Here’s what has been going on in our greater Palm Springs area real estate market.
In general, we have continued to be in a very strong seller’s market. In the video above, you can see a slide that shows the correlation between the days on market and the months of sales. The red line, representing months of sales, is the ratio of inventory divided by the sales rate, and it technically measures how long it has been taking to sell the entire inventory at the current sales rate.
Due to growing sales and record-low inventory, the months of sales ratio is again at a historic low of 2.4 months. On November 1 of 2019, the ratio was 3.8 months. This indicator is confirmed by another important time metric called the median number of days on the market, which is currently 43 days, compared to 62 days at this same time last year.
On the next slide, the months of sales ratio is calculated in different price brackets. The inventory of homes in each price bracket is divided by the sales rate in that price bracket. The ratio in each bracket continues to be below the levels we saw a year ago, and is less than three months in every bracket under $900,000. Once again, this is confirmation that our strong housing market does stretch across all price ranges. The extremely low ratios from $600,000 to $900,000 are unusual for these higher price points.
Valley inventory continues to hover at historically low levels. On the next slide in the video, you’ll see that on November 1, there were only 2,014 units for sale. This is far below previous years—last year, there were 3,010 units for sale, and the year before that, there were 3,173 units available. Although many attribute the low inventory to the current pandemic, inventory has been continually declining for over five years, so the cause of currently low inventory might be more complicated than many think.
In the slide at 2:39 in the video above, the tables compare the median price of attached homes to detached homes in all nine major cities in the Coachella Valley. Seven cities now have year-over-year, double-digit price increases for detached homes. The four cities with the largest increases—La Quinta, Desert Hot Springs, Cathedral City, and Palm Springs— range from 17.3% to 38.9%. The median detached home price in Palm Springs is now 30% above the all-time high record in 2006. Three cities showed double-digit price increases for attached homes—La Quinta, Palm Springs, and Rancho Mirage.
For buyers, interest rates are on average 1% lower than they were this time last year, creating affordability despite the price appreciation. This, in combination with the general desire to secure private space and the desire of most employers to work from home as we ride out the pandemic, has fueled demand and reinvigorated buyers to secure properties.
If you’re a seller, our continuously low inventory numbers point to now being a great time to sell in the greater Palm Springs area, as this is the type of market where you’re going to get the highest price for your home.
If you have any questions about the market or how we can assist you in your unique situation, we’d love to help you. We’ve helped many buyers and sellers through the process during this pandemic. Just give us a call, email, or text, and we’ll get right back to you.