The first statistic I’d like to share with you is our market’s absorption rate, also called months’ supply of inventory, which defines how many months it would take to sell every home that was currently available on the market if no new homes were listed. As of November 1, our months’ supply of inventory was 3.7 months, which is up 0.7% over last month due to seasonal trends. When comparing this number to the same date over the past six years, this is by far the lowest reading, and it’s a sign that the market continues to be a seller’s market.
The average days on market in October of 2018 was 64 days, which is 3 days fewer than this same time last year.
Looking at months of supply in terms of price ranges and comparing each price bracket to this same time last year, the ratio continues to be lower across all brackets. This shows that the market improvements over the last two years spread across all price ranges. That said, it would be nice to see the ratio for homes over $1 million drop down from the current 10.5 months to between eight and nine months.
As of November 1, Coachella Valley had 3,173 units available in their inventory. This is an increase of 505 units over last month. However, this is a seasonal increase; there are large jumps between October 1 and November 1 every year. When we compare it to previous November 1 numbers, we see that this is the lowest inventory of the last six years. This pattern of each month being the lowest inventory compared to previous years has been occurring for over six months now.
The increasing strength that we see in the two regional price indices is also showing in city median prices for both detached and attached homes. Changes in the median prices for detached homes show positive numbers that range from a high of 31.3% for Indian Wells down to 4.1% for Cathedral City. In the attached market, four cities—Indio, La Quinta, Palm Springs, and Palm Desert— show double-digit increases, while only Cathedral City has negative changes.
Interest rates have continued to slowly increase, and the Federal Reserve is on track to raise rates one more time this year. This continues to put some urgency on buyers looking to finance so that they can secure properties and lock in an interest rate. As rates increase, the number of buyers qualified for the higher price brackets will decrease; this may begin to create a softening effect on pricing.
Our continued price appreciation and lower inventory make it a great time to consider putting your house on the market in the Greater Palm Springs area. For buyers who are planning to finance their purchase, there is a little more urgency to get into the market now before rising interest rates negatively affect your purchasing power.
If you have any questions about the value of your home or if you’re interested in exploring the possibility of purchasing a property in the Greater Palm Springs area, we’d love to assist you. Please reach to us with any questions you have and for an opportunity to discuss your unique situation.