If you follow the news you may be reading headlines right now that give the impression that home prices are going to take a dive. The reality is that this isn’t completely accurate, and headlines don’t provide a full picture into what’s going on. If you have questions about the market and current trends I’m here to help shed some light. Leave me a comment and let’s start the conversation! #thehelpfulagent #home #houseexpert #listreports #house #housingmarket #realestatetrends #icanhelp #themoreyouknow #realestateagent #realestate #househunting
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PRICES
At the end of February the median price of a detached home throughout the Coachella Valley was $617,000, which is a year-over-year gain of 19.5%. The median price for attached homes was $439,250, which is a 12 month gain of 29%. The cities of Rancho Mirage, Indian Wells and Indio have year-over-year increases for the average detached home above 30%.
Eight cities have price gains for attached home over 30%, with La Quinta having a year over year increase of 51.4%.
The high demand for attached homes is due to the lack of detached home supply in the lower price ranges.
SALES
Total sales in February averaged 852 units a month, which is 19% less than last February. While lower than last year, sales are still one hundred units higher than pre-pandemic levels.
Sales of detached home are down 17%, while those for attached homes are down 25% due to continued lack of supply. Compared sales by city, the largest declines are in the four major resort cities of La Quinta, Palm Desert, Palm Springs and Rancho Mirage. Some of this is due to the large price increases in these cities, which naturally reduces the size of overall buying pool.
Cities classified as working cities – Cathedral City, Desert Hot Springs and Indio – generally have sales comparable to year ago levels.
INVENTORY
Inventory continues to hover near record lows and on March 1st was at 607 units. This is disconcerting. The normal seasonal increase in inventory that usually occurs between September and March failed to materialize this year, just like it failed last year.
On March 1st the “months of sales” for the Valley was the same as the last month at slightly more than 2 weeks. A year ago, the ratio was one month. These historically low ratios continue to indicate very low supply and moderate to strong demand – two ingredients for much higher prices.
Even though some home prices have surged, this fundamental ratio strongly indicates that the upward price trend will continue.
DAYS IN MARKET
At the end of February, the median number of “days in the market” throughout the Valley was 29 days, which is two days more than last month. With inventory remaining low and sales staying high, demand continue to keep selling times near record lows.
Palm Springs has the lowest selling time for detached homes at just 21 days, followed by the city of Coachella at 22 days.
In the attached market, Cathedral City have average selling times of just 8 days, followed by Palm Springs at 15 days.
SUMMARY
So, what do all these statistics mean? In a nutshell: Inventory is historically low and prices continue to remain high, and in some communities, continue to rise.
When will this market end? No one knows. We can speculate. Supply and demand, higher mortgage rates, the stock market, and turbulence in the world are factors that can affect the real estate market. Sales can remain high for a period of time or stagnate.
As I’ve been saying for many months – If you’re considering selling your desert home, now is the ideal time. If you’re a buyer, have your funds in place to immediately make an offer when you find a great home.
I’m here to assist you with your real estate needs here in the desert. Feel free to contact me.
Best Regards,
Darlene
The median price for a detached home in the Coachella Valley ended the year at $615,000, which represents a yearly gain of 18.3%. Attached homes ended the year at $403,000, representing an increase of 22.5%.
Breaking down the percentage gains by cities for detached homes and attached homes:
Rancho Mirage 36.6% and 34%
Palm Springs 36% and 30.4%
Indian Wells 34% and 30.6%
Palm Desert 30% and 36.4%
La Quinta 28% and 47.5%
Indio 29.7% and 31.6%
The largest price increase of attached homes was 60.4% in Desert Hot Springs, followed by 42.3% in Bermuda Dunes.
The median number of days in the market throughout the Valley was 26 days. And, there are plenty of properties that sold above asking price within days of listing.
The price increases for sellers are wonderful but it makes if difficult for homebuyers to find homes that meet their wants and needs.
So, who are the buyers?
We still have the retirees and the snow birds, including those in Canada. In the past 2 years there’s been a stunning influx of new homeowners who have fled the dense and depressed cities around the country who want open, spacious and active places like our Valley. The pandemic made many in-office work scenarios impossible, creating a large swath of employees who could work from home. This new work force is younger and many are from California cities. The second-home and investment buyer is still looking out here. Even through various market ups and down, typical for resort communities, real estate investment remains one of the safest places to build wealth.
After a massive jump in home prices since the pandemic, pricing is expected to cool off somewhat, given low inventory and rising mortgage rates. This doesn’t mean there won’t be another increase, it just means home prices may be a bit more modest.
In closing, I’ll again say that if you’re a seller, now is a great time to sell. And buyers, for now, expect to see fewer homes and more interest from other buyers in your selections.
Year-Over-Year Price Increases and Lowest Inventory in History
The median price of Valley detached homes in March was $549,000, which is 27.3% above last year. The attached home median price in March was $345,000, up 15.4% over the last twelve months.
Prices are expected to continue moving higher by following the seasonal pattern of reaching highs in May before pulling back. Seven cities how have median price increases for detached homes over 20%, with two up more than 30%. It should also be noted that five cities have exceeded the historic price highs they made in the year 2006, with two more only fractional percentage points away.
The three-month average of total sales is now averaging 1,129 a month, which is 39% higher than last year. Due to seasonal forces, average could reach 1,200 units, or higher, over the next two months and sales staying in the high range.
Inventory continues to decline and as of this writing, there are 707 units for sale. That compares to 3,034 units a year ago. Continued high sales and lower inventory has again driven the “month of sales” ratio to new historic lows. It is now just 4/5 a month, or just a little over three weeks. A year ago, the ratio was 3.7 months. This lack of supply is causing bidding wars amongst the many home buyers and is the force driving home prices much higher.
If you are considering buying, the time is now. I see the current trend of appreciation continuing for the next few years.
If you are considering selling, now is a great time. Most homes sell within days. Don’t get left behind.
Put me to work for you! Please don’t hesitate to contact me for specifics.
