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Our local real estate market experts, Market Watch LLC, have just released their February 2021 Desert Housing Report, looking at the state of the residential real estate market in the Coachella Valley in February. Some highlights:
At the end of February, the Coachella Valley detached home median price was $527,000 (up 22% from $431,000 at the end of February 2020).
At the end of February, the Coachella Valley attached home median price was $340,250 (up 19.4% from $285,000 at the end of February 2020).
Detached home median prices increased in February by more than 20% year-over-year in four cities; Indian Wells (+32.1%), La Quinta (+29.5%), Palm Springs (+28.1%) and Desert Hot Springs (+24.1%). In addition, detached home median prices in February exceeded their previous historic highs reached in the housing boom of 2006, in Palm Springs (by 45%), Cathedral City (by 6.3%), La Quinta (by 3.0%), Indio (by 2.9%) and Desert Hot Springs (by 0.8%). Attached home median prices increased in February by more than 20% year-over-year in two cities; Indian Wells (+28.7%) and Rancho Mirage (+20.7%). Attached home median prices in February remained below their previous historic highs reached in 2006 in all Coachella Valley cities surveyed (ranging from 12.3% below 2006 historic highs in Indian Wells to 28.3% below 2006 historic highs in Indio).
Three-month average monthly total home sales were 1,057 units per month in February (up 38.9% year-over-year). Market Watch stated that they were encouraged by the fact that total home sales have running at this level for the last six months.
Market Watch felt that the twelve-month average monthly total, detached and attached home sales clearly showed the sharp dip in sales during the first three months of the pandemic as well as the sales surge that followed. They also noted that total home sales over the last twelve months averaged 948 homes per month and expressed their opinion that this sales level seemed to be trending even higher.
Market Watch noted that most of the Coachella Valley’s home sales increase was due to increases in home sales in La Quinta, Palm Desert, Palm Springs and Rancho Mirage. They also noted that in February home sales increased year-over-year by 96% in Indian Wells, 63.3% in La Quinta, 44% in Rancho Mirage & 41.5% in Palm Desert.
Market Watch noted that the largest home sales increases in February were in the price ranges above $400,000. February home sales increased year-over-year by 133.3% in the $900,000 to $1,000,000 price range, 128.6% in the over $1,000,000 price range and 87.4% in the $400,000 to $500,000 price range.
Coachella Valley housing inventory fell to a historic low 902 homes on March 1st (down 70% from 3,019 homes on March 1st, 2020). Market Watch pointed out that until the second half of 2020 and the first part of this year, inventory levels had followed a strong seasonal pattern, with low inventory levels generally occurring in September and high inventory levels generally occurring in March. Market Watch believes that this low inventory level is due to COVID-19 and a reluctance on the part of sellers to open their homes to viewing by strangers and that this trend will reverse once vaccines are widely available.
As would be expected, the large drop in housing inventory coupled with continued high sales has reduced the Coachella Valley months of sales ratio to an all-time low 1.0 months (compared with 3.6 months one year ago). This means that at the current sales rate it would take just one month to liquidate the entire Coachella Valley housing inventory. Market Watch stressed that this is the force of supply and demand that is driving prices higher almost daily. It is also the cause for the median value of days in the market dropping to just 40 days (compared to 52 days one year ago).
The months of sales ratio in every price range under $700,000 is now less than one month, with the lowest ratio being 0.5 months for homes priced between $200,000 and $300,000. For homes priced over $1 million, the months of sales ratio now stands at just 2.4 months (compared to a normal months of sales ratio of around 10 months).
On March 1st, the months of sales ratio was under one month in Bermuda Dunes, Coachella, Cathedral City, Indio, Palm Springs, and La Quinta. Palm Desert had a ratio of exactly one month. Market Watch commented that Indian Wells, which normally has a months of sales ratio of 10 months or higher, had a current months of sales ration of just 2.1 months.
The February median value for sale price discount from list was -0.7%, which implies that an average Coachella Valley home offered at $500,000 sold for $496,500. Perhaps more importantly, Market Watch commented that in February one out of every four and a half homes continued to sell for more than its asking price.
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