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In order to show the rapidly changing market conditions due to the Coronavirus and stay at home order, local real estate market experts Market Watch LLC developed shorter term housing metrics, based on 28-day averages, for their August 2020 COVID-19 Desert Real Estate Report. Some highlights:
To show how the Coachella Valley housing market is doing compared to other regions, Market Watch chose to present closed and pending sales data for both Los Angeles County and Orange County. Because average escrow times in these two counties are between 30 to 35 days, when pending and active under contract sales are shifted forward by 35 days, pending sales become a good indicator of closed sales. Market Watch noted that the 3-month surge in sales in Los Angeles County, which began in June, appears to be flattening out (but at a high level). LA County pending sales are averaging 215 units a day (46% higher than the 158 pending sales per day one year ago).
In Orange County, pending sales are 37% higher than one year ago and closed sales are 24% higher. Market watch questioned whether this is just a post quarantine snapback that is beginning to fade or the beginning of a longer-term housing expansion.
In the Coachella Valley escrow times for detached homes average 20 days, so pending sales are shifted forward 20 days to estimate what closed sales will be. In August, pending sales of detached homes averaged 22.5 units a day (up 36% from the 16.5 daily pending sales one year ago). Market Watch noted that single-family residence sales are beginning to flatten out like they are in other California regions.
Closed sales of condos in the Coachella Valley in August averaged 7.8 units per day (5% above one year ago). Pending sales averaged 8.4 units (up almost 45% from 5.8 units one year ago). Market Watch thought this would mean that closed condo sales in September should rise another 15% over August levels. However, condominium sales in the Coachella Valley appear to be flattening out after the post-quarantine surge (like condo sales in other California regions).
Average weekly pending sales of detached homes in August increased year-over-year by 139% in Rancho Mirage, 62% in Palm Springs and 54% in La Quinta. Average weekly pending sales of condos increased year-over-year 108% in La Quinta, 67% in Indian Wells and 60% in Palm Desert.
Year-over-year, detached home average square foot prices increased 13%, while attached home average square foot prices increased 11%. Market Watch was of the opinion that this trend will continue and possibly even accelerate.
Detached home average square foot prices experienced double-digit increases in all of the Coachella Valley cities, with the exception of Cathedral City (with a 0.1% decrease in average square foot price year-over-year) and Rancho Mirage (with a 0.6% increase in average square foot price year-over-year).
Total Coachella Valley housing inventory on September 1st was 1,959 units (compared to 2,645 units on September 1st, 2019). Market Watch noted that housing inventory has decreased by over a thousand units since the beginning of the California stay at home order on March 19th. Market Watch felt that seasonal pressures should begin to raise the inventory level in September and October. They further noted that low inventory has been putting strong upward pressure on home prices throughout the region.
The average number of daily new listings has risen to 37 units a day (compared with 14 units one year ago). Because home sales have also been rising, the increase in new listings has not yet translated into increasing inventory, but if home sales begin to slow, the housing inventory should increase. The average number of daily canceled and expired listings in August was 10 (compared to 12 one year ago).
The average number of days in the market for detached homes in August was 80 days (compared to 77 days one year ago). The average number of days in the market for condos in August was 81 days (compared to 69 days one year ago). Market Watch pointed out that condos, being much lower-priced, are taking just about as long to sell as detached homes, which are significantly higher priced. They felt that this indicated that the Coachella Valley condo market is struggling somewhat.
Market Watch noted that the average sales price discount for single-family residences has decreased from roughly 3% at the end of June to 2.2% at the end of August. The average sales price discount for condominiums has decreased from roughly 3.4% at the end of June to 2.6% at the end of August.
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