The Coachella Valley real estate market has entered a neutral market! After two years of a hot seller’s market, we are now returning to a balanced market where neither the seller nor the buyer has the upper hand. Everything is NEGOTIABLE!
We have seen a steadily increasing number of homes available for sale, home selling prices are no longer on the rise, and buyer activity has slowed down compared to this time last year.
With the weekly increase in inventory, there are over three times as many homes on the market as in January. That’s good news for buyers who waited to buy, as they now have a more extensive selection of homes from which to choose.
Due to rising interest rates and economic tightening, buyer activity has flattened, especially at lower to mid-price points where many buyers are financing their purchases. With fewer buyers in the market, many sellers are more willing to negotiate on the selling price or give incentives to buyers, like providing credit to buy down the mortgage interest rate.
While interest rates are a concern for many buyers, we anticipate that interest rates will drop significantly next year as the inflation numbers come down. This will allow buyers who took out a loan at a higher interest rate to refinance and realize a significant reduction in their monthly mortgage payment.
Let’s take a look at the numbers for October 2022 and see how they compare to October of last year.
We saw a +113.9% increase in the number of homes for sale in the Coachella Valley in October 2022 compared to October 2021. While the 1,910 homes available for sale have increased by +15.2% from last month, it's more than doubled from a year ago. While that’s a substantial increase in inventory, this number is still less than the normal inventory from the pre-COVID market.
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Home sales were down significantly from this time last year. The 439 homes sold last month was a -44.5% drop over October of 2021, and that drop in sales has been a contributing factor to our rise in inventory. Buyer activity is roughly half what it was this time last year.
Our average selling price in The Coachella Valley was up over October of last year, with the average home selling for $759,000. While that’s a good increase of +7.5% in average selling price over last year, it’s a much smaller percentage increase than we experienced in the previous two years.
Days on the Market went up by +32.4% last month, with the average home selling in 45 days.
When comparing this month's numbers to the month prior, we find that home sales have decreased by -14.1% in October compared to September. Interest rates rose rather quickly last month and impacted sales activity.
The month-over-month average selling price has increased slightly, with the average selling price up +0.7% from the previous month. We’ll continue to track this number to find out if we’ll see a +/- in selling prices or, as many experts have predicted, simply a slower rate of increase than we saw last year.
While the most desirable homes are still selling for top dollar, sellers of homes with deferred maintenance & upgrades may have to adjust their expectations on selling price as we move into the remainder of 2022.
Let's look at the key market indicators that show how our market is performing compared to last year; Average Sold Price, Number of Days on the Market, and Number of Homes for Sale.
- Average Home Sale Prices. Last month's average home sale price in the Coachella Valley was $759,000, an increase of (+7.5%) over the same month the previous year.
- Number of Days on Market. Days on the market have decreased (+32.4%), and homes are selling on average for 45 days.
- The Number of Homes for Sale. There were 1910 homes for sale last month, a (+113.9%) increase over October the previous year.
Interest rates have gone up this past month. The average 30-year fixed-rate mortgage currently sits at 6.625%, while today’s 15-year fixed mortgage rate is 6.125%, and the jumbo 30-year fixed rate is 6.250%. We anticipate these rates to fluctuate until we see a reduction in the overall inflation rate.
City Standouts! What's Up and Who's Down?
You can get a better view of the trends in our market when you look at the numbers for each major city in the area.
The Number of Homes Sold in October 2022 vs. October 2021 have dropped in all cities in the Coachella Valley. The most significant drop in sales was in Cathedral City, down (-51.2%), and Bermuda Dunes, down (-50%).
The Average Sale Price was up in all but three cities, with Coachella notable for its (+45.4%) increase over last October’s sales. Selling prices were down last month in Cathedral City (-0.4%), Palm Desert (-0.7%) & Indian Wells with a (-10.1%) decrease.
The Number of Days on the Market increased for all cities in the Coachella Valley. Coachella saw a (+200%) increase in selling times, while Desert Hot Springs (+2.8%) and Rancho Mirage (+7.7%) saw only modest increases in selling times.
City Watch - Palm Desert
Number of Homes for Sale = 411 (+146.1%)
Number of Homes Sold = 97 (-47.3%)
Average List Price = $854,910 (-2.34%)
Average Sale Price = $674,043 (+ 0.72 %)
Average Days on Market = 46 (43.75%)
If you're considering putting your home on the market, let us help you get it SOLD! Now, more than ever, marketing matters! Our world-class marketing plan, with online ads, TV ads, and social media exposure, is critical in this shifting market. Call now for a free seller consultation, and let us help you decide if now is the right time to sell your home.
If you'd like a detailed market report for a specific city, email us and let us know which city reports you'd like to receive.
Call us at (760) 625-7229, or visit www.thehamiltonregroup.comfor an easy-to-use home search and information on how we can help you with all your essential real estate needs.
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