A new analysis of the Coachella Valley's real estate market in the first three months of 2008 shows home sales dropped 14.8 percent from first quarter last year.
It is an improvement over the 20.6 percent drop the valley experienced between first quarter 2006 and 2007, figures from Real Data Strategies show.
The company, which has tracked real estate trends nationwide for 17 years, provided data to The Desert Sun for the first comprehensive look at the early part of 2008.
The data show that from January through March, 1,405 homes sold in the Coachella Valley.
That's down from the 1,650 sold in first quarter 2007 and 2,078 in first quarter 2006.
But there are signs of optimism. The analysis comes as escrows are slowly rising, which indicates more activity in the local market.
Also, local real estate agents are saying investors, especially Canadians, have shown renewed interest in the desert's housing market.
"There are healthy indications that the market is ready to make some changes," said Sam Schenkl, executive officer of the Palm Springs Regional Association of Realtors.
Real Data's breakdown of the Desert Area Multiple Listing Service revealed some successes:
Sales were up in Indio's 92203 ZIP code, from 41 sales during the first quarter 2007 to 52 sales in first quarter 2008.
In Coachella, 30 entry-level homes sold - a dramatic jump from the 18 entry-level homes sold during the first quarter last year.
Palm Desert attracted the most entry-level buyers, with 218 homes priced under $500,000 sold in the city's two ZIP codes during the first quarter.
La Quinta continues to see the most sales in the upscale and luxury price ranges, where price tags top $750,000.
Experts say challenges remain:
Year-over-year, first-quarter sales are down in each of the four major price ranges: entry-level, move-up, upscale and luxury.
Entry-level homes took the smallest hit, with Coachella Valley sales declining 5.2 percent from first-quarter 2007 to first-quarter 2008.
Several experts say the market remains ripe for potential buyers and investors, but not so great for sellers.
Average homes in the valley are selling for less than 90 percent of the original listing price. A few years ago, the low- to mid-90 percent range was more typical.
Inventory remains high - 9,214 homes were on the market in April, according to the California Desert Association of Realtors.
The number of local homes for sale has ranged from 9,100 to almost 9,600 since November.
But some areas are "pretty healthy," says Real Data president and founder Patrick Veling. That includes the $750,000 to $1million price range.
Still, people "are being a little more discriminating as to what they're buying as a second house out there," he said.
The trends reflected during the first quarter appear to have continued into April, according to local Realtors and monthly figures released by DataQuick Information Systems. May's figures haven't been released yet.
Despite some good news, experts warn it is too soon to declare the the housing slump is over.
"I don't think we can call it right now," said Greg Berkemer, executive vice president of California Desert Association of Realtors.
"This is a housing cycle that is different. It has different causes, it has different cures.
"If the trends continue, then yes, we can look back and say September (2007) was the low point," Berkemer said.
David