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Local real estate market experts, Market Watch LLC have just released their October 2020 Desert Housing Report. Some highlights:
The detached home median price in the Coachella Valley in October was $510,000 (up 27% year-over-year). Market Watch noted that the normal seasonal pattern of price weakness between June and September did not occur this year (a positive sign for future home prices).
The attached home median price in the Coachella Valley in October was $310,000 (up 12.7% year-over-year). Just like detached homes, Market Watch noted that the normal seasonal pattern of price softening between June and September did not occur this year (which bodes well for continuing price appreciation going forward).
Seven Coachella Valley cities had year-over-year double digit detached home median price increases, with La Quinta leading the pack with a year-over-year detached home median price increase of 38.9%. Detached home median price changes in the other Coachella Valley cities ranged from an increase of 19% in Desert Hot Springs to a decrease of 9.3% in Indian Wells. This chart also shows that the detached home median price in Palm Springs is now 30.8% above the previous high detached home median price reached in 2006 before the market collapse. Attached home median prices increased by double digits year-over-year in La Quinta (16%), Palm Springs (15.4%) and Rancho Mirage (11.8%)
Home sales continue to surge in the Coachella Valley, with detached home sales in October averaging 755 homes per month (up 43.8% from average sales of 525 homes per month one year ago). Total homes sales in October averaged 1,120 homes per month (up 48.3% from average sales of 755 homes per month one year ago). Market Watch pointed out that they did not observe the normal seasonal home sales weakness between April and November. They felt that this should be a positive indicator for home prices as we move into what is typically our busier selling season.
In Market Watch’s opinion, La Quinta, Palm Desert, Palm Springs and Rancho Mirage stood out with year-over-year average homes sales increases of 78.3% in La Quinta, 78.2% in Rancho Mirage, 58% in Palm Desert and 54.9% in Palm Springs, especially in light of the ongoing Coronavirus pandemic. Market Watch noted smaller increases in average home sales in Cathedral City, Desert Hot Springs and Indio and attributed them to the fact that sales in these cities rely on the local workforce with jobs in the service area currently under stress.
The largest increases in home sales were in homes priced over $500,000. In the $700,000 to $800,000 price range, home sales increased by 136% year-over-year. In the million-dollar and over price range, average monthly home sales increased by 180% (from 45 homes per month one year ago to 126 homes per month this October).
Coachella Valley housing inventory continues at historically low levels. On November 1st, there were only 2,014 homes for sale (compared with 3,010 homes for sale one year ago). Market Watch stated that Coachella Valley hosing inventory has been declining for over 5 years so the current low level may be due to more than just the Coronavirus pandemic.
The Coachella Valley’s months of sales ratio is 2.4 months (a historic low and compared to 3.8 months one year ago). Market Watch noted that this was due to growing sales and record low inventory. The Coachella Valley’s median number of days in the market is currently 43 days (compared to 62 days one year ago).
The months of sales ratio decreased year-over-year in every price range. Market Watch pointed out that the months of sales ratio was under 3 months in every price range under $900,000. They also pointed out that the months of sales rations were particularly low in homes priced from $600,000 to $900,000, which they felt was unusual for such higher price homes.
On November 1st, the months of sales ratio in nine of the Coachella Valley’s eleven cities was less than 3 months. Market Watch directed attention to the large declines in the ratios for the cities of La Quinta (with a decrease of 47.8%) and Palm Springs (with a decrease of 46.9%) as showing these 2 cities leading the pandemic housing surge in the Coachella Valley.
The October median value for the sale price discount from list was 1.0%, continuing the significant decrease in this number over the last 2 months. This number implies that an average house offered at $500,000 sold for $495,000. Market Watch noted that in many instances, Coachella Valley homes are selling for more than the list price.
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