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The local real estate market experts at Market Watch LLC have just released their February Desert Housing Report. Here are some highlights:
The Coachella Valley detached home median price was $425,000 in February (up 9.3% from $389,000 in Feb. 2019). Market Watch’s analysts pointed out that the Coachella Valley’s housing metrics were the strongest that they have seen in the last 10 years, with prices and sales beginning to accelerate at the same time that supply is declining.
The Coachella Valley attached home median price was $285,000 in February (up 1.8% from $280,000 in Feb. 2019). Market Watch’s analysts expect the attached home median price to rise above the 3% growth curve heading into the summer months.
Detached home median prices continued to rise year-over-year in seven of the nine Coachella Valley cities (with decreases in detached home median prices of 10.6% in Indian Wells and 12.7% in Rancho Mirage). Detached home median prices rose year-over year in Cathedral City (+9.3%), Indio (+8.6%), Desert Hot Springs (+7.8%), Palm Desert (+7.7%), Palm Springs (+7.6%), Coachella (+2.7%) and La Quinta (+0.5%). The detached home median price in Palm Springs was 13.2% above the previous record high in 2006. The detached home median prices in all other Coachella Valley cities remained below the record highs in 2006 (by as much as 27.9% in Rancho Mirage and 26.6% in Indian Wells). Attached home median prices increased year-over-year in Palm Desert (+8.7%), Cathedral City (6.6%) and La Quinta (+0.8%). Attached home median prices decreased year-over-year in Palm Springs (-0.5%), Indian Wells (-3.1%), Indio (-15.7%), Rancho Mirage (-17.3%) and Desert Hot Springs (-62.3%). The attached home median price in all Coachella Valley cities remained below the record highs reached in 2006 (by as much as 79.2% in Desert Hot Springs and 35.4% in Rancho Mirage). Market Watch’s analysts did note that the decrease in the attached home median price in Desert Hot Springs was more of a reflection of the small number of attached homes in that city than any real price decline for those homes.
In looking at total, detached and attached home sales (3 month moving average) for February, Market Watch’s analysts noted that in all three categories, sales were strongly ahead of last year (which is the force behind increasing home prices). Total home sales averaged 761 units per month (an increase of over 20% from total home sales of 633 units per month in Feb. 2019). Sales of detached homes were up 24% year-over-year (increasing from 413 units per month in Feb. 2019 to 511 in Feb. 2020) while sales of attached homes were up 14% year-over-year (increasing from 219 units per month in Feb. 2019 to 250 per month in Feb. 2020).
In looking at February home sales by city, Market Watch’s analysis noted that home sales increased significantly year-over-year in every city except Thousand Palms. In particular, home sales increased significantly year-over-year in Rancho Mirage (+44.2%), Cathedral City (+32.6%), La Quinta (+31.9%), Palm Desert (+16%), Indio (+14.4%), Palm Springs (+13.3%) and Desert Hot Springs (+10%).
In looking at February home sales by price ranges, sales declined by -10.3% year-over-year for homes priced under $200,000. Every other price range showed increased sales; particularly for homes priced between $500,000 and $600,000 where sales increased by +65.1% year-over-year (from 43 units per month in Feb. 2019 to 71 units per month in Feb. 2020). For homes priced over $1 million, home sales increased year-over-year by almost +40% (from 46 units per month in Feb. 2019 to 63 units per month in Feb. 2020).
Market Watch’s analysts pointed out that inventory measures supply or the number of homeowners selling (versus sales which measures home buyer demand or buying). On March 1st, the total supply of detached and attached homes in the Coachella Valley was 3,019 units (compared with 3,909 units on Mar. 1st 2019). This represents a 22.8% decrease in inventory year-over-year.
The months of sales ratio (calculated by dividing the inventory by the average sales rate) is a measure of supply versus demand. A low number represents low supply and high demand (typically a good precursor to higher home prices) while a large number represents larger supply and low demand (typically a good precursor for lower home prices). With expanding sales and contracting inventory, the current months of sales ratio is a historically low 3.6 months, compared with a months of sales ratio of 4.8 months one year ago. The median value of days in the market stood at 52 days in February (compared with 66 days in Feb. 2019).
Focusing on months of sales ratios at the various home price brackets, Market Watch’s analysts noted lower months of sales year-over-year in every bracket except the $800,000-$900,000 price range. The largest decline in months of sales ratios by price range is in the million dollar and over price range, where the months of sales ratio dropped by 31.5% (from 14.3 months in Feb. 2019 to 9.8 months in Feb. 2020).
Looking at months of sales ratio by city, Market Watch noted lower months of sales ratios in every Coachella Valley city except Bermuda Dunes, indicating that the strengthening housing market is broad-based throughout the Coachella Valley and is not limited to any one area or market segment. Current months of sales ratios ranged from 1.7 months in the city of Coachella to 8.9 months in Indian Wells.
Lastly, the February average sale price discount from list was -1.9% (0.4% less than one year ago). This current reading indicates that an average home in the region offered at $400,000 would have sold for $392,400.
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