The August 2021 Desert Housing Report (compiled by CDAR and PSRAR) is out, and I thought I’d share some of the highlights. In summary, sales slowed for the second month and more homes were on the market than the previous two months. While the change is not significant, it is starting to look like a trend, at least in the short term. This would be welcome news to buyers who have had a difficult time finding a home. If you’re thinking about selling your home, it may be time to give it serious consideration as inventory begins to increase. To read the full report, simply Click Here or click on the highlighted links below to see that individual chart.
Coachella Valley Housing Inventory
On September 1st total inventory in the Valley was 836 units, which compares to 1,959 units a year ago. This lack of inventory continues to be the overall driver of Valley housing and we are somewhat surprised inventory did not begin to increase after the wide distribution of the COVID vaccine. We had fully expected new listings to dramatically increase as homeowners felt safer to present their homes to strangers. We’re monitoring the situation for signs of its occurrence.
Coachella Valley Median Detached Home Price
In August, the median price of a detached home in the Coachella Valley was $581,500. This compares to $495,000 a year ago, which is an increase of 17.4%. We have entered the seasonal period when prices of detached homes generally begin to taper after the strong winter and spring period. Because of the price rise that began last July, year over-year price comparisons should also begin to moderate. We believe the major housing metrics are beginning to return to more normal numbers, but at a much higher price level. We see little price risk.
12 Month Change in City Median Prices
Four cities have year-over-year price increases in detached homes over 30% – Indian Wells, Rancho Mirage, Desert Hot Springs and Indio. All cities except Rancho Mirage and La Quinta have exceeded the all-time high price made in 2006. Three cities have price increases over 30% for their attached homes – Indian Wells, La Quinta and Rancho Mirage. For the first time in a while, we’re seeing the largest price increases in higher priced homes.
Detached, Attached and Total Sales - 3 Month Moving Average
As the chart of three months sales clearly shows, sales have been slowing for the last three months. Some of this decline is seasonal in nature but some of it also represents a slow return to a more normal market. Total sales in August were only 3% above last August, which marked the start of last year’s sales surge. We believe it’s okay to see this as it’s hard to imagine sustaining those high numbers.
The median value of “days in the market” for the entire region continues to decline. It is now at 25 days compared to 56 days a year ago. This is another metric that we believe points to a housing environment with little price risk. Prices may stop moving much higher, but we don’t see them declining, at least not permanently. Prices may come back a little for seasonal reasons but should recover again at some point.
The median value for “Sale Price Discount from List” for detached homes in August was again 0.0%, which is the same discount it’s had for the last six months. As we’ve explained, since so many homes are selling right at list price, the median value is exactly 0.0%. When we calculate the average discount of detached homes, which averages the price discount of every sale, the average is a premium of 1.8%, which means the average home is selling for 1.8% above list price.
To get a little closer look at “Price Discounts” we’ve decided to add two charts that show the average value of this metric in each city for both detached and attached homes. We use average value instead a median value to overcome the limitation of using the median value when there is a large quantity of discounts at exactly the number. A plus percent means homes are selling above list price, a negative percent means below. Almost every city, except Indian Wells, is currently selling detached homes above list price.