Report: Housing market shows signs of ‘rapidly reversing’

Last month’s median price of a detached home in the valley was $710,000 — up $10,000 month-over-month and 19.3% compared to last year.

The Coachella Valley’s July housing report shows that a return to relative normalcy could be on the horizon.

At issue: Analysis of the report released by Greater Palm Springs Realtors points to several indicators — including median price, total sales, inventory, and days in the market — that show we’re on the road to a steady return to pre-pandemic levels.

  • Home prices usually slow or decline in the summer season, but that hasn’t panned out so far. “[T]he forces that have been driving prices higher – high sales and low inventory – are rapidly reversing, so we should begin to see some price correction soon,” the report states.

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By the numbers: Last month’s median price of a detached home in the valley was $710,000 — up $10,000 month-over-month and 19.3% compared to last year. For attached homes, the median price last month was $479,500, down $10,500 compared to the previous month but up 25% year over year. 

  • In Palm Springs, the price for an average size detached home in July was $1.3 million, compared to $1.1 million last year.

Zoom out: The valley’s three-month moving average of sales was 791 units a month in July — 26% less than last July and 16% below the average for July prior to the pandemic.

  • The summer is usually a period of low sales, and we may see even lower numbers this year due to last year’s sales volume. “In other words,” the report states, “some of this is seasonal, but some is also due to the recession and a reaction to the surge in sales during COVID.”

Long-term sales of detached homes are still above pre-pandemic averages, but attached sales have returned to past norms.

  • According to the report’s authors, “[T]hese longer-term sales metrics are rapidly approaching pre-pandemic levels, and we expect, over the next six months, to go below them.”

Bigger picture: One of the largest factors for the high prices of homes is low inventory. But the report shows inventory is trending up even in a season when inventory usually declines. On Aug. 1, valley inventory was 1,637 units — nearly double what was available this time last year.

  • Homes in the valley were listed for an average of 24 days in July — three more days than June. In Palm Springs, the median selling time for detached homes was 19 days, compared to 16 days last year. The city also has the shortest selling time for attached homes at 15 days. 
  • Buyers in the city were paying the highest premiums for detached and attached homes — 2.7% and 3.5% above asking price, respectively. 

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