A Slowing Real Estate Market Headlines The July Numbers

For the first time in years, the desert real estate market appears to be experiencing some seasonality in its activity. Long held as the “quieter” time of the year, the July summer heat ushered in a chill to the general valley market this year. As you read the analysis and data below, please keep in mind that it is for our desert resort cities at large, stretching from Palm Springs to Indio. If you are interested in learning more about a specific city or neighborhood, please connect with your local Bennion Deville Homes real estate professional. We have the resources, knowledge, and commitment to deliver outstanding service and help you accomplish your real estate goals.

The July market saw measured drops across nearly all major metrics as activity slowed. Active inventory at the end of the month was down by almost 100 properties on a monthly basis, and slightly down year-over-year. The scarcity of homes for sale is compounded by another decline in the number of homes hitting the market, continuing a downward trend for inventory levels that goes back months. This shortage of supply to meet demand is impacting other key datapoints, including the listing discount, which continues to close the gap to 100% (no discount) of the sale price to list price ratio, as well as the average days on market, which has a quickening pace compared to earlier in the year. The number of homes going under contract also slowed, a signal for a lower number of future home sales.

As we have suggested for some time, the market is experiencing a crunch. Homeowners who are in their current home with a locked-in low interest rate are hard-pressed to make their move. This is further complicated by the combo of stable, elevated prices with higher interest rates. Until there’s some momentum the other way with interest rates, and the greater uncertainty around the broader economic picture comes into view, we expect this stalemate to continue. The good news is that buyers still have options to consider, and sellers can capitalize on somewhat favorable market conditions to get a good deal and realize any equity. There are still plenty of deals to be made with the guidance of the right real estate professional. We are here to assist you when you are ready to consider your options.

There were 521 homes sold in the month of July, a 4.9% decrease year-over-year, and a 24.1% plummet month-over-month. The market welcomed 652 new units of inventory, a 27.7% drop from the same time last year and a 14.7% decline from the prior month. Additionally, 538 homes went into pending status, an indicator of future sales, representing a 4.9% dip from last July and a 15.4% drop from June. The median sale price of a home finished the month at $560,000, a 3.9% yearly decline and a 6.2% monthly decline. Similarly, the price per square foot ended at $375, a 3.1% drop from last year and a 9.4% decrease from last month. The sale pace, noted as the average number of days on market to sell a home, clocked in at 56 days, a 64.7% increase (slower) compared to last July, and the same pace as June. The listing discount, which is calculated by dividing the sale price by the list price, ended at 98%, or representing 2% off the list price, a 1% dip from the same time last year but a 2.1% increase over June of this year. Overall, there are 2.8 months of inventory to feed market demand, a 3.7% increase year-over-year and a 21.7% increase over last month. A 6-month supply of homes is considered balanced, indicating that home sellers still have a somewhat favorable point in their favor at the bargaining table.