Our fourth quarter 2020 Coachella Valley real estate market recap closes out a wild year for the desert housing market. During what is traditionally a quieter period in our valley, the final 3 months of 2020 put an exclamation point on the year’s incredible real estate market rebound. Since the market is in an unprecedented state, we are going to look at how things fared on a quarterly basis for broader trends as well as examine the month-by-month changes from November to December to explore more micro-level shifts. As with our other reports, these numbers reflect all of the major cities across the desert. If you are interested in learning more about what’s happening in a specific city, community, or neighborhood, please connect with your local Bennion Deville Homes real estate professional. We look forward to unlocking possibilities for you.
The desert real estate market wrapped up the year in grand fashion, with improvements in every major metric that we track compared at both a quarter-over-quarter and year-over-year glance. Stoked by historically low inventory levels and surging demand sparked by mass exodus from larger cities and major metro areas, the Coachella Valley market is riding a housing wave into 2021 unlike any we have ever seen. The number of sales continued to increase during the holiday season, bucking traditional patterns that show the fourth quarter as a quieter time before activity picks back up at the stroke of midnight on January 1 each year. In addition to increases in sales activity, homes prices are soaring, with clamped inventory levels creating high competition for homes and pushing prices upward. This price bump is poised to continue for the foreseeable future as inventory remains low and the sales pace picks up, especially now that we are through the holidays. Sellers are also getting closer to asking price than previous quarters, indicating that buyers are having to bid closer to what the seller is asking for a property in order to land it. As we head into what is traditionally the busiest time of the desert season each year, we will continue to monitor how inventory levels are affecting home prices. If you are looking to cash in on any equity you have built up in your desert property, now is the time to seriously consider selling.
In the last quarter of the year 3,200 homes successfully sold, a 42.9% leap over the same period last year and 0.5% increase from the prior quarter. Those sales accounted for over $1.965 billion in sales volume, a massive 79.1% increase year-over-year and a 7.7% bump quarter-over-quarter. The average price for a home in the Coachella Valley finished the quarter at $614,300, a 25.4% jump from last year and a 7.1% boost from third quarter 2020. Likewise, the average price per square foot finished at $282.80, a 14.9% increase over the same period last year and a 5.6% jump from last quarter. The sales pace, noted as average days on market, clocked in at just under 64 days to sell a property, a 27.5% drop (faster) than the same quarter last year and a 21.5% decline (faster) from last quarter. The listing discount, noted as sold price versus list price, finished at 97.9%, or a 2.1% discount, a 1% increase (closer to asking price) from the same period last year and a 0.5% bump from last quarter. The year ended with 1,539 homes for sale, a 50% drop from the same period last year and a 22.7% decline from Q3. Overall there is a scant 1.4 months of inventory available, a 65.9% plummet from last year’s figure and a 26.3% drop from last quarter. A balanced market is considered at 6 months of inventory, indicating how razor-thin the desert housing inventory is and favoring sellers as we head into 2021.
Because we are in unusual circumstances and the market seems to be shifting dramatically at a faster pace, we are going to look at the monthly changes in December to point out some of the patterns emerging. Same as the quarterly numbers, the monthly numbers indicate massive gains year-over-year, and even the month-to-month numbers show where the market is heading. Comparing December 2019 to December 2020 shows just how hot the market finished the year. The number of sales were up, nearly double the previous year’s figure, leading to massive sales volume gains. Even month-over-month, there was a significant shift in the number of homes changing hands. Additionally, the inventory level continued to crater in December, dropping by a significant margin month-over-month and finishing the year with half the homes available as the year prior. This diminishing inventory level is pushing home prices up, evidenced by big jumps at both the monthly and annual comparisons. The coming months will be crucial in terms of inventory levels. With homes selling faster than they can be replaced on the market, inventory levels will continue to see a deficit, unless there is a surge in properties put on the market by sellers trying to take advantage of favorable market conditions.
Examining the monthly shift, the Coachella Valley had 1,128 properties sold in December, a 42.2% bound year-over-year and an 18.5% jump from November. Those sales represent a sales volume just shy of $750 million, an 88% increase compared to December 2019 and a 31.8% increase from November. The average closed sale price of a home ended the month at $664,400, a 32.2% increase from the same month last year and an 11.2% increase from the month prior. Similarly, the price per square foot ended the month at $299.50, an 18.5% nudge up from the same month last year and a 7.2% increase from last month. The sales pace, noted as average days on the market, clocked in at 61.6 days on average to sell a home, a 38.6% drop (faster) from December 2019 and a 0.5% dip (faster) from last month. The listing price, noted as sale price versus list price, finished the month just shy of 97.7%, or a 2.3% discount from the asking price, a 0.4% increase (closer to ask) from last year and 0.4% decline (less than ask) compared to November. There were 1,524 homes for sale on the market at the end of the month, a 50.1% decline from the same month last year and a 15.8% drop compared to available inventory in November. The month wrapped up with a miniscule 1.4 months of inventory available, a 63.2% drop from last December and a 26.3% drop from November.