Coachella Valley single-family home prices drop, with more houses on market

If you’re looking to buy a home in the Coachella Valley, things may be starting to turn in your favor. Nonetheless, typical spring price increases could be coming, meaning you may want to wait a few months to actually make a deal.

The latest report compiled by two local organizations for real estate professionals stated that rising inventory and relatively low numbers of sales are “beginning to slowly favor buyers.”

While inventory and home sale activity both remain well below normal, overall inventory — 2,309 units as of Feb. 1 — reached its highest level since 2020. That's still about 1,000 units short of what's been normal historically.

After months of declines, the number of home sales in January also modestly edged up closer to their normal pace. As a result, the median price of a detached home dropped to $660,000, down 1.8% from a year ago. The report notes that home prices typically rise in the Coachella Valley in January.

The median price of an attached home, meanwhile, did rise to $475,000, up 9.2% from January 2023. The report, which is compiled by Greater Palm Springs Realtors and the California Desert Association of Realtors, states that attached home sales are particularly impacted by seasonal variation and prices should be expected to increase for the next three to four months.

But for both types of homes, pricing trends vary throughout the valley. At the extreme ends of the spectrum were average detached home prices in Indian Wells and Bermuda Dunes, which were up 9% and down 11% respectively. Attached home prices were also up between 1.8% and 16.6% in Palm Springs, Rancho Mirage, Indian Wells and Indio, but down between 1.4% and 7.3% in other valley cities.

The report also contained some other good news for buyers: In January, the percentage of Coachella Valley homes selling over list price declined a little to 14%.

The average discount off list price for detached homes ranged from 1.4% in Coachella to 4.8% in Bermuda Dunes. Discounts for attached homes ranged from 1.1% in Cathedral City to 5.35% in Bermuda Dunes. The average amount of time a home is on the market, meanwhile, remained steady at 40 days.

While gains in home sales remain low relative to those in inventory, the report suggests sales could now be making their way back to normal levels, which they have not seen since mid-2022.

The report states that 510 homes were sold in January, an increase from 436 in January 2023.

Palm Springs-area home sales volume below normal, but rising

That January sale number also meant that home sales are now running 28.6% below their normal pace, a modest improvement in that figure after months of slowing sales.

“With lower inflation and mortgage rates we hope to see sales finally return to normal later this year,” the report states.

It notes that the 12-month moving average of valley home sales increased slightly from December to 618. The 12-month moving average has been relatively stable for several months after it experienced a near-steady decline from about 1,200 homes per month in July 2021 to around 600 in summer 2023.

The report states that the two organizations see the latest increase as a sign that the "worst is over" when it comes to the recently anemic home sales numbers. However, it also said they believe sales will fully return to their normal pace only when mortgage rates come down to 6% or lower.

As of Monday, interest rates being offered in the Palm Springs area were hovering around 7% for a 30-year fixed mortgage and 6% for a 15-year fixed mortgage, according to lending sites. Homes are also averaging about 40 days on the market, the same as last year. However, the report says recent declines in inflation offer hope that mortgage rates will soon decline.

Coachella Valley housing market: The basics

• Number of homes sold in January: 510 (up 17% from 436 in January 2023)
• Median sale price, detached home: $660,000 (down 1.8% from January 2023)
• Median sale price, attached home: $475,000 (up 9.2% from January 2023)

Paul Albani-Burgio covers growth, development and business in the Coachella Valley. Follow him on Twitter at @albaniburgiop and email him at paul.albani-burgio@desertsun.com .

This article originally appeared on Palm Springs Desert Sun: Coachella Valley single-family home prices drop, with more houses on market