The local real estate market experts at Market Watch LLC just released their March Desert Housing Report. Not surprisingly, it starts with a section titled "The Coronavirus Changed Everything". Some highlights:
The Coronavirus Changed Everything: Market Watch began the March Desert Housing Report by stating that it reflects the Coachella Valley’s housing market through the end of March. Because the data uses three-month averages to reduce monthly variance, the prices and sales shown are the average of January, February and March (before the coronavirus crisis). So, it shows a very healthy housing market, with one of the strongest outlooks that Market Watch has seen. However, everything changed on March 18th, when the California statewide stay at home order came into effect. Market Watch recognized that the metrics for normal housing markets won't work well during this crisis and so are developing custom metrics specifically for it. Primarily, the measurements will be much shorter in duration, so they will show rapid changes in the market. An example of this is shown below:
Market Watch noted that pending sales (where a property is under contract and all contingencies have been removed) precede real sales by about 14 days. The chart above plots a four-week (28 day) moving average of sales against a four-week moving average of pending sales (with the pending sales moved forward two weeks). The chart shows the rapid drop in pending sales since Governor Newson issued the state's stay at home order. The red line in the chart, which is pending sales moved forward two weeks, points to where real sales (blue line) will be in about two weeks. Currently real sales are averaging 28 units a day; by April 17th they should be under 20 units.
Coachella Valley Median Detached Home Price: The Coachella Valley detached home median price in March was $431,200 (an increase of 3.9% year-over-year). The detached home median price has been rising along a 4.25% growth curve for the last six years. Market Watch noted that it is normal for detached home median prices to increase between 4 to 5 percent per year, which shows that our market is not experiencing any price excesses as a number of writers have spoken about. Market Watch also noted that before the coronavirus crisis, detached home median prices were following the usual seasonal pattern of prices peaking sometime in May and dropping by the end of summer.
Coachella Valley Attached Median Price: The Coachella Valley’s attached home median price in March was $294,708 (an increase of 1.6% year-over-year). Market Watch pointed out the very strong seasonal pattern in these attached home median prices, with the seasonal change ranging from 10% to 15% from top to bottom just due to seasonal factors. Market Watch did note that this pattern will probably be interrupted by the current situation.
12 Month Change In City Median Prices: The changes in detached home median prices by city in March ranged from +11% in Desert Hot Springs to -20% in Indian Wells. Seven cities showed positive gains while two, Rancho Mirage and Indian Wells, were negative. The detached home median price in Palm Springs was 13% over its all-time price high in 2005/6. Changes in attached home median prices in each city showed wider variation. If Desert Hot Springs is ignored (because it only has a few attached homes), changes in attached home median prices ranged from +6.3% in La Quinta to -17.5% in Rancho Mirage.
Monthly Sales – Three Month Trailing Average: Total home sale over the last three months (short enough a period to show seasonality and long enough to dampen meaningless monthly changes) were 761 units per month in March (an increase of 3.6% over the total sales of 734 units in March 2019). Detached home sales were 502 units per month (an increase of 3.3% year-over-year) and attached home sales were 260 units per month (an increase of 4.4% year-over-year). Market Watch did note that the fact that March home sales were flat compared to February home sales shows the effects of the coronavirus crisis on the Coachella Valley market (because March sales in past years were higher than February sales).
Home Sales By City: Market Watch noted that the increase in Coachella Valley home sales was not evenly spaced through all the cities. The largest increase (on a percentage basis) was in La Quinta, with 139 units sold (an increase of 27% from 109 units per month in March 2019). Cathedral City home sales were up 23% year-over-year, Rancho Mirage home sales were up 22% year-over-year and Palm Springs home sales were up 8% year-over-year.
Home Sales By Price Range: Market Watch noted that with the exception of home sales in the $700,000 to $800,000 price range, home sales were up in every price range above $300,000. Market Watch pointed out that sales of homes priced over $1 million dollars were up 22% year-over-year.
Coachella Valley Inventory: Inventory on April 1st was 3,043 units (729 units less than the inventory of 3,772 on April 1st, 2019). Market Watch stated that increased home sales and low inventory pointed to another strong year for Coachella Valley housing, before the coronavirus crisis hit.
Days in the Market and Months of Sales: Market Watch noted that on April 1st, the two important metrics, days on the market (54 days on April 1st versus 70 days on April 1st, 2019) and the months of sales ratio (3.7 months on April 1st versus 4.7 months on April 1st, 2019), were both very positive (but did not yet reflect the effects of the coronavirus crisis).
Months of Sales by Price Range: Market Watch noted that month of sales ratios decreased in all price brackets from $200,000 to over one million dollars (with a 35.8% decrease in the months of supply ratio for homes priced above one million dollars).
Months of Sales by City: On April 1st, the month of sales ratio in every one of the Coachella Valley’s nine cities showed improvement compared to one year ago. The largest improvements were in Indio, where the ratio went from 3.8 months down to 2.8, and La Quinta, where the ratio went from 6.1 months to 4.2 months.
Sale Price Discount from List: The March Sale Price Discount from List was -1.9% (down 0.4% year-over-year), which implies that an average home in the region offered at $400,000 sold for $392,400.
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