Home sales in Palm Springs saw a decline of 17% in June as a seasonal dip began to play out, mirroring much of the Coachella Valley.
According to the latest Greater Palm Springs Realtors Desert Housing Report, sales throughout the valley in June declined 23% compared to that month last year. That’s partially in line with the traditional seasonal sales slumps, and partially because of the lack of housing stock, especially homes priced under $500,000.
“(T)he decline is not evenly distributed by price range,” the report states. “Almost all the decline is in homes priced under $500,000. This is because more homes are moving into the higher price brackets. There are almost no sales – both condominiums and single-family residences – of homes priced under $200,000.”
In total, 1,531 homes were listed for sale as of July 1, an increase of 877 over the number available on that day last year, but still 800 fewer than were available on July 1, 2020. The lack of housing in all price ranges impacts the level of home sales.
The largest year-over-year decrease in home sales in the valley was in La Quinta, where sales dropped by 43%. In that city, the price of the average sized detached home, or homes that don’t share a wall with another home, rose from $816,536 last year, to $1.049 million this year — a 28.6% increase.
Desert Hot Springs was the only city in the valley to not experience a decline in sales. Housing sales actually increased in the city by 14%, most likely because homes there are among the most affordable in the valley.
The price of the average sized home in Desert Hot Springs is $405,589. Last year, the average price of a home in the city was $317,552 — a 27.7% increase.
In Palm Springs, the price of an average sized detached home increased from $1,045,196 last June to $1,412,962 this year — a 35.2% increase.
Median prices for detached homes in the entire valley rose from $599,000 in January of 2021, to $700,000 in June of 2022. That’s a 16.9% increase.
For attached homes, or homes that share a wall with another home, median prices in the valley rose from $365,000 in June of last year to $490,000 in June of 2022. That’s a 34.2% increase, but a slight decrease of $1,056 from last month.
“Besides the seasonal slow down, the forces that have been driving prices higher – high sales and low inventory – are starting to abate due to rising mortgage rates and high prices themselves,” the report states, indicating that as mortgage rates increase, housing prices should decrease.
The mortgage rate is now over 5.3%, trending down slightly from a high point in June.
“Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise,” writes Freddie Mac on its website. “While the drop provides minor relief to buyers, the housing market will continue to normalize if home price growth materially slows due to the combination of low housing affordability and an expected economic slowdown.”