Desert Housing Report December 2022
PRICES: The median price of a detached home in the Coachella Valley fell in December and is currently $640,000, which is up 3.7% year over year. The current price is 9.9% below the peak of $710,000 of a few months ago. Five cities still have double digit price gains for their average size homes but two important cities – Palm Desert and Palm Springs – have year over year price changes in detached homes of .5% and -4% respectively. The median price for attached homes was $440,000, which is down for the seventh month. This price is down 10.4% from its May peak but is up 3.5% year over year. This has returned the rate of growth back to its long-term average of 4.5%.
SALES: It’s distressing that home sales continue to decline. The three-month average of sales in December was 444 units a month, which is 49.4% less than last year. Before the pandemic, December sales averaged 717 units per month, so sales are now running 38% below average. The largest percentage declines are in the cities of La Quinta at 58%, Indio at 52%, Palm Desert at 50% and Cathedral City at 49%. The cities of Desert Hot Springs and Indian Wells have the smallest declines.
INVENTORY & “MONTHS OF SALES” RATIOS: On January 1st , Valley inventory stood at 1,911 units, which is below last month but 1,304 units more than last year. Some of the inventory gain over the last few months was seasonal. The Valley’s “months of sales” ratio was 2.7 months, which is down slightly from last month. This fundamental ratio measures supply versus demand and even though prices have been declining, a Valley ratio this low historically implies that the balance of supply and demand still favors the seller. This means that some of the price decline is due to the change from a premium to a discount market and not all from a decline in offering prices.
DIM: The median selling time in the region continues to increase. At the end of December, the median number of “days in the market” was 37 days, which is ten days more than last year. We believe it will soon be back to the region’s 50 or 60 day average relatively soon. The city of Palm Springs has the lowest median selling time for detached homes at 29 days, followed by Indian Wells. In the attached market, Bermuda Dunes has the shortest median selling time at 20 days.
