Thankfully, we can put 2021 behind us and we’re happy to say the 2022 real estate market is off to a great start.
A MIXED BAG FOR 2021
Looking back at 2021, it was a Great year for homeowners. If you were selling a home, you enjoyed huge appreciation in your home’s value and Home Buyers lined up to buy, seemingly at any cost. But, if you were a Home Buyer, you may not think it was such a great year. Price increases, limited inventory, and bidding wars were a source of anxiety and frustration.
THE STATS
Throughout the 9 Desert Cities; The average selling price valley-wide in 2021 was $875,839 up a whopping 23% from 2020. In 2021 Homes were selling on average in about 42 days at 100.68% of their asking price. There were 7,722 single family home sales in 2021, up 6% from the previous year.
Chart Copyright Trendgraphix, Inc.
STUBBORN LACK OF INVENTORY
At the time of this writing, there were 468 single family homes for sale valley wide. The stubborn lack of inventory has been one of the driving factors contributing to the increase in home prices, and the biggest limiting factor to more sales. As we see more inventory enter the market, we should start to see the market normalize somewhat.
Chart Copyright Trendgraphix, Inc.
THE WILD CARD
The wild card so to speak, is Demand. The work from home trend, or work from home hybrid model seems to be here to stay, at least for the foreseeable future, fueling the Demand part of the equation in 2022. Adding to that, migration out of cities to Suburban living continues. Home Buyers want more space and better schools which has also created a boom in demand for single family homes nationwide including the Coachella Valley.
STATE OF AFFAIRS
We continue to see strong demand in the Desert Housing Market. The FED has all but announced the first-rate increase – fearing hyper-inflation, Fed Chair Powell has signaled there will likely be at least 2, and left the door open to as many as 4 rate hikes in 2022. That will have an impact on real estate nationwide; how much is yet to be known – but we do know as mortgage interest rates rise, a Home Buyer’s ‘buying power” shrinks. This will have a ripple effect on the real estate market. For Home Buyers who need a loan, it will impact who can qualify, and force others to shift the price of the home they can afford to buy, downward. This action will impact home prices overall, but for cash buyers, an increase in interest rates won’t have the same effect.
NARROWING OUR FOCUS
Identifying where the action is; not surprisingly the $400,000 – $500,000 price segment had the largest number of sales. But what may be a surprise, is the next hottest segment of the market was Luxury, ($1 million dollar plus) properties.
Chart Copyright Trendgraphix, Inc.
In 2021 there were 1,844 sales over $1,000,000. (up a whopping 64% from the previous year) 42 sales were over $5,000,000. (up 17% from 2020). Two sales last year were over $12,000,000. both located in The Madison. Compared to 2020, the highest sale price was $17,500,000. also in The Madison. Homes in the Luxury Market sold at an average of $1,854,357. ($513 / Sq Ft). The average time on market was 54 days and those homes sold at about 99% of their asking price.
HEADING INTO 2022
Shifting Demographics – Younger aged people are discovering the Desert Lifestyle; we’re also seeing an increase in new business openings. Growth in all segments from entrepreneurs starting a new business to well established names staking a claim in our economy by adding new locations in the valley. The Desert Economy is on a strong upward trend. Today, the limiting factor to more business expansion, is labor. Whether from COVID or other factors, it’s hard to know how long this will impact economic growth going in to 2022.
Currently, there are 634 homes in Escrow ready to close in early 2022, (173 of those are in the Luxury Segment). One notable home in escrow, located in BIGHORN Golf Club with an asking price of $49,500,000. (That one will skew the averages!)
Clearly the 2022 Coachella Valley real estate market has started with a roar.
If you’re thinking the Coachella Valley might be the right place to relocate to, give us a ring or send a quick email. We’re happy to share our knowledge of the local market so you can make a great buying decision for you and your family. (760) 218 – 5752.
