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Our local residential real estate market experts have just released their March 2021 Desert Housing Report. Some highlights:
The Coachella Valley detached home median price in March was $549,000 (up 27.3% year-over-year).
The Coachella Valley attached home median price in March was $345,000, (up 15.4% year-over-year). Market Watch commented that if attached home prices follow the seasonal normal pattern, attached home prices should continue to move higher until May before softening. They also commented that attached homes appear to be helping fill the supply void for detached homes in the lower price ranges.
In March, seven Coachella Valley cities (Indian Wells, Palm Springs, Rancho Mirage, Desert Hot Springs, la Quinta, Palm Desert and Cathedral City) had year-over-year detached home median price increases over 20%, with Indian Wells and Palm Springs experiencing year-over-year detached home median price increases over 30%. Market Watch pointed out that detached home median prices in five Coachella Valley cities (Palm Springs, Cathedral City, Desert Hot Springs, Indio and La Quinta) have exceeded the previous historic detached home median price highs reached in 2006-2007. Seven Coachella Valley Cities ((Indian Wells, Rancho Mirage, La Quinta, Indio, Palm Desert, Cathedral City and Palm Springs) had year-over-year attached home median price increases over 10%, with Indian Wells experiencing a year-over-year attached home median price increase of 30%. No Coachella Valley city has an attached home median price better than 10% below the previous record highs for attached home reached in 2006.
The three-month average of total home sales is now averaging 1,129 units per month (up 39% year-over-year). Market Watch felt that the three-month average of total home sales will reach 1,200 units or higher over the next two months. They also pointed out the three-month average of attached home sales in March of 465 sales per month (up 90.6% year-over-year).
The twelve-month average of home sales takes out the seasonal pattern and shows the true, long-term sales trend of sales surging for both detached and attached homes after the four-month decrease in sales beginning in March 2020 due to the outbreak of the pandemic. Twelve-month total home sales were higher by 20% year-over-year, while detached sales were up 16.7% year-over-year and attached sales were up 24% year-over-year. With demand exceeding supply, any increase in supply could result in a much higher home sales.
In looking at home sales by city, the largest home sales increases by volume were in the cities of Palm Desert and La Quinta, with home sales increases of 85 and 71 units year-over year respectively. Percentagewise, home sales increased year-over-year by 64.3% in Indian Wells, 51.9% in Rancho Mirage, 51.1% in La Quinta and 50.6% in Palm Desert.
In looking at home sales by price range, the largest home sales increases occurred in the middle to higher price brackets. Market Watch felt that what is particularly interesting is that sales of homes under $300,000 were declining. Even though condominium sales (which are generally homes in this price range) were growing, overall there were fewer and fewer homes in these lower price ranges due to overall price increases. Home sales increased year-over-year by 122.2% in the over $1 million price range, 121.4% in the $900,000 to $1 million price range and 103.7% in the $700,000 to $800,000 price range.
Just when we thought it couldn’t get any worse, the Coachella Valley housing inventory continued to decline and on April 1st was at 742 homes for sale (down 75.6% year-over-year from 3,043 homes for sale on April 1st, 2020). Market Watch was of the opinion that this huge decline in inventory appeared to be due to two congruent factors; the overall 20% rise in total sales and the decline in new listings below the normal rate because of COVID. Market Watch felt that many people were reluctant to list their homes and open them up to traffic during the pandemic. They felt that during normal conditions, the Coachella Valley housing inventory would have been around 2,600 homes for sale. Market Watch expressed hope that there will be a surge of new listings once COVID-19 vaccines are widely distributed and homeowners feel safe again.
Continued high sales and low housing inventory again drove the month of sales ratio to a new historic low of 0.8 of a month (or just a little over three weeks of supply compared to 3.7 months on April 1st, 2020). Market Watch commented that this lack of supply was causing bidding wars among homebuyers and was the force driving home prices much higher. The median number of days in the market on April 1st was 37 days (compared to 54 days on April 1st, 2020).
In looking at months of sales by price range, Market Watch commented that the size contrast between the blue and orange bars in the graph tells the entire story. The month of sales ratio in every price bracket under $900,000 was less than one month, with the lowest ratio being 3/10 of a month for homes and condominiums priced between $200,000 and $300,000. For homes priced over $1 million, where the ratio is normally around 10 months, it was just 1.8 months on April 1st.In looking at months of sales by city, on April 1st eight Coachella Valley cities (Coachella, Cathedral City, Indio, Palm Springs, La Quinta, Palm Desert, Rancho Mirage and Thousand Palms) had a months of sales ratio under one month. Market Watch noted that Indian Wells, which normally has a months of sales ratio of 10 months or higher, has a current months of sales ratio of just 1.2 months. Bermuda Dunes and Desert Hot Springs also had months of sales ratios of just over one month.
Lastly, in looking at the sale price discount from list, the March median value for sale price discount from list was 0.0%, meaning that an average Coachella Valley home offered at $500,000 sold for exactly $500,000. Market Watch noted that this number has historically averaged between a 2% and 2.5% discount.
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