The “corrective turn” we’ve been talking about in the housing market appears to be continuing, according to the latest report from Greater Palm Springs Realtors.
Driving the news: Across the Coachella Valley, the median price for a detached home fell by about $12,000 to $670,000 in September. That’s still 15% higher than the same time last year. “There is no doubt price increases are starting to slow,” the report states.
- In Palm Springs, the median price for an average-sized detached home sits at $1.3 million, which is 14% more than this time last year but roughly the same as August.
The three-month average of sales last month was 581 units a month, 32% below last year.
- Comparing those numbers to an average pre-pandemic year when September sales averaged 784 units, sales are running 25% below normal.
- Coachella is the only city that had higher sales last month compared to a year ago. Sales in that city were 42% higher. The cities with the largest percentage of decline in home sales were Rancho Mirage, La Quinta, and Cathedral City.
What they’re saying: “This is a significant sales decline and, with the Federal Reserve tightening interest rates as it is, it does not appear these numbers will turn around anytime soon.”
As for housing inventory, the valley had 1,807 units available as of Oct. 1 — 214 units higher than one month ago and 924 more than last year at this time.
- Interestingly, this monthly increase is opposite to nearly every other region in the state. The report says inventory decreased for most regions last month.
The median number of days in market last month was 32 days, which is eight days more than the same time period last year. The report’s authors are confident that we’ve seen the lowest lows of days in market, “[We] believe it will rapidly increase back to 50 or 60 days, which is historically ‘normal’ for the region.”
- Indian Wells and Rancho Mirage have some of the lowest days in market rates.
One of the most staggering signs of the turbulent housing market over the past year was the number of homes selling above list price. Last month, 28% of sales were above list price compared to more than 50% this time last year.
- Authors of the report are confident we’re headed back to normal. “[W]e fully expect the ratio will be back to historic norms of around 10% near the end of the year.”
Only four valley cities have selling premiums for detached homes, with the highest being in Coachella and Desert Hot Springs at .6% and .3%, respectively.
Looking ahead: The report expects inventory to continue to increase, meaning it might reach 2,500 units by February. “While this would be an improvement, inventory still has a ways to go before it’s back to past norms.”
- The report notes that there’s not enough data to know if the trend toward lower prices will continue through the end of the year.