Our local real estate market experts, Market Watch LLC, have just released their January 2021 Desert Housing Report (and discontinued their Covid-19 Real Estate Report looking at the impact of Coronavirus pandemic on our local market). Some highlights:
The Coachella Valley detached home median price in January was $525,000 (an increase of 22% year-over-year from $431,000 in January 2020). Market Watch commented that it appears that the sales surge and the resulting home price increases that began mid-summer are showing signs of easing (based on the detached home median price hovering around $525,000 for the last three months). It should be noted that the detached home median price is above the previous highs (around $425,000) set in 2006 and 2007.
The Coachella Valley attached home median price in January was $335,500 (an increase of 19.8% from $280,000 in January 2020). Market Watch noted that the attached home median price has not yet reached the previous highs (around $375,000) set in 2006 and 2007.
Detached home median prices are up over 25% year-over-year in Indian Wells, Palm Springs and La Quinta. Additionally, detached home median prices are above the previous highs set in 2006 and 2007 in Palm Springs (up 40%), Cathedral City (up 6.3%) and Indio (up 2.5%). Attached home median prices are up over 23% year-over-year in Indian Wells and La Quinta. None of the Coachella Valley cities have an attached home median price that is equal to or above the previous highs set in 2006 and 2007.
Total homes sales averaged 1,045 homes per month in January (an increase of 46% year-over-year from 716 homes per month in January 2020). Market Watch pointed out that home sales have been at all-time highs from October to December breaking what had been a seasonal pattern of home sales reaching lows in October and highs in May. Market Watch predicted that home sales would stay near current levels into the spring.
The largest increases in home sales were in Indian Wells (up 138% year-over-year), La Quinta (up 65% year-over-year), Palm Desert (up 60% year-over-year) and Rancho Mirage (up 54% year-over-year). Market Watch noted that the home sales increases were the largest in the second-home resort cities as opposed to those cities primarily housing working families (Cathedral City, Desert Hot Springs, Coachella, and Indio.
The largest increases in home sales were in the $400,000 to $500,000 price range (up 105.9% year-over-year), the $500,000 to $600,000 price range (up 68.1% year-over-year) and in homes priced over one million dollars (up 146.2% year-over-year).
As anyone looking to purchase a home in the Coachella Valley can attest, Coachella Valley housing inventory continues to decline. On February 1st, the Coachella Valley housing inventory was 1,283 homes (a decrease of 60% from 3,202 homes on February 1st, 2020). Market Watch noted that this degree of inventory decline is abnormal, but mirrors what is happening in many other California regions. Market Watch felt that this inventory decline was more the result of homeowners’ reluctance to list their homes and open them to strangers during a pandemic rather than a decrease in the number of people wanting to sell their homes. They expect housing inventory to return to normal or higher levels once the vaccines have been widely distributed and people feel safe to open their homes to others.
The months of sales ratio measures how many months it would take to sell the entire housing inventory at the current sales rate. The months of sales ratio on February 1st was an all-time low 1.4 months. Market Watch stated that housing inventory could increase by 300% and the months of sales ratio would be 4 months (considered to be an acceptable months of sales ratio). The median value of days in the market in January was 39 days compared to 51 days one year ago.
The months of sales ratio declined significantly year-over-year in every price range. Market Watch highlighted the exceptionally low months of sales ratios in the higher price ranges. Because the number of potential home buyers who can afford higher priced homes is smaller, months of sales ratios for higher priced homes are typically much higher. But this is not the case during this pandemic.
On February 1st, the months of sales ratio was below 3 months in all of the Coachella Valley’s eleven cities studies (and was below 2 months in nine of the Coachella Valley cities studied). Market Watch explained that this lack of supply has been putting a strong, upward pressure on home prices in the Coachella Valley (but again expected housing inventory levels to increase once the vaccines have been widely distributed).
The January median value for sale price discount from list was -0.8% (improving from -1.9% in January 2020). This implies that an average house listed at $500,000 would have sold for $496,000.
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