Fact: Investors who diversify into
real estate outperform those who don’t

(Coachella Valley Real Estate is RED HOT)

Mid-Year 2022 Residential Outlook

The median price of a detached home in the Coachella Valley in November 2021 was $615,500, compared to $495,000 a 12 month increase of $125,500 - over 25%! Demand was the major story in real estate in 2021. While demand across the US has increased dramatically driven by low interest rates, the demand in the Coachella Valley is increasing as more and more people are searching for homes in tertiary markets. At the same time, there has been a California-wide shortage of new home starts signaling the perfect storm for historic price increases. However, some cities in the Coachella Valley fared better than others. Bermuda Dunes saw a 44.4% increase in 12 months and a 223% increase since the low prices seen in the 2011-2012 season. While Rancho Mirage, for example, saw a monstrous increase of 32.3% year over year, this increase still only ranks them the fourth highest increase in the Desert. These never before seen price jumps are a direct result of the demand increase.

A historic lack of inventory continues to be the overall driver of valley housing. On September 1st 2021, the median value for the “months of sales” ratio throughout the Valley was 8/10 of a month; this compares to 2.5 months year over year. The ratios have been hovering around these historically low levels for over seven months now. When compared against year ago levels, the condition of record low “month of sales” ratios is found in almost every city. Only Cathedral City, Coachella and Desert Hot Springs have ratios comparable to year ago numbers.

The median value of “days in the market” for the entire region continues to decline. It is now at 25 days compared to 56 days a year ago. This is another metric that points to a housing environment with little price risk. Desert Hot Springs has the lowest number of days for detached homes at just two weeks, followed by Palm Springs at 19 days. These cities also had the least number of days for attached homes.

In August the median value for “Price Discount from List” was again 0.0%, which is the same discount it’s had for the last six months. Since so many homes are selling right at list price, the median value is exactly 0.0%. When using average discount instead of the median value, detached homes are selling, on average, 1.8% above list price.