Our third quarter 2020 Coachella Valley real estate market recap breaks down the trends in the desert housing market. In addition to analyzing the third quarter numbers, we wanted to look at how the month of September compares both year-over-year and against the numbers we reported in August. A quarterly snapshot will show the general health of a market and is a good indicator of trend direction over an extended period of time, while the month-to-month numbers are useful as a way to project future market performance based on a shorter set of recent data. As with all of our market reports, the data and analysis take into account all desert cities and price points. If you would like to learn more about a specific neighborhood, community, or city, please connect with a Bennion Deville Homes real estate professional. We look forward to unlocking possibilities for you.
The quarterly trends echo the patterns we have seen on a monthly basis, with huge leaps and bounds comparing the year-over-year data while the quarter-to-quarter numbers are closer aligned. Year-over-year, activity, home prices, and sales volume are all up significantly. As the summer months continued forward, so did the frenetic pace of sales, and the figures show just how significant this increase was for the market. Factoring into the sharp increase in price is a steep decline in available homes, both compared quarterly and year-over-year. On a quarterly basis, the summer months saw nearly double the amount of home sales compared to second quarter 2020, indicating just how steep the market ramped up July through September. Home prices saw a mild increase quarterly, while the sales pace, noted as days on market, reduced by almost a full week of market time. Additionally, sellers received closer to asking price on their homes when compared to both quarterly and annual numbers, another byproduct of the scarce inventory and extreme demand in the market last quarter. As demand reached its apex, the supply of homes started to crater as fewer homes were put up for sale to meet the pace of the market, creating the perfect conditions for large price gains. Based on our monthly analysis (more on that shortly) we are on pace for some of these trends to continue to roll into season and possibly beyond, even as new inventory hits the market during what is traditionally a busier time for home sales.
The Coachella Valley saw a whopping 3,157 homes change owners in the third quarter, a 79.1% jump over the second quarter of this year and a 26% increase year-over-year. Those sales accounted for over $1.8 billion in sales volume, an 80.8% surge quarter-over-quarter and a 55.4% leap over the same period last year. The average home price increased by a modest 1% over last quarter and jumped by 23.4% year-over-year, finishing at $573,300. Likewise, the price per square foot valley-wide ended the quarter at $267.70, a 1.8% increase over second quarter and a 15.6% jump over the same period last year. The average days on market, or sales pace, clocked in at 81.4 days to sell a home, marking a 6.1% decline (faster) than last quarter and a slight 1.2% increase from last year. The listing discount, noted as sold price versus list price, finished at 97.4%, a 1.6% increase toward asking price compared to second quarter and a 0.6% nudge up from last year. Overall, the market finished the quarter with a scant 1.9 months of inventory, a 52.5% drop from second quarter of this year and a 42.4% decline from the same period last year. A 6-month supply represents a balanced market, so the quarterly trend is heavily favoring sellers due to high demand and low inventory.
Because 2020 is anything but a normal year, we also wanted to take a closer look at the monthly numbers from September to see if there are any trends to track as we head into the start of our desert season. As with previous summer months (July and August) , the year-over-year comparison is eye-popping. September of this year saw massive increases in activity and home prices, thanks to huge drops in inventory and skyrocketing demand for homes in the desert. Comparing September to August of this year, the numbers are less stark and offer some insight into what could lay ahead for the desert real estate market. Sales dipped slightly while the average price of a home increased modestly. Most interestingly, this is the first month in some time to see an increase in the number of homes for sale on the market. Albeit a very small increase, we will closely monitor inventory levels and their direct relationship to home prices. With the start of season underway, we anticipate seeing more homes hit the market, which may ease some of the upward pressure on home prices. However, as with everything else this year, nothing is running its usual course. We should start to get a better idea of the market’s trajectory after the October numbers are reported.
In September, the Coachella Valley had 1,050 home sales, a 39.3% increase year-over-year and a 2.4% drop from August of this year. Those sales accounted for an 80.6% increase in sales volume year-over-year but a 0.3% dip month-over-month, finishing the month at just over $630 million in total sales volume market-wide. The average home sale price ended the month a tick over $600,000, a 29.7% increase compared to last September and a 2.2% nudge up from last month. Likewise, the price per square foot finished at $278.00, a 20.5% increase over last year and a 3% jump from August. The sales pace, noted as days on market, clocked in at a brisk 74.2 days on average to sell a home, a 16.2% drop (faster) then last year and a 17.2% decline from last month. Additional good news for sellers: The sale price versus list price (listing discount) finished just under 98%, a 1.1% improvement over last September and a 0.8% gain in the favor of sellers from August. Overall, there is a 1.9-month supply of homes on the market, a 47.2% decline from last year, and a 5.6% increase from August.