Our fourth quarter 2021 Coachella Valley real estate market recap dives into the prominent trends taking shape across the desert over the final 3 months of the year. Additionally, we have examined the December numbers to identify any signs of where the market is heading in the short-term. As with all our market reports, the numbers and analysis below cover the desert region as a whole. If you are interested in learning more about market conditions in a specific city, community, or neighborhood, please contact your local Bennion Deville Homes real estate professional. We will unlock possibilities for you.
The Quarterly Snapshot
We had an interesting close to the year in 2021, with many of the extreme market conditions we covered throughout the year impacting the trend lines. Year-over-year, it is incredible to see how shrinking inventory has drastically altered the desert housing landscape. Despite a sizable drop in the number of sales, the total sales volume saw less of a decline due to surging home prices. The one-two combination of scarce inventory and strong demand continues to push home prices high while halving the sales pace (days on market) and completely erasing the average listing discount (sold price versus list price). The endings to 2020 and 2021, although similar in trend directions, were drastically different in the scale of those changes, setting up a noteworthy start to 2022.
Comparing the data quarter-over-quarter, we saw an uptick in the number of homes sold to go along with a generous increase to the average sale price. The sales pace and the listing discount remain about the same quarter-over-quarter due to the scarcity of homes available for sale. Continuing into 2022, we expect things to loosen a bit due to higher interest rates and the end of the holiday season, but that does not look like it will be in the first quarter of the year. The unknown variables are the possible impact of ongoing pandemic measures, and the desert’s standing as a highly desirable resort market and its appeal as arguably the last truly affordable location in Southern California for many homebuyers. We predict that home prices will continue to go up, but the pace of their ascension will slow at some point this year. For sellers, now is an exceptional time to consider listing your property while we are in the peak of our desert season and before the buyer pool shrinks.
In Q4 2021, 2,461 homes exchanged hands, a 24.1% decrease year-over-year but a 3% increase from the prior quarter. Those sales accounted for nearly $1.8 billion in sales volume, a 9.7% drop from the same period last year but a 12.5% increase quarter-over-quarter. The average sale price finished the quarter just shy of $730,000, a 19.2% increase from Q4 2020 and a 9.1% bump from Q3 2021. Similarly, the average price per square foot finished at $358.30, a 24.7% increase year-over-year and a 7% increase quarter-over-quarter. The sales pace, noted as average days on market, clocked in at 34 days, a 46.4% drop from the year prior (faster) and a 3% increase (slightly slower) from the previous quarter. The sale price versus list price, known as the listing discount, ended the quarter at 100%, or no discount – a 2.7% increase year-over-year and down slightly by 0.7% quarter-over-quarter.
The Monthly Snapshot
December’s stats add a twist to an already interesting market. Inventory was at its lowest point all year at the end of the month, yet the number of homes sold notched its highest figure since June of 2021. December is typically a slower time of the year due to the holidays, but after a lull in November 2020, December 2020 was the start of a sales activity surge that lasted well into 2021. So, what should we make of the most recent numbers – a mere coincidence or the foreshadowing of another epic run? We won’t know for some time, however, it’s worth pointing out there are factors indicating the market is poised to continue its hot streak. Inventory is down, demand remains strong, and we expect more urgency from home sellers as they work to get ahead of rising interest rates during our peak sales season. What we will be focusing on for the next several months is to see if inventory levels remain thin or if they creep up due to the variety of factors we have mentioned.
December 2021 had 906 home sales, a 22.7% drop from the year prior but a 16.2% increase over November 2021. Those sales accounted for a sales volume exceeding $665 million, a 14% decline from December 2020 and a 14.9% increase over the prior month. The average sale price for a home valley-wide was $734,000, an 11.2% increase year-over-year but a slight downtick of 1.1% from November. Similarly, the average price per square foot ended at $357.00, a 16.7% boost over last December but a 2.2% dip from the previous month. The sales pace, logged as average days on market, clocked in at 35 days, a 44.4% plummet (faster) than the same time last year but a slight increase of 2.9% from November. The listing discount, calculated as the sale price versus list price, ended the month at 0%, or no discount at all, a 3.1% improvement over last December and the same as November 2021. There were 600 homes for sale across the desert at the end of the month, a 61% decline from December 2020 and a 16.9% drop from the previous month. There is a miniscule 0.7-month supply of homes for sale to feed demand, a 46.2% decrease from the prior year and a 22.2% decline from November 2021. A balanced market is considered at 6 months, once again demonstrating the degree to which conditions favor sellers.
As the December 2021 numbers and analysis demonstrate, we are still in a strong sellers’ market heading into 2022 and through our prime sales season here in the Coachella Valley. Anyone who is entertaining the idea of listing their home for sale should consider making their move now. If you would like to learn more about what your home is worth in today’s market, please connect with your local Bennion Deville Homes real estate professional.
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