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Our local real estate market experts at Market Watch LLC have just released their September Desert Housing Report. Here’s a summary:
SEPTEMBER SALES RECOVERY: At the height of the pandemic in January of 2021, home sales were 59.7% above the norm (based on home sales over the years 2016, 2017, 2018 and 2019). By January of this year, home sales fell to 34.7% below the norm. After improving for four months at the beginning of this year, home sales have stopped improving and are now 27.7% below the norm for this time of year. Market Watch’s confessed that their prediction early this year that home sales would return to the norm by the end of the year is no longer realistic. They explained that it was based on their belief that inflation would fall to 3% and mortgage rates would be around 5.5% by the end of the year. They felt that recent actions by the Federal Reserve now makes this unlikely.
SEPTEMBER COACHELLA VALLEY DETACHED HOME MEDIAN PRICE: The median price of a detached home in the Coachella Valley ended September at $660,404 (unchanged from August but down 1.4% year over year). Market Watch felt that the small decline in detached home median prices over the last four months was primarily a seasonal decline (since the summer months almost always bring some price weakness in detached homes in the Coachella Valley). However, they also noted that with both inventory and home sales at low levels, supply and demand continue to remain in balance.
SEPTEMBER COACHELLA VALLEY ATTACHED HOME MEDIAN PRICE: The attached home median price in the Coachella Valley in September was $435,000 (down $4,000 from August & down 6.5% year over year). Market Watch stated that the seasonal change in the price of attached homes is much larger than that for detached homes. Market Watch expects that if the normal seasonal pattern continues, the attached home median price should begin to increase moving into the end of the year and into the new year.
SEPTEMBER 12 MONTH CHANGE IN THE PRICE OF THE AVERAGE SIZE HOME BY CITY: In every city, other than La Quinta and Bermuda Dunes, the price of the average size detached home in that city declined year-over-year in September. The declines in price of the average size detached homes ranged from -0.8% for the 1,600 sq ft average size detached home in Desert Hot Springs to -7.9% for the 2,200 sq ft average size detached home in Palm Desert. The price of the average size attached home increased year-over-year in September in six Coachella Valley cities, ranging from an increase of +1.2% for the 1,450 sq ft average size attached home in Bermuda Dunes to +10.1% for the 1,950 sq ft average size attached home in Indian Wells.
SEPTEMBER COACHELLA VALLEY MONTHLY HOME SALES – 3-MONTH TRAILING AVERAGE: In the Coachella Valley, the three-month average of home sales declined in September to 532 homes per month (down 49 homes or 8.4% from 581 home sales in September 2022). Market Watch pointed out that in September the homes sales decline continued proportionally in both the detached and attached market. In September, the Coachella Valley’s monthly average home sales were running 27.7% below the norm calculated from home sales in 2016 through 2019).
SEPTEMBER COACHELLA VALLEY MONTHLY HOME SALES – 12 MONTH TRAILING AVERAGE: Home sales, using a 12-month trailing average (which removes seasonality from the data), averaged 573 homes per month in September (down 6 home sales from August and down 250 homes sales or 30.4% from 823 home sales per month in September 2022). Market Watch felt that this chart showed that the long-term average of monthly home sales was flattening and they believe the worst is over. However, they stated that they continue to believe that home sales won’t recover until mortgage rates come down from 7.5% to around 5%.
SEPTEMBER COACHELLA VALLEY HOME SALES BY CITY: In every Coachella Valley city, other that Cathedral City, Indian Wells, Desert Hot Springs and Rancho Mirage, the 3-month average of home sales declined year-over-year in September. The largest home sales decline was in Palm Springs (down 18% year-over-year). The largest home sales increase was in Rancho Mirage (up 18%). Market Watch noted that home sales were comparable to year ago levels in every city, which showed that the low home sales problem in the region is widespread and not unique to any particular city.
SEPTEMBER COACHELLA VALLEY HOME SALES BY PRICE RANGE: Market Watch noted that home sales were comparable to September 2022 levels in all price ranges (other than for homes priced between $600,000 and $900,000).
OCOTOBER 1st COACHELLA VALLEY HOME INVENTORY: On October 1st , Coachella Valley home inventory was 1,762 homes (up from 1,601 homes on September 1st and down from 1,801 homes on October 1st, 2022). Market Watch felt that some of this increase in inventory was seasonal and they expect the seasonal increase in inventory to continue for the next 3 or 4 months.
OCTOBER 1ST COACHELLA VALLEY REGIONAL MONTHS OF SALES RATIO: On October 1st, the Coachella Valley’s months of sales ratio was 3.1 months (up from 2.8 months on September 1st and up from 2.2 months on October 1st, 2022). Market Watch explained that this fundamental ratio measures supply and demand and they felt that at 3.1 months it represented a balanced housing market pointing to relatively stable home prices going forward.
OCTOBER 1st MONTHS OF SALES RATIO BY PRICE RANGE: The months of sales ratio was higher year-over-year in every price range. Because the increase in the months of sale ratios year-over-year were approximately the same in all price ranges, Market Watch felt that this showed that the Coachella Valley housing market had no distortions in supply and demand in any price bracket.
OCTOBER 1st MONTHS OF SALES RATIO BY CITY: The months of sales ratio was higher year-over-year in every Coachella Valley city other than Coachella. The increase in the months of sale ratios year-over-year were approximately the same in all cities other than Thousand Palms.
SEPTEMBER COACHELLA VALLEY REGIONAL DAYS IN THE MARKET: At the end of September, the median number of days in the market in the Coachella Valley was 38 days (same as in August and six days more than the 32 days in September 2022). Because of continuing low inventory, Market Watch thought that the median selling time will stay around current levels for some time.
SEPTEMBER COACHELLA VALLEY DAYS IN THE MARKET BY CITY: In September, Coachella had the lowest median selling time for detached homes at 24 (down from 28 days in September 2022), followed by Cathedral City at 31 (up from 29 days in September 2022), and then Desert Hot Springs at 32 days (up from 29 days in September 2022). With regard to attached homes, Desert Hot Springs had the shortest average selling time at 28 days (up from 23 days in September 2022), followed by La Quinta at 33 days (down from 50 days in September 2022) and Palm Springs at 35 days (up from 26 days in September 2022).
SEPTEMBER PERCENTAGE OF HOMES SELLING ABOVE LIST PRICE: In September, 17.1% of home sales in the Coachella Valley sold above list price (compared to 28.8% in September 2022). Market Watch stated that the percentage of homes selling above list price to remain at current levels moving into fall and winter and as home inventory grows.
SEPTEMBER AVERAGE HOME SALE PRICE DISCOUNTS BY CITY: In September, detached homes were selling for an average discount ranging from -0.2% in Coachella to -3.0% in Rancho Mirage. Average discounts for attached homes in September ranged from -1.5% in Indio to -4.3% in Bermuda Dunes.
The Briggs Group / Coldwell Banker Realty | Laurie Briggs DRE 01896117 | Tim Briggs DRE 01898254 | Coldwell Banker Realty DRE 00616212