Our local real estate market experts, Market Watch LLC, have just released their July 2022 Desert Housing Report. Here are some highlights:
COACHELLA VALLEY DETACHED HOME MEDIAN PRICE: The detached home median price in the Coachella Valley in July was $710,000 (up $10,000 or 1.4% from June and up 19.3% from the detached home median price of $595,000 one year ago). Market Watch pointed out that historically this is a seasonal period when home price increases have slowed or home prices have even declined in the pre-pandemic past, but that has not happened so far this year. However, they noted that the forces that have been driving home prices higher, i.e., higher home sales and low inventory, are rapidly reversing and they expect some price correction as a result.
COACHELLA VALLEY ATTACHED HOME MEDIAN PRICE: The attached home median price in the Coachella Valley in July was $479,500 (down $10,500 or 2.2% from June but up 25.1% from an attached home median price of $383,250 one year ago). Market Watch noted that in the pre-pandemic past, it was not uncommon to see the attached home median price decrease by as much as 10% between July and October. Market Watch wondered if the $10,500 decline in the attached home median price from June to July might be the start of this historically seasonal pattern.
TWELVE MONTH CHANGE IN THE AVERAGE SIZE HOME PRICE BY CITY: Year-over-year increases in the average size detached home price ranged from 50.9% for the average size detached home of 3,450 sq ft in Indian Wells to 20.4% for the average size detached home of 1,700 sq ft in Coachella. Year-over-year increases in the average size attached home price ranged from 56% for the average size attached home of 750 sq ft in Desert Hot Springs to 24.2% for the average size attached home of 1,750 sq ft in La Quinta.
MONTHLY HOME SALES (THREE-MONTH TRAILING AVERAGE): Total Coachella Valley home sales averaged 791 home sales per month in July (down 26.4% year-over-year and down 16.6% from the July pre-pandemic average of 948 homes sales per month). Market Watch noted that decrease in home sales occurred primarily in detached homes. Market Watch pointed out that this time of the year is historically a seasonal period of low sales. They hypothesized that some of this decrease in home sales was seasonal, but that some of it was also due to the recession and a reaction to the surge in home sales during COVID.
MONTHLY HOMES SALES (TWELVE-MONTH TRAILING AVERAGE): The twelve-month average of home sales, which removes all seasonality, showed Coachella Valley total homes sales averaged 861 home sales per month in July (down 23.7% year-over-year). Market Watch stated that long-term sales of detached homes were still above pre-pandemic average detached home sales but average attached home sales had returned to pre-pandemic norms. Market Watch expects longer-term home sales metrics to fall below pre-pandemic levels over the next six months.
HOME SALES BY CITY: Every Coachella Valley city other than Coachella (where home sales were up 7.7% year-over-year) had lower home sales in July compared to homes sales in July 2021. The largest home sales declines were in La Quinta and Palm Desert, where sales were down 43.5% and 32.8% respectively.
HOME SALES BY PRICE RANGE: Overall Coachella Valley home sales were down by 26.4% year-over-year, but the decline was not evenly distributed across all price ranges. Sales in every price range were down except for those homes priced at $1 million or more (where home sales were up 5% year-over-year). Market Watch noted that in July there were only seven homes sold (both detached and attached homes) that were priced under $200,000.
COACHELLA VALLEY HOUSING INVENTORY: Total Coachella Valley home inventory on August 1st, was 1,637 homes (up 95.8% or 801 homes from 836 homes for sale on August 1st, 2021). Market Watch noted that Coachella Valley home inventory has finally started to grow (and at a time of year when inventory has historically shrunk). Market Watch surmised that if this pattern were to continue, inventory could re-normalize and reach 2,500 homes or even 3,000 homes by January or February.
COACHELLA VALLEY REGIONAL MONTHS OF SALES RATIO: On August 1st, the Coachella Valley’s months of sales ratio was 1.9 months (up 1.2 months from 0.7 months on August 1st, 2021). As was the case with inventory, this is the highest months of sales ratio in almost two years. However, Market Watch noted that the months of sale ratio still remains considerably below 3 to 3.5 months, which has historically been normal for late summer. Further, they noted that even though home inventory has been rising and home sales falling, the changes have not been enough to lift the months of sales ratio back to normal levels yet. However, they expect the months of sales ratio to possibly reach historically normal levels by year’s end.
MONTHS OF SALES RATIO BY PRICE RANGE: The months of sales ratios in the higher price ranges had the largest increases in July year-over-year. For all price ranges over $600,000, months of sales ratios ranged between 2.1 to 2.7 months. Market Watch expects all months of sales ratios to increase moving toward winter.
MONTHS OF SALES RATIOS BY CITY: On August 1st, Bermuda Dunes had the lowest months of sales ratio at 1.3 months, followed by Thousand Palms and Rancho Mirage at 1.4 months each. The highest months of sale ratio was in Coachella at 3 months.
COACHELLA VALLEY OVERALL DAYS IN THE MARKET: At the end of July, the median number of days in the market throughout the Coachella Valley was 24 days (up 3 days from June but 1 day less than last year). Market Watch believes we’ve seen the lows in average selling times and they expect this metric to rapidly rise toward more normal levels.
DAYS IN THE MARKET FOR DETACHED & ATTACHED HOMES BY CITY: Desert Hot Springs had the lowest median selling time for detached homes in July at 18 days, followed by Palm Springs with 19 days and Cathedral City at 20 days. Palm Springs had the shortest median selling time for attached homes at 15 days, followed by Indio at 17 days and Rancho Mirage at 20 days.
PERCENTAGE OF HOMES SELLING ABOVE LIST PRICE: At the end of July, 47.9% of Coachella Valley homes sales were above list price (compared to 49% one year ago). Market Watch expects this metric to drop rather quickly as inventory increases and homeowners have more choices. They noted that historic norms for this metric are around 10%.
AVERAGE SALES PRICE DISCOUNTS FOR DETACHED & ATTACHED HOMES BY CITY: In July, Palm Springs had the highest average selling premium for detached homes at 2.7%, followed by Desert Hot Springs at 2.2% and Coachella at 2%. Palm Springs also had the highest average selling premium for attached homes in July at 3.5%, followed by Rancho Mirage at 3.2% and Indio at 3.1%.
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