Recapping the Desert Real Estate Market In Second Quarter 2022
Dive into the latest Coachella Valley real estate market trends with our second quarter 2022 recap. We have been tracking emerging trends that could signify a shift in the market for the past couple of months. The quarterly numbers echo these same patterns, indicating a shift in the market is underway. Since the monthly numbers have been fascinating, we also break down data from the month of June. Read on for the full analysis. As with all our market recaps, the numbers presented below reflect trends across the desert resort region. If you would like more information about what’s taking shape in a particular city, community, or neighborhood, connect with your local Bennion Deville Homes real estate professional. We will unlock possibilities for you.
What a difference a couple of months can make for a market. In our first quarter 2022 report, the sustained trends of scarce inventory, rising prices, and strong demand from the prior 12-18 months were still prominent across the valley. The numbers paint a different picture for the second quarter of 2022. Inventory is rapidly climbing while activity is heading in the opposite direction. Prices remain stable due to still low inventory, but there are signs that price growth will be modest as opposed to explosive. Despite rising inventory and lower sales activity, the sale pace remains incredibly fast, and the listing discount reflects a premium for homes, coming in above 100% again. However, as we head into the third quarter and the thick of the summer months, these two categories may see some regression correlated to higher inventory and cooler demand. More properties hitting the market will give buyers additional options to consider, so we expect to see an actual listing discount return and the sale pace slow down as well. Overall these shifts are a positive sign and will ultimately lead to a better long-term outlook for desert real estate. The frenzied pace of the pandemic-era market was simply not sustainable. Recent deceleration of sales activity and the ripple effect it has across the major reporting metrics is a signal that this cooling will ultimately lead to a healthier Coachella Valley real estate market. This is welcome news for both sellers and buyers as prices remain robust, while buyers have some leverage for the first time in years.
There were 2,584 homes sold in the second quarter of 2022, a 23.2% plummet from the same quarter last year, and a slight uptick of 0.5% from the first quarter of 2022. Those sales created over $2.1 billion in sales volume, a 33% increase over Q2 2021, and a 17.3% improvement over the prior quarter. Additionally, the market welcomed 3,452 listings over the course of the quarter, a 6.8% increase over the same quarter last year and a 10.5% bump from the first quarter of 2022. Over the last 3 months, 2,641 homes went into pending status, an 18.6% drop from the same period last year and a modest 2.7% dip from last quarter. The median sale price of a home finished the quarter at $619,000, a 24.2% increase over last year and a 6.4% increase over the prior quarter. Likewise, the price per square foot was $432.00, a 30% jump over Q2 2021 and a 5.1% increase over Q1 2022. The sale pace, noted as average days on market, clocked in at a swift 27 days, a 32.5% decrease (faster) from the same timeframe last year, and a 19% decline from the prior quarter. The listing discount, calculated by dividing the sale price by the list price, ended the quarter at +1.3%, or 101.3%, a 1.7% climb over last year and a 1.3% increase over the prior quarter. Inventory levels ended the quarter at 1.3 months, a 116.7% vault over the same timeframe last year, and an 85.7% improvement over last quarter. A balanced market is considered around 6 months. Although more homes are hitting the market, there is still a shortage of supply to meet demand.
Shifting focus to the monthly patterns emerging in the market, the June numbers continue to show a shift in the market. Inventory is way up, sales activity is dampening, and negative price momentum showed up in the end-of-month numbers for the first time in a very long time. Despite this, the sale pace remains at under a month and the number of pending sales was up month-over-month (indicating future sales). Although the market is seeing great strides in adding more inventory, the figure is still low compared to a normal, healthy market. The good news for prospective homebuyers is that there are more options available, and as sellers compete for the attention of homebuyers, prices should adjust to reflect that as well.
In June, the market saw 745 homes change owners, a 29.5% plummet in activity year-over-year, and a 17.9% drop off from the prior month. Those home sales created a sales volume of nearly $648 million, a 28.1% increase year-over-year but a 12.7% dip month-over-month. The market welcomed 1,076 homes in June, a 6.4% increase over last June but a 7.9% dip from May of this year. There were 906 homes that entered pending status during the month, a 10.3% drop from the same time last year but a 10.5% increase over the prior month. The median sale price of a home ended at $602,000, a 20.4% jump year-over-year but a 5.2% dip from last month. Similarly, the price per square foot ended the month at $420.00, a 24.6% increase year-over-year but a 3% decline compared to May. The average days on market for a listing (sale pace) ended the month at 27 days, a 22.9% decrease (faster) than last year and the same as last month. The listing discount, noted as the difference between the sold price and list price, ended the month at 100%, or no discount, the same as last June but a 2% drop from May. Overall, the market has 1.9 months of inventory to feed demand, a 216.7% increase year-over-year and a 58.3% increase over the previous month. A balanced market is considered at 6 months of supply, so although the monthly figure represents a dramatic improvement there is still a sizable delta between current conditions and market equilibrium.
If you are considering the sale or purchase of a Coachella Valley property, we would be honored to have the opportunity to assist you. Please reach out to a Bennion Deville Homes real estate professional for a free market analysis of your home or to discuss the lifestyle you are looking for in your next abode.
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