Our local real estate market watchers, Market Watch LLC, have just released their February 2018 Coachella Valley Desert Housing Report. Some of their findings are:
The Coachella Valley detached home median price stood at $390,000 in February versus $345,000 at this time last year (an increase of roughly 13%). Market Watch noted that price indicators like this are pointing to a strong market this year.
The Coachella Valley attached home median price reached $259,500 in February versus $240,000 in February 2017 (an increase of roughly 8.1%). Based on previous years’ price trends, Market Watch is predicting another two or three months of strong prices. They note that one motivating factor for buyers is that attached home prices have not risen for three years now, while they have in other areas of the state, which makes current prices look “cheap” in many outside buyers’ eyes.
In terms of median price by city, Palm Springs’ median detached price is now 5.8% above its 2006 bubble high while two other cities (Cathedral City and Indio) now have city wide detached home median prices less than 20% off of their 2006 bubble high prices. Five cities (Desert Hot Springs, Palm Desert, Palm Springs, Cathedral City and Indio) showed double digit year-over-year gains in detached median prices. Five cities (Desert Hot Springs, Cathedral City, Indio, Rancho Mirage and Palm Springs) showed double digit gains in their attached homes median prices. However, when it comes to the attached home median price by city, none of the Coachella Valley’s cities are less than 30% off of their 2006 bubble high prices
With respect to home sales, the average of twelve month total sales in February was 839 units (an increase of 11.7% over last year). This means that means that over the last 12 months, total monthly sales averaged 839 units. This equates to annual home sales of 10,068 units a year, which is the highest rate since the recovery began. In February, the 12 month average of detached home sales were 542 units (64% of total sales) and attached sales were 298 (36% of total sales).
Seven cities (Bermuda Dunes, Cathedral City, Desert Hot Springs, Indian Wells, Palm Desert, Palm Springs and Rancho Mirage) showed higher three month sales compared to a year ago, three (Coachella, Indio and La Quinta) showed lower sales and one city, Thousand Palms, had the same sales. Market Watch singled out Rancho Mirage with a 41% increase in home sales year-over-year and Desert Hot Springs with an increase in home sales of 32% year-over-year.
As prices rise and the inventory of lower priced homes and condos shrink, sales for homes priced under $200,000 were down 12% year-over-year while sales of homes priced between $200,000 and $300,000 were down 12% year-over-year. Home sales for homes priced above $300,000 were up substantially, with sales of homes priced between $300,000 and $400,000 were up 21% while sales of homes priced between $400,000 and $500,000 were up over 46%.
The Coachella Valley housing inventory rose 218 units in February to 3,843. Market Watch pointed out that this was the lowest March inventory number since March 2013). In Market Watch’s opinion, the continual decline in inventory, which has been in effect now since the spring of 2016, is turning the Valley’s housing market into a sellers’ market; a market where sellers are more in control of prices than the buyers. They went on to state that this transformation in the market should continue to put upward pressure on home prices in the region.
Market Watch noted that the transformation of the region’s housing market into a sellers’ market is best seen by looking at the month of sales ratio. On March 1st, it reached 4.7 months, the lowest ratio since March 1, 2013. This is confirmed by the continual low number of days on the market at 66 days, which is four days less than March 1, 2017.
Market Watch felt that the strong improvement in months of supply is also best seen in the months of supply by price range, which compares the current ratio to a year ago by price brackets. Every price bracket shows vast improvement over a year ago except for homes priced from $800k to $900k.
Market Watch also saw a strong improvement in the months of supply ratio of every city except Coachella and Desert Hot Springs (even though the ratio in Desert Hot Springs did decline, the decline was marginal). Only three cities have ratios over 6 months (Rancho Mirage, La Quinta and Indian Wells), with the first two only marginally above it. They also noted that they felt the strongest improvement was in Palm Desert, which has generally been lagging behind the other cities in price gains the last three years. They are calling for some strong price improvement in Palm Desert this year.
The data contained in this market update is produced for Coachella Valley Real Estate Agents through the sponsorship and cooperation of the Palm Springs Regional Association of Realtors® (PSRAR) and the California Desert Association of Realtors® (CDAR) by Market Watch LLC.