Our local real estate market experts have just released their May 2022 Desert Housing Report. Some highlights:
COACHELLA VALLEY DETACHED HOME MEDIAN PRICE: At the end of May, the median price of a detached home in the Coachella Valley was $700,000 (up 4.5% or $30,000 from $670,000 in April and up 20.7% or $120,000 from $580,000 in May 2021. Market Watch stated while traditional seasonal factors should begin to slow home price gains starting next month, the forces that have been driving home prices higher, i.e., low inventory and high demand, continue to dominate the market.
COACHELLA VALLEY ATTACHED HOME MEDIAN PRICE: At the end of May, the median price of an attached home in the Coachella Valley was $491,056, (up 2.4% or $11,606 from $479,450 in April and up 36.8% or $132,056 from $359,000 in May 2021). Market Watch noted that attached home median prices have been on a tear, but expect price gains to slow due to traditional seasonal factors and increasing inventory. If we were to follow the normal seasonal pattern, attached home median prices should peak sometime next month and then settle back. But Market Watch added that these are not normal times.
12 MONTH CHANGE IN THE PRICE OF THE AVERAGE SIZE HOME BY CITY: Detached Homes: Year-over-year gains in detached home median prices ranged from 39.2% for the 2,175 sq ft average sized Palm Springs detached home to 22.8% for the 1,600 sq ft average sized Cathedral City detached home. The detached home median price increased year-over-year by 30% or more in Palm Springs, Indian Wells, Rancho Mirage, Bermuda Dunes Indio and La Quinta. Attached Homes: Year-over-year gains in attached home median prices ranged from 54.1% for the 750 sq ft average sized attached home in Desert Hot Springs to 31.2% for the 1,950 sq ft average sized Indian wells attached home. The attached home median price increased year-over-year by more than 40% in Desert Hot Springs, Rancho Mirage, Indio, Palm Springs, Cathedral City and Palm Desert.
MONTHLY COACHELLA VALLEY HOME SALES (3 MONTH TRAILING AVERAGE): Over the last three-months, total Coachella Valley home sales averaged 1,034 units a month (down 20.3% year-over-year, but near the prepandemic total home sales averages of 1,018 sales in May 2017, 1,065 sales in May 2018 and 995 sales in May 2019. Market Watch noted that attached home sales were down proportionately more than detached home sales. They also noted that historically, May is when average home sales traditionally reach their seasonal peak, and so home sales should slow somewhat going forward.
MONTHLY COACHELLA VALLEY HOME SALES (12 MONTH TRAILING AVERAGE): The 12-month average of Coachella Valley home sales (which removes the seasonality from home sales numbers) shows total home sales in May averaged 918 home sales per (down 17% year-over-year). May sales of detached homes averages 636 homes sales per month (down 16% year-over-year), while May sales of attached homes averaged 282 home sales per month (down 18% year-over-year). Market Watch expects long-term sales to decline over the next 12 months to the pre-pandemic average of 800 home sales per month.
COACHELLA VALLEY HOME SALES BY CITY: Home sales declined in May year-over-year in every Coachella Valley city except Coachella and Desert Hot Springs. Home sales in May decreased year-over-year by 38.3% in La Quinta, 29.6% in Indian Wells. 26.1% in Palm Desert, 21.4% in Rancho Mirage and 14.2% in Palm Springs. Market Watch noted that home sales in those cities primarily considered as “work force” cities, i.e., Coachella, Cathedral City, Desert Hot Springs and Indio, were comparable to or higher than home sales in May 2021. In fact, the 15 home sales in Coachella in May were up 36.4% year-over-year and the 77 home sales in Desert Hot Springs in May were up 26.2% year-over-year.
COACHELLA VALLEY HOME SALES BY PRICE RANGE: Market Watch pointed out that the 20% decrease in total Coachella Valley home sales is not evenly distributed across all price ranges. The vast majority of the decline in home sales is occurring in those homes priced under $500,000 (mainly due to more homes now being priced in the higher price ranges). Sales of homes priced over $600,000 increased year-over-year simply because there are so many more homes currently priced in this price range. In fact, sales of homes priced between $600,000 and $700,000 were up 36.6% year-over-year and sales of home priced over $1,000,000 were up 16.5% year-over-year.
COACHELLA VALLEY TOTAL HOME INVENTORY: On June 1st, Coachella Valley home inventory was 1,179 homes (up 73.1% year -over-year or an increase of 498 homes from the 681 home inventory on June 1st, 2021). Market Watch stressed that this is the first meaningful increase in home inventory in three years and that it is occurring during the traditional seasonal period where inventory normally contracts. Market Watch felt that if home inventory stays near the current level moving into summer, our market should be positioned to see even higher home inventory numbers moving until winter.
COACHELLA VALLEY MONTHS OF SALES RATIO: On June 1st the months of sales ratio for the entire Coachella Valley was 1.3 months (up 0.7 months year-over-year). Market Watch noted that as was the case with home inventory, this is the highest months of sales ratio in over 16 months (but still far below the normal months of sales ratios of three and four months). Like inventory, seasonal factors should keep this ratio from rising any higher until next winter. Further, since the months of sales ratio shows the balance of supply and demand, Market Watch felt that it will be very important to follow it over the next half a year.
MONTHS OF SALES RATIO BY PRICE RANGE: The months of sales ratio is significantly higher in every price range over $200,000. Market Watch noted that this chart displays an important fact, i.e., that the months of sales ratio is always higher for more expensive homes. Further, they noted that it is normal to have a ratio of eight months for homes priced over one million dollars. Lastly, they noted that while the months of sales ratios are higher than one year ago, none are close to the past norms for the same price range.
MONTHS OF SALES RATIO BY CITY: Cathedral City, Rancho Mirage and Palm Desert were the only Coachella Valley cities with months of sales ratios of one month or under. Otherwise, months of sales rations range from 1.3 months in Indio to 1.7 months in Coachella.
COACHELLA VALLEY DAYS IN THE MARKET: At the end of May, the median number of days in the market throughout the entire Coachella Valley was 20 days (one day less than last month and 10 days less than one year ago). Market Watch noted that low home inventory continued to keep selling times near current, low levels. Further, with inventory rising and sales contracting, Market Watch expects days in the market to remain around 20 to 25 days.
DAYS IN THE MARKET BY CITY: Palm Springs again had the lowest median selling time for detached homes at just 14 days, followed by Desert Hot Springs at 16 days. The longest median selling time for detached homes was 25 days in Cathedral City. Palm Springs also had the shortest selling time for attached homes at 11 days, followed by Rancho Mirage at 16 days. The longest median selling time for attached homes was 30 days in Cathedral City.
PERCENTAGE OF HOMES SELLING ABOVE LIST: At the end of May, 58.3% of Coachella Valley homes sold for above list price (compared to 38.6% one year ago). Market Watch noted that this is the highest percentage of homes selling for above list price in history and results when there are multiple bidders for each home with each bidder fearful of the other(s) out bidding them. In more normal times the percentage of homes selling for above list price is around 10%. Market Watch expects this metric to stop increasing moving into the summer months.
AVERAGE PERCENTAGE PRICE DISCOUNTS BY CITY: In May, Palm Springs continued to have the highest average selling premium for detached homes at 5.2%, followed by the city of Coachella at 4.4%. In May, Palm Springs also continued to have the highest average selling premium for attached homes at 5.3%, followed by Rancho Mirage at 4.7%. The lowest average selling premium for detached homes was in Indian Wells at 0.9% and the lowest average selling premium for attached homes was also in Indian Wells at 0.7%.
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