Low Inventory Props Up Prices in April

The Coachella Valley real estate market continues to chart an interesting path a few months into 2023. After starting the year slow, the market showed increases in activity over February, March, and April. The April numbers indicate the market is experiencing unique conditions with some reasons for optimism, but we are still far off the level of activity we observed just a year ago. Continue reading to see the April numbers and some thoughts on what they mean. As with all our market updates, the numbers and analysis are representative of the major Coachella Valley resort cities, spanning from Palm Springs to Indio. If you are interested in learning more about the market in a specific city, community, or neighborhood, please connect with your local Bennion Deville Homes real estate professional. We offer the local knowledge, vast resources, and deep network necessary to unlock possibilities for your real estate needs.

April began the second quarter of the year with a continuation of many trends we pointed out in March. The key difference month-over-month, however, is in the lower number of homes hitting the market. The sluggish pace of homes going up for sale continues to define the 2023 market and impacts the overall conditions we are experiencing. Fewer homes were made available in April than in March of this year, and the figure is significantly lower than the year prior, too. With tight inventory creeping into the market, the number of homes sold dipped slightly, while the sale price increased, and the sale pace quickened. On a positive note, pending sales surged, even outperforming last year’s figure by a strong margin. With the Fed signaling rates are poised to remain at current levels and no more planned increases coming, we will see if prospective homebuyers are encouraged to make their move, or if the combination of higher rates and rising prices will keep potential home shoppers on the sideline. Home prices will stay elevated as long as inventory remains low. However, as evidenced by the deepening listing discount, those sellers who price and market their homes properly will sell them quickly. Despite lower inventory, home buyers are still wary of overpaying for homes.

There were 677 homes sold in April, a 27.4% drop from last year and a 2.6% dip from March. The market welcomed 862 properties, a 28.6% decline year-over-year, and a 17.9% drop month-over-month. Forecasting future sales, 1,030 homes entered pending status, a 12.6% increase over last year and a 33.8% surge over the prior month. The median sale price of a home ended the month at $628,000, a 1.3% bump over last year and a 4.7% increase over March. The price per square foot ended at $432, a 2.5% decline year-over-year but an 8.8% monthly increase. The sale pace, or average days on market, clocked in at 55 days to sell a home, a 103.7% increase (slower) from last April, but a 5.2% decline (faster) from March. The listing discount, calculated by dividing the sale price by the list price, was 96%, signifying a 4% discount off the list price, a 5.9% decline from the same month last year, and a 1% decrease month-over-month. Overall, the market has a 2.5-month supply of homes to meet demand, a 212.5% annual increase but a 3.8% monthly decrease. A 6-month supply of homes is considered a balanced market, indicating that sellers still have an advantage over buyers.