Home sale prices in the greater Palm Springs area continued to increase, with the average sale price jumping nearly 19% over the same time last year. While home sales have been impacted by the Coronavirus and lack of inventory -- home sales were down (-57.3%) over last May -- we are seeing a dramatic increase in buyer activity over the last few weeks.
Our June 15 update on TheMondayMinute.com shows that new escrows were up 15% over the prior week, and they have shown a consistent upward trend for the last 9 weeks. At the same time, new listings are running well below normal, with (-25.2%) fewer homes on the market than we usually see at this time of year.
Last month there were 3,568 homes available for sale, compared to 4,771 homes available for sale in May 2019 … a noticeable (-25.2%) decrease in available housing over that period! Low inventory continues to be a problem here in the Palm Springs area, and with buyer activity at a 2-month high, we are clearly moving into a seller's market over the summer.
Let’s look at the three key market indicators, Average Sold Price, Number of Homes for Sale, and Number of Days on Market, for a good snapshot of the Palm Springs area real estate market and, its overall health.
- Average Home Sale Prices. The average home sale price last month in the Palm Springs area was $582,780 an Increase of (+18.6%) over the same month last year.
- Number of Days on Market. Days on market have increased (5%), with homes selling in an average of 85 days.
- The Number of Homes for Sale. There were 3,568 homes for sale last month, a (-25.2%) decline over May of last year. Inventory remains below average, if trends continue we'll see fewer homes on the market than we normally do over the summer.
Home sales are clearly down due to two factors: 1) the extremely limited inventory and 2) the temporary pause in buying activity during the 1st six weeks of COVID-19.
One factor that is driving the upward trend in average selling prices is the strength in the luxury home market. Of the 479 homes sold last month, forty-six -- nearly 10% of all homes sold -- sold for over $1M. Of that forty-six, 16 sold for over $2M, and five of those sales were for over $5M.
Interest rates are still at an all-time low and will continue to drive new purchases and refinance activity. 30-year fixed-rate mortgages rates have dropped to 3.125% and 15-year fixed loans are at 3.125%. The FHA 30-year fixed rate stands at 2.75% and 30-year fixed jumbo loans are at 3.375%.
City Standouts! What’s Up and Who’s Down?
As indicated above, the Number of Homes Sold in May 2020 vs. May 2019 was down in all cities, while average selling prices were on an upward trend.
When it comes to Average Selling Price, Palm Springs stood out with a whopping (+280%) increase over last May. This was driven by significant sales in the luxury market. Only Rancho Mirage, Palm Desert and Desert Hot Springs experienced decreases in average sold price percentages, with declines of (-2.8%), (-2.0%) and (-1.1%) respectively.
The Number of Days on Market decreased for every city in the Coachella Vally EXCEPT; Palm Springs (+7.0%), Cathedral City (+19.3%), Indio (+26.5%), and Indian Wells (+25.2%).