Dear Indian Ridge Resident, First quarter of 2021 is now in the books and what a wild ride it was. The coronavirus pandemic has turbo charged the demand for homes, leaving us with historically low inventory. Chances are if you or someone you know have bought or sold a home in the last 10 months, you have been part of the record-breaking real estate boom felt across the country. According to the National Association of Realtors (NAR), a 6-month supply of homes on the market is necessary for a “normal” market, while currently we are seeing only a 2-month supply, levels we have not seen since 1982, officially characterizing this as a “super seller’s market”. Locally, in the Coachella Valley, we are seeing less than a 1-month supply according to the California Desert Association of Realtors. The Wall Street Journal reported that US home prices are rising at the fastest pace seen in the last 15 years. Home prices are driven up by a surplus of buyers all competing for the same ultralimited supply of homes. While low interest rates have encouraged buyers to enter the market, several factors also have played a role in discouraging sellers from listing their homes, such as homeowners taking advantage of low interest rates to refinance their homes and fear of virus exposure from prospective buyers entering their homes. However, there are good reasons to believe a shift is coming. The accelerated vaccine distribution over the last few months will likely ease sellers’ apprehension and increase the housing supply, while at the same time an improving economy is maintaining upward pressure on mortgage rates. If rates continue to increase, homes may sit on the market longer allowing an accumulation of homes for sale. While experts predict supply and demand will start to eventually balance out, they continue to forecast a competitive seller’s market with a minimal slowdown. The latest Desert Housing Report released this week shows very strong numbers across the Coachella Valley with every city seeing an increase in median price for detached homes up 27.3% above last year. Attached homes follow behind with average price up 15.4% from last year. Inventory continues to decline across the valley, on April 1st there were only 742 homes on the market compared to 3,043 same time last year, which is a 76% decrease! Our own research concurs with this housing phenomenon. According to our “Sales Update by City” report, all 14 areas tracked had higher sales during 1st quarter 2021 as compared to 1st quarter 2020. Bermuda Dunes leads the way with an 81.8% increase, followed by La Quinta at 69.8% and Palm Desert South at 60.5%. Majority of all the 19 country clubs listed on the “Country Club Homes Sales” Report are positioned to sell more homes in 2021 than in 2020,
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