Our May 2020 Coachella Valley real estate market recap covers the major market trends around the Greater Palm Springs Area. The biggest factor on the housing market, as with other industries, is the outbreak of and response to the coronavirus. With local regulations starting to loosen, the major question becomes how the market will respond. Comparing the numbers year-over-year may paint a bleak picture, but there are some signs that provide optimism for the long-term health of our desert real estate market. As with our other market recaps, the numbers we provide below are based on the entire region. If you would like to learn more about a specific city, community, or neighborhood please reach out to a Bennion Deville Homes real estate professional. We look forward to unlocking possibilities for you.
The May 2020 market data shows similar trends to what we saw in the month of April, with the market experiencing big changes due to the effects of the coronavirus. This is the second full month under strict public safety guidelines, and while some health and safety regulations were lifted toward the end of May, there are still considerable measures in place that make traditional real estate activities, such as showings and open houses, difficult or non-existent. However, the industry has adapted admirably, evidenced by the production of the market. Sales activity was down over 50% year-over-year, while inventory declined by just over 20% as well. However, there were lots of positives to take away from the numbers. The sales pace quickened, the listing discount (sold price versus list price) adjusted down slightly, and the average closed sale price of a home, as well as price per square foot, was up significantly. This is the second straight month we noted declines in inventory and a faster sales pace, and the first time we saw a rise in home prices since coronavirus regulations took effect. The good news is there is still plenty of interest in purchasing a home in the desert and although activity in the market may be down, prices are staying at strong levels.
In our April market recap, we predicted the advent of online and digital tools coupled with pent up buyer demand will help the desert real estate market recover quickly, and soon. We will keep a pulse on the market throughout the month of June to see if the easing of restrictions leads to a boost in activity. Our instinct tells us as more businesses reopen and people return to work, we expect consumer confidence to increase, which will translate into sales. Those who were waiting out the economic recovery before making their move will start to come back and put their homes on the market and seek out properties to purchase. Because many home buyers and sellers were in a holding pattern during what is usually the busiest stretch of our desert real estate season, we also expect to see a ramping up of activity, which will lead to an incredibly busy summer of real estate sales. All of this shaking loose while interest rates remain at historic lows and home prices sit at affordable levels creates the recipe for a swift recovery and a huge summer.
Overall in May, 467 homes changed hands, a 55.5% drop from the same period last year. This activity accounted for $273,540,000 in sales volume, a 48.5% decline when compared to May 2019. The average closed sale price hit $585,700, a notable 15.8% increase over last year. The price per square foot likewise saw an 11% jump, finishing the month at $268 per square foot. At the end of the May there were 2,726 homes for sale, a 20.3% decline from May 2019. The sales pace, noted as average days on market, clocked in at 81.1 days to sell a home, a 9.3% drop (faster pace) from last year. The listing discount, or sold price versus list price, finished at 95.85%, a 0.9% dip year-over-year. Overall, there is a 5.8-month supply of homes on the market, a 75.8% increase over last year. A 6-month supply is considered a neutral market, pushing the Coachella Valley closer toward a balanced market. Last month’s trend was similar, indicating that we are shifting from a seller’s market to a buyer’s market.