The Coachella Valley real estate market has clearly moved into a neutral market with over five months of inventory available. That’s a significant increase from the first half of 2022, where months of inventory were often below one. With more options for buyers and sellers seeing more competition from other sellers, the frenzied pace of sales from the past two years has ended.
While buyer activity has trended downward since mid-year, we saw a strong increase in Pending listings last month. That could indicate that buyers are ready to return to the market as more homes become available for sale and sellers become more realistic about setting their listing prices.
We have seen more canceled and expired listings in the last few weeks than at any time in the past two years as sellers adjust to the new reality: overpriced homes just aren’t selling. This market shift has enticed cash buyers to look for discounts from listing prices, but a well-renovated home in a great location, priced right, will still get a lot of interest and will sell at full price or above.
With the weekly increase in inventory, there are 336% more homes on the market than 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.
While interest rates are a concern for many buyers, we anticipate that interest rates will drop significantly over the next few months 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 November 2022 and see how they compare to November of last year.
We saw a +176.5% increase in the number of homes for sale in the Coachella Valley in November 2022 compared to November 2021. While that’s a substantial increase in inventory, this number is still well below the normal inventory from the pre-COVID market.
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Home sales were down significantly from this time last year. The 409 homes sold last month was a -50% drop over November of 2021, and that drop in sales has been a contributing factor to our rise in inventory. Buyer activity is half what it was this time last year.
Our average selling price in The Coachella Valley was up over November of last year, with the average home selling for $784,000. While that’s an increase of +7.3% in average selling price over last year, it’s a much smaller percentage increase than we experienced in the previous two years. Selling prices had been trending slightly downward through July, but they have risen slightly over the last two months.
Days on the Market went up by +22.9% last month, with the average home selling in 43 days. That number has been trending upward since June of this year.
While the most desirable homes are still selling for top dollar, sellers of homes with deferred maintenance & aging upgrades will have to adjust their expectations on selling price as we enter the new year.
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 $784,000, an increase of (+7.3%) over the same month the previous year.
- Number of Days on Market. Days on the market have decreased (+22.9%), and homes are selling on average 43 days.
- The Number of Homes for Sale. There were 2021 homes for sale last month, a (+176.5%) increase over November the previous year.
Interest rates. The average 30-year fixed-rate mortgage currently sits at 6.500%, while today’s 15-year fixed mortgage rate is 6.000%, and the jumbo 30-year fixed rate is 6.000%. 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 November 2022 vs. November 2021 has decreased dramatically in all cities, with the largest percentage drops in Coachella (-78.3%), La Quinta (-60.4%), and Palm Desert (-58.3%).
While sales were down, Average Selling Prices were up in every city except for Bermuda Dunes (-1%), & Indian Wells with a (-17%) decrease. Cathedral City stood out with a strong (+23.2%) increase over last November’s average sale price, followed by Desert Hot Springs (+21.1%) and Palm Desert (+18.2%).
The Number of Days on the Market increased for all cities in the Coachella Valley except for Bermuda Dunes down (-34.5%), Indian Wells (-28.6%), and Coachella (-38.4%).
City Watch - La Quinta
Number of Homes for Sale = 342 (+202.7%)
Number of Homes Sold = 59 (-60.4%)
Average List Price = $1,579,665 (+13.2%)
Average Sale Price = $1,246,328 (+ 16.2 %)
Average Days on Market = 52 (+26.8%)
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.com for 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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