Our third quarter 2021 Coachella Valley real estate market recap details the major trends taking shape over the past 3 months, which give a fair indication of future market activity. In addition to our quarterly review, we will also check in on the month-to-month numbers to see how microtrends may be impacting the larger picture in the market. As with all our market reports, the numbers below are inclusive of the desert resort cities. If you are interested in learning more about a specific city, community, or neighborhood, please connect with your local Bennion Deville Homes real estate professional. We will Unlock Possibilities for you.
The Quarterly Snapshot
Comparing the numbers year-over-year, we see how big a difference a year can make. Last summer was one of the best of all time in terms of market activity, marked by strong demand and limited inventory creating bidding wars that pushed prices higher. These themes have been a constant refrain for the last year, and the third quarter 2021 demonstrates the result of sustained tight inventory on the market. Year-over-year, the number of homes sold was down by a large margin, resulting in a lower total sales volume market-wide. However, the average sale price was up significantly, while the listing discount, which still existed last year, has all but disappeared in 2021. Additionally, the sales pace is significantly faster in 2021 compared year-over-year. Looking at the broader picture, these year-over-year changes are byproducts of a market operating with minimal inventory and high demand.
Comparing the data quarter-over-quarter, the number of homes sold was down compared to the previous quarter. Additionally, the average sale price dropped by a fair margin while inventory increased. These numbers indicate a market that is adjusting back to more normal levels. Buyers could be waiting out the market as we head into the primary season where more homes traditionally hit the market. As additional inventory becomes available, there should be some expected price adjustment, but this will be modest given existing strong demand. Interest rates going up could also impact the buyer pool as high interest rates eat into how much home buyers can afford, and may even prevent some potential buyers from entering the market.
There were 2,372 homes sold in Q3 2021, a 25.5% decrease year-over-year and a 29.4% decrease from Q2 2021. Those sales accounted for a sales volume of over $1.5 billion, a 13.2% drop from the same time last year and a 33.7% dip from the prior quarter. The average sales price finished the quarter at $670,000, a 16.9% increase over last year and a 6.1% drop from last quarter. The average price per square foot ended the quarter at $335.30, a 25.1% increase from Q3 2020 and a 0.9% increase from Q2 2021. The average days on market, known as sales pace, clocked in at a swift 34 days on average to sell a home, a 58.4% drop (faster) than the same quarter last year and a 15.8% decline from last quarter. The listing discount, noted as sale prices versus list price, finished the quarter at +0.7% (100.7% of list price), meaning buyers paid 0.7% over asking price on average, a 3.4% increase from last year and a 1% increase from last quarter.
The Monthly Snapshot
Looking at the stats for September, they reflect the trends we have seen over the past several months. The number of homes sold dipped both year-over-year, and month-over-month, while the average sale price of a home went up compared on both an annual and monthly basis. The biggest piece to note is that the number of homes for sale at the end of the month was up again, while the average days on market went up slightly, and the listing discount leveled off compared to last month. These trends indicate that the market is slowing slightly in advance of the fall months, a period where we typically see activity start to ramp up again. The trend is returning to a more seasonal market, which is to be expected after 12+ months of sustained growth in the market, including rising prices. The interesting trend to keep an eye on is how the growing inventory level impacts home values, and if buyer demand will come back as more choices hit the market. As mentioned in the quarterly synopsis, interest rates will play a factor on buyer demand as well.
September of this year saw 719 homes change owners, a 33% drop from last year and a 5% decline from August. These sales accounted for over $500 million in sales volume, a 22% decline from last September but a modest 0.3% increase over last month. The average sales price of a home ended the month at $697,000, a 16.4% increase year-over-year and a 5.6% uptick month-over-month. Likewise, the price per square foot ended the month at $344.00, a 23.7% increase over last year and a 3.6% jump over the prior month. The sales pace, noted as average days on the market, finished at 35 days, a 52.7% drop (faster) from last year and a 6.1% increase over last month. The listing discount, noted as sold price versus list price, finished at 100%, otherwise noted as no discount, a 2% increase over last September and a 1% drop from August of this year. The month ended with 851 homes for sale, a 57.3% drop from last year but a 4.8% improvement over last month. Overall, the market has 1.2 months of inventory to feed demand, a 36.8% dip from last year but a 9.1% increase over last month. A balanced market is considered at 6 months, so the market still heavily favors sellers.
As the market numbers and analysis above demonstrate, we are still in an extreme sellers’ market as we head into our prime season. Anyone who is thinking about 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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