreciate your reply. Yes I think the project I want to create is definitely a longer term project. I guess my question would relate to the wisdom of pulling the trigger now and paying more for a property that could well be purchased for significantly less in another 3-6 months or maybe even longer if the down trend is expected to last a few years. I can still build equity in my primary home in the meantime. 

 Hi Joanna, realtor here that does a lot of business in the Southern California High Desert. 

The reality is that homes appreciated very quickly in the High Desert and we are still, for the most part, in a correction. A lot of buyers in the past couple years purchased with the intent to rent their homes on a short-term basis (Airbnb) which caused prices to shoot up and for one reason or another, a lot of these buyers are deciding to cash out which is creating a large inventory of homes in residential neighborhoods and putting downside pressure on home prices.

We are definitely seeing home prices in residential neighborhoods coming down a lot and with the high level of inventory, there seems to be more room to come down.

Home prices on acreage in the more affluent parts of Joshua Tree and Yucca Valley (south of the 62 Highway) are slower to come down. I think mostly due to unrealistic sellers holding onto the home values of a couple years ago. We are still seeing many of these homes being listed for 100%+ over what they purchased a couple years ago.

As a buyer, the positive is that the good majority of leveraged Airbnb investors have moved on from Joshua Tree leaving mostly cash buyers and if buying now, you should have a lot of leverage to negotiate with since the competition has thinned out.

Mortgage interest rates move with the Fed and the general consensus is that there will be possibly only one rate cut this year in Q3 or Q4 with no more cuts until next year. With lower mortgage interest rates comes increased competition so the sweet spot may be sometime towards the end of this year.

That said, if you see a property you like, the best advise is to shoot your shot and submit an offer that makes sense to you and if they bite, you win and if they don't, you didn't lose.