As area residents know, the Coachella Valley is a very special place to live. Since the Covid-19 pandemic began, many people from across the United States are coming here from crowded urban areas to take advantage of the laid-back resort lifestyle and the fact that home prices are more affordable than in cities such as Chicago, Los Angeles, Portland, San Diego and San Francisco.
Last month, one out of every four homes sold for more than its asking price.
The median price at the end of the year for a detached home in the valley was $520,000, which is up 22% for the year, according to the December Desert Housing Report published by the California Desert Association of Realtors.
The median attached home price at the end of the year in the valley was $329,000, up 17.9% for the year.
Attached home prices have been surging for five months now, after trailing the price surge of detached homes. In fact, while detached home prices have stalled somewhat for the last two months, prices for attached homes have continued to advance.
Attached units are now supplying homes in the lower price ranges due to the lack of detached supply.
The median price for attached homes in the Coachella Valley is now at its highest level since 2007.
Major Cities’ Sale and Price Growth
All nine major cities continue to show year-over-year price gains in their median price for detached homes. Six cities show double-digit gains for median detached home prices.
Detached home prices in La Quinta are up 27.5% for the year, while those for Palm Springs are up 22.9%. Five cities show double-digit gains for attached homes.
It should be noted that three cities — Palm Springs, Cathedral City and Indio — now have median prices above their all-time highs made during the housing bubble of 2006.
The city which is experiencing the greatest three-month surge in sales is Palm Desert, with average monthly total sales of 236 units a month. This is 58% more than it was last December.
La Quinta is another city experiencing a surge with sales up 77%. Cities that show smaller increases are Cathedral City, Desert Hot Springs and Indio. The amazing thing about these numbers, the report said, is that this surge in sales is occurring during a seasonal period when sales are usually very weak.
Big Price Gains at $300,000 or Above
When we reviewed sales in different price brackets, the report’s data showed significant sales increases in all brackets over $300,000.
Percentage wise, the largest sales increases are in the brackets between $600,000 and $1 million.
The utterly amazing number, the report said, are sales of homes priced over a million dollars. That is now averaging 130 unit sales a month, which is 170% above last year.
Home Inventory Shrinking, Shrinking
Coachella Valley active listings on January 1st stood at 1,507 units, which is 50% less than a year ago.
Although inventory usually begins to rise in September, this year the pattern changed when inventory declined as we moved toward year’s end. The report concluded that most of the decline is due to owners reluctant to list and expose their homes to prospective buyers during the pandemic.
The “months of sales” ratio measures how many months it would take to sell off the entire home inventory at the current sales rate. At the end of the year the ratio stood at 1.7 months, which compares to 3.7 months at the end of last year. This is the lowest “months of sales” ratio in the history of the Coachella Valley and is due simply to record low inventories and record high sales.
Average “days in the market” is now down to just 38 days.
If you have any questions about the area’s real estate market, please contact Bonnie and Hank Steele.http://bonnieandhanksteele.com/