If you’ve noticed unfamiliar neighbors walking around your community lately, you’re not alone. They’re among a stunning influx of new homeowners in the Coachella Valley pushing the real estate market beyond its capacity. Usually, when the economy tanks, as it has during the COVID-19 pandemic, the housing market sinks with it. However, with the ability to work remotely, many folks have been fleeing dense and depressed cities around the United States and landing in places like the Coachella Valley — open, spacious, and active.
Basic economic principles will tell you the increasing demand for homes pressures and shrinks the supply, driving up prices and triggering bidding wars. The frenzy has created an unprecedented environment in the desert communities not only for buyers and sellers, but also for the agents, brokers, and lenders scrambling to keep pace.
“Detached [single-family] home prices have been surging all year,” says Mike McDonald of the real estate research firm Market Watch LLC. “The median price [at the end of 2020] was $520,000, up 22 percent from the previous year. No one expected this, especially during a pandemic, but it happened.”
Indeed, unit sales across the Coachella Valley rose 13 percent to 1,277, and total sales in dollars jumped 31 percent to a record-setting $6.5 billion.
“The sales increase was mainly in the higher-priced luxury communities,” McDonald says, noting that spikes occurred in homes starting at $600,000. “Houses priced between $1 million and $2 million were up 62 percent. The largest gain was in La Quinta, followed by Palm Springs, Rancho Mirage, and Palm Desert. The increase was in single-family residences [18 percent], not attached homes [3 percent].”
And, if you believe McDonald, the surge has only just begun. Although the pace steadied early this year, he predicts would-be sellers who had “COVID listing reluctance” at the height of the pandemic will flood the market with new listings — especially for lower-priced homes — as soon as this summer. (Sales under $300,000 actually fell 19 percent in 2020.)