After a busy summer for realtors in the Coachella Valley, the real estate market continues to boom with rising prices and a shrinking inventory.
Because of growing sales and record low inventory, the “months of sales” ratio is at a record low of 2.5 months. The ratio is really a measurement of demand versus supply and a low ratio of 2.5 months is a mathematical sign that demand far exceeds supply. Low inventory in the valley is driving prices up, the median price in September was $510,000, which is up 26% over a year ago. This is the largest percentage price increase since 2012. The median attached home price in September was $305,000, up 12.5%.
The median price of a detached home in La Quinta is up almost 30% above year ago levels while the median for Palm Springs prices is up 16% and Cathedral City up 14.5%.
Homes for sale in September were being scooped up more quickly than last year, as buyer demand continues to spill over into the fall season. The typical home spent 49 days on the market this September, which is 16 days fewer than last year and three days fewer than last month.
Interest rates have plunged, with the average rate on a 30-year fixed-rate mortgage now below 3%. However, the Mortgage Bankers Association reports that lending standards are tightening, which makes it a bit more difficult for some buyers to qualify. At the same time, unemployment remains substantially higher than a year ago due to COVID-19. Despite all this, buyers are out in full force this fall, showing amazing resilience in the middle of a pandemic.