Our local residential real estate market experts Market Watch LLC have just released their August 2021 Desert Housing Report. Some highlights:
Coachella Valley August Detached Home Median Price: The median price of a detached home in the Coachella Valley in August was $581,500 (up 17.47% from a median price of $495,000 one year ago but also down almost 3% from the detached home median price of $599,000 in June and July of this year). Market Watch expressed the opinion that the major housing metrics are beginning to return to more normal values (but at a much higher price level than in the past) and that we appear to have entered the traditional seasonal period when prices of detached homes generally begin to soften after the historically strong winter and spring period.
Coachella Valley August Attached Home Median Price: The median price for an attached home in the Coachella Valley in August was $373,500 (up 29.24% from a median price of $289,000 one year ago but down 2.54% from the attached home median price of $383,250 in July of this year). Market Watch noted that this is the first time in many years where the year-over-year gain in the attached home median price was higher than the year-over-year gain in the detached home median price. They felt that the reason was that attached homes are now filling the supply void of detached homes at lower price points. However, they also felt that as was the case with detached homes, we are now entering the traditional seasonal period where there will be some attached home median price retrenchment.
Coachella Valley August 12 Month Change in City Median Prices: Four cities experienced year-over-year increases in detached home median prices over 30% (Indian Wells, Rancho Mirage, Desert Hot Springs and Indio). Significantly, detached home median prices in all cities other than Rancho Mirage and La Quinta exceeded the previous all-time high median prices set in 2006. Three cities experienced year-over-year increases in attached home median prices over 30% (Indian Wells, La Quinta and Rancho Mirage). Attached home median prices in all Coachella Valley cities are still at or below the previous all-time high median prices set in 2006.
Monthly Home Sales (3-month moving average): This chart clearly shows that detached, attached and total home sales have been slowing over the last three months. Market Watch felt that some of this decline was seasonal in nature but that some of it also represented a slow return to a more normal market. Total monthly home sales of 976 homes in August were only 3.3% above the 945 total monthly home sales in August 2020 (which marked the start of last year’s home sales surge). Market Watch felt that this reflected the difficulty in sustaining the previous all-time high home sales volumes.
Monthly Sales (12-month moving average): The 12-month average of home sales, which takes out all seasonality, shows total sales in August averaging 1,110 units (up 43% from the August 2020 average of 771 home sales). This increase appeared to be equally distributed between detached and attached homes. Market Watch noted that these high average home sales numbers appear to be slowly decreasing and they expect average home sales to approach more normal levels over the next year.
Home Sales by City: Market Watch noted that home sales by city clearly show the overall home sales slowdown throughout the region. August average home sales increased year-over-year by 41.9% in Desert Hot Springs, 41.7% in Bermuda Dunes, 27.4% in Cathedral City & 7.3% in Palm Desert.
Home Sales by Price Range: Home sales by price range show sales of homes under $400,000 at considerably lower levels than in August 2020, due to lack of supply of houses in this price range. Average sales of homes priced between $400,000 & $500,0000 increased by 21.6% year-over-year, sales of homes priced between $500,000 & $600,000 increased by 27.7% year-over-year, sales of homes priced between $600,000 & $700,000 increased by 34.4% year-over-year and sales of homes priced between $700,00 & $800,000 increased by 24.5% year-over-year. By far the largest sales increase was in homes priced over $1,000,000 where sales increased by 49.5% year-over-year. Market Watch speculated that this may reflect the demand from higher paid work from home buyers.
Coachella Valley Housing Inventory: On September 1st, total housing inventory in the Coachella Valley was 836 homes (down 57.3% from 1,959 homes one year ago). Market Watch explained that this lack of housing inventory continues to be the overall driver of Coachella Valley housing market. Market Watch expressed their surprise that inventory levels did not begin to increase after the wide distribution of the COVID vaccine (since they had predicted the number of new listings to dramatically increase as homeowners felt safer to open their homes to strangers with the wider distribution of COVID vaccine).
Coachella Valley Months of Sales Ratio: The median value for the months of sales ratio throughout the Coachella Valley is 8/10 of a month (compared to 2.5 months one year ago). With the months of sales ratios hovering at these historically low levels for over seven months now, Market Watch felt that there is little risk to the level of home prices at this time.
Months of Sales by Price Range: Market Watch noted that historically low months of sales ratios in the Coachella Valley in August occurred in all price ranges. Months of sales ratios were especially low in the higher price brackets when compared to August 2020 levels.
Months of Sales by City: Market Watch noted that record low month of sales ratios in the Coachella Valley in August occurred in almost every Coachella Valley city, other than Cathedral City, Coachella and Desert Hot Springs. The largest year-over-year decline in months of sales ratios occurred in Palm Desert, La Quinta, Rancho Mirage and Indian Wells.
Coachella Valley Days In The Market: The median value of days in the market for the entire Coachella Valley in August declined to 25 days (from 56 days one year ago). Market Watch noted that this was another housing metric that points to a housing environment with little price risk. They felt that while home prices may stop moving much higher they shouldn’t decline (other than some very short term price softening for seasonal reasons).
Days in the Market By City: Market Watch has added these two charts to their Desert Housing Report, showing days in the market in each Coachella Valley city for both detached and attached homes. The charts rank the cities left to right by the least number of days in the market. In August, Desert Hot Springs had the lowest number of days in the market for detached homes at 14 days, followed by Palm Springs at 19 days and Cathedral City at 20 days. Desert Hot Springs also had the lowest number of days in the market for attached homes at 11 days, followed by Palm Springs at 15 days and Bermuda Dunes at 24 days.
Coachella Valley Median Price Discount: The median value for sale price discount from list for detached homes in August was again 0.0% (the same discount as it has been for the last six months). As Market Watch has explained, since so many homes are selling right at list price, the median value is exactly 0.0%. However, Market Watch noted that in looking at the average sale price discount from list for detached homes, the average price discount was a premium of 1.8%, which means the average home was selling for 1.8% above list price in August.
Coachella Valley Average Sales Price Discounts From List By City: Market Watch added these two charts to their Desert Housing Report showing the average sale price discount from list in each Coachella Valley city for both detached and attached homes. Market Watch explained that a positive value means homes are selling above list price, a negative value means homes are selling below list price. Market Watch noted that in almost every city (other than Indian Wells), detached homes sold in August above list price. Similarly, in almost every city (other than Bermuda Dunes and Indio), attached homes sold in August above list price.
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