As the weather warms and pandemic restrictions ease across much of the country, the greater Palm Springs area housing market shows little sign of cooling. Robust buyer demand, fueled by low mortgage rates, continues to outpace supply, which remains near historic lows. Nationwide, inventory remains much lower than it was at this time last year, and sales prices are surging as a result.
The Median Sales Price was up 31.8 percent to $580,000 for Detached homes and 24.0 percent to $359,000 for Attached homes. Seven cities have gains for detached homes over 25%. Prices for detached homes in every city except Rancho Mirage and Coachella now exceed the historic highs made during the housing boom of 2004 to 2006.
Despite the growing number of new listings, inventory continues to remain low because high sales are rapidly absorbing these listings. On June 1st there were 682 units for sale compared to 2,793 units June 1st of last year.
When we measure sales in the different price brackets, we continue to find the largest sales increases in the middle to higher price brackets. Sales of homes under $300,000 continue to remain low there are fewer homes in these brackets due to the large price increases. Sales of million-dollar plus homes continue to amaze with sales averaging 200 units a month compared to just 54 units a year ago. With so many more luxury home buyers in the market than homes available for sale, home buyers are frequently entering into bidding wars for the houses they want to purchase (If you’re considering selling your luxury house, the best time to do so is now).
With such limited supply of existing homes to purchase, all eyes are on home builders to provide a much-needed boost of inventory to the market to help meet buyer demand. However, increasing material and labor costs, along with supply chain challenges, have contributed to significantly higher construction costs, with builders passing these costs on to homebuyers. And while the warmer temperatures, rising sales prices, and the reopening of the economy may draw more sellers to the market, historically low levels of homes for sale are likely to continue for some time.