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It’s the start of May and our local real estate market experts, Market Watch LLC, have just released their April Desert Housing Report. We wanted to share some highlights below:
The Coachella Valley detached home median price in April was $559,750 (an increase of 27% year-over-year from $440,000 in April 2020). Market Watch’s take on this was that record low inventory and record high sales were the two conditions driving home prices higher in every city. In addition, the Coachella Valley detached home median price is now significantly higher than the previous all-time high median prices reached during the bubble years of 2004 and 2005.
The Coachella Valley attached home median price in April was $349,900 (up 17% year-over-year from $299,000 in April 2020). Market Watch noted April was the 10th consecutive month of increasing attached home median prices. They also noted that the Coachella Valley attached home median price is approaching the all-time high attached home median prices reached in the bubble years of 2004 and 2005.
Every Coachella Valley is experiencing a healthy increase in both detached and attached home median price prices. Detached home median prices increased by over 30% year-over-year in Indian Wells, Rancho Mirage, Palm Springs and Desert Hot Springs. In addition, the detached home median price is now above the previous record highs reached during the 2004 and 2005 bubble years in every Coachella Valley city except Rancho Mirage and the City of Coachella. Attached home median prices increased by over 20% in Indio, La Quinta and Indian Wells. The attached home median price is still below the previous record highs reached during the 2004 and 2005 bubble years in all seven of the Coachella Valley cities surveyed.
The three-month average of total Coachella Valley home sales in April was 1,276 homes per month (an increase year-over-year of 63.2% from 782 sales per month in April 2020). Sales of detached homes averaged 776 homes per month in April (an increase year-over-year of 41.3% from 549 homes in April 2020). Sales of attached homes averaged 500 homes per month in April (an increase year-over-year of 114.6% from 233 homes per month in April 2020).
The twelve-month average of total Coachella Valley home sales was 1,050 homes per month (an increase year-over-year of 31.6% from 798 homes per month in April 2020). The twelve-month average of detached home sales was 688 homes per month (an increase year-over-year of 25.5% from 548 homes per month in April 2020). The twelve-month average of attached home sales was 363 homes per month (an increase year-over-year of 45.2% from 250 homes per month in April 2020).
Market Watch analysis focused on the fact that sales increase in the cities typically considered as more working class or employment oriented were much lower compared to the sales increase in the more second home or resort cities of La Quinta (sales up 77.4% year-over-year), Palm Desert (sales up 72.5% year-over-year), Palm Springs (sales up 48.4% year-over-year) and Rancho Mirage (sales up 85.7% year-over-year). Market Watch’s conclusion was that the increase in Coachella Valley home sales was primarily due to buyers from outside the region rather then from local households moving from rentals to homeownership.
Market Watch commented that the largest home sales increases were occurring in the middle to higher price ranges. They noted that sales of homes priced under $300,000 (primarily condominiums) showed little increase in sales. The largest sales increases were for homes priced over $400,000. In particular, sales of million-dollar plus homes increased year-over-year by 190.8% to 189 home sales per month from 65 home sales per month in April 2020.
Coachella Valley housing inventory on May 1st was 710 homes (a decrease year-over-year of 76.2% from 2,982 homes on May 1, 2020). Market Watch stated that this collapse of selling inventory is responsible in large part at least for the huge, upward movement in home prices. Market Watch noted that there are just far more homebuyers than home sellers (in part due to a reluctance on the part of many homeowners to list their homes during the pandemic). They do expect this reluctance to fade once the vaccines are more widely distributed and administered.
With increased sales and deceased inventory, the months of sales ratio (the time that it would take to sell the entire housing inventory at the current sales rate) fell to 0.7 of a month or three weeks on May 1st. The median number of days in the market in April was 34 days (compared to 53 days in April 2020).
The spread between the months of sales ratios in May and May 2020 shows that housing demand continues to far exceed supply. The months of sales ratio in every price range under $900,000 was again less than one month. The lowest ratio of 0.4 of a month was for homes priced between $200,000 and $400,000. For homes priced over $1 million, the months of sales ratio was 1.6 months.
On May 1st nine of eleven Coachella Valley cities surveyed had months of sales ratios less than one month. The city with the lowest ratio was Indio at 0.5 months, followed by Palm Desert at 0.6 months and Cathedral City, Palm Springs, La Quinta, Rancho Mirage and Bermuda Dunes all at .7 months. The highest months of sales ratio was in Desert Hot Springs at 1.1 months.
The median value of the sale price discount from list in April was 0.0%, which implies that an average Valley home offered at $500,000 sold for exactly $500,000.
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