Since March 19th, we have seen a definite shift in the Coachella Valley market and, as a result, many are wondering if now is a good time to consider a home in the desert. Most of our buyers
Coachella Valley Real Estate Market In A Lockdown World
Dated: May 26 2020
Since March 19th, we have seen a definite shift in the Coachella Valley market and, as a result, many are wondering if now is a good time to consider a home in the desert. Most of our buyers come from outside the Valley and these are the most frequently asked questions they are asking today:
What’s happening with the overall real estate market in the Coachella Valley?
What impact is this having on prices?
Are there a glut of homes on the market?
Is this similar to the impact of 2008-2009?
As a real estate broker here in the Desert for almost 20 years, I have been through a couple of these “cycles” and I will say that this cycle “feels very different”. Prior to the shutdown, the valley was headed for another record year. The market was very stable with no indications of a “bubble” and mortgage rates continued to remain at record lows. Compared to what we experienced just over 10 years ago, we are not seeing overleveraged buyers and manipulated underwriting processes – this was not an artificial, man-made regional crisis, it was a natural, global crisis which affected every country and every economy around the globe. The economic pillars were strong going into March and based on what we are seeing today, those same pillars appear to be holding firmly:
April 2020 Inventory was 2,982 vs 3,643 in 2019. A decrease of 19%
$/sf on closed sales in April 2020 of single-family homes was down only 2.4%
$/sf on closed sales in April 2020 of condos was higher by 5.9%
The 3-month moving average for days on market was 52 days in 2020 compared to 66 days in 2019. A decrease of 17%.
The average days on market for April 2020 SFH was 78 compared to 76. Flat
The average days on market for April 2020 Condo was 68 compare to 70. Flat
It’s obvious that the 3 key metrics of the real estate market - Inventory, absorption, and price – all remain stable or positive in the face of this crisis. That was not the case in 2008 – at that time, we saw all three metrics trending steeply negative and they didn’t stabilize for almost 2 years.
So let’s look at those questions again:
What’s happening with the real estate market in the Coachella Valley? So far, very stable.
What impact is this having on prices? No impact.
Are there a glut of homes on the market? No, there are fewer actually.
Is this similar to the impact of 2008-2009? No – it’s completely different.
What is different about this crisis is that the number of potential buyers coming from dense cities like LA, SFO, and Seattle has increased dramatically. They are looking for space; they are looking to get out of the chaos of the city; they are looking for better home values. The Coachella Valley affords answers to all these afflictions. I anticipate that this trend will continue even through the warmer summer months.
In closing, I have experienced four things in the last 2 months that are not present in a typical slowdown:
Multiple offers from multiple agents
Offers on off-market pocket listings
Closing prices that are above the asking price
We are seeing these conditions today because the basic foundation of this market remain strong and the buyer demographic today sees the Coachella Valley as a favorable option compared to where they currently live. They can purchase a home here for less than half of what it would cost in the city, the lifestyle elements are incredible, and if you really want to a more urban experience, it’s an easy 2-hour drive away. The Coachella Valley is poised to take full advantage of these conditions and, in my opinion, this is a very good time to purchase real estate here in the desert.
Contact Roger Dibble Broker at Casamoré Properties in La Quinta, California at firstname.lastname@example.org or 760-621-7344
Originally from Bemidji, Minnesota Roger Dibble has been a resident of the Coachella Valley since 1974! There are not too many other real estate professionals in the area with the local knowledge and....
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