The Market Watch Monthly Housing Report

Transcription

1 The Market Watch Monthly Housing Report December 2015 Prepared for the Members of PSRAR as a Member benefit Median Price $450,000 Coachella Valley Median Home Price December 2015 $400,000 $350,000 $345,000 $339,930 $300,000 $250,000 $200,000 $150,000 CV Median Price 4% Growth Curve Summary We have decided to alternate every month showing price returns for the Valley and for each city in median price per sq. ft. and then the next month, the median price. This month all prices will be the median price). The 2015 change in the Valle y s median home price was -1.5%. However, when we analyze price changes in each city we see more positive results with most of the cities having low single digit positive gains. The only city with a negative return was Palm Desert with minus 5%. The three cities that ended 2015 with the largest percentage price gains off the price lows of 2011 were Cathedral City, Desert Hot Springs and the city of Coachella. Palm Spring, still remains the city closest to its all-time 2006 high, which was $600,000. Both sales metrics three month and twelve month continue to show a no growth or stagnant sales situation. The combination of higher inventory and stagnant sales has pushed the months of sales ratio for the Valley up to 7.3 months. This is a high enough ratio to define the overall Coachella Valley as a buyers market. A year ago the ratio was 6.6 months.

2 12 month change in the median price by City Dec-15 Year Ago 12 Month Change 2011 Low Gain off Low 2006 High % from High Indian Wells $790,000 $690, % $540, % $1,205, % City of Coachella $227,500 $199, % $121, % $335, % Cathedral City $275,000 $250, % $139, % $395, % La Quinta $434,500 $399, % $245, % $682, % Palm Springs $522,500 $497, % $335, % $600, % Desert Hot Springs $160,000 $152, % $85, % $295, % Indio $284,999 $278, % $158, % $380, % Rancho Mirage $649,000 $635, % $423, % $950, % Palm Desert $355,000 $373, % $287, % $543, % Changes in City Median Prices The year 2015 ended with a slight uptick in December median home prices, producing overall generally positive yearly price gains. They ranged from a high of 14% for both Indian Wells and Cathedral City down to a negative 5% for Palm Desert. Eight cites had positive year over year gains while just one was down. Most gains were mid-single digit. The three cities that ended 2015 with the largest percentage price gains from their 2011 lows were Cathedral City, Desert Hot Springs and the city of Coachella. Palm Springs, with a December median price of $522,500, still remains the city closest to its all time 2006 high, which was $600,000.

3 1,100 Coachella Valley Home Sales Dec 2010 to Dec , Units month avg. 12 month avg Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Monthly Sales Both sales metrics three month and twelve month continue to show a no growth or stagnant sales situation. December three month sales were down a marginal 4% with 608 units per month compared to 632 units a year ago. Average sales over the last twelve months were 698 units compared to an average of 692 a year ago. A visual inspection of the chart shows the situation. After slowly rising during and reaching a high above 800 units, twelve month sales slowly began to fall with rising prices. It reached a low of just under 700 units a month by the summer of 2014 and for a year and a half now has consistently been at that level.

4 160 Home Sales by City 3 month avg sales Dec 2015 Year Ago Units BERMUDA DUNES CATHEDRALCOACHELLA CITY DESERT HOT SPRINGS INDIAN WELLS INDIO LA QUINTA PALM DESERT PALM SPRINGS RANCHO MIRAGE 4 6 THOUSAND PALMS Home Sales per Month by City Average sales by over the last three months are generally slightly lower when compared to the same time a year ago except for a few cities. Cathedral City, La Quinta, Palm Springs, Palm Desert and Rancho Mirage all show slightly lower sales while Indian Wells and La Quinta show higher sales La Quinta by 17% and Indian Wells by 33%. This is the first time we can recall when Palm Springs, with sales down 11% from a year ago, has lower sales when compared to a previous year.

5 250 Home Sales by Price Range Units < $200K $ K $ K $ K $ K $ K $ K $ K $900-1M >$1M Avg Sales Last Three Months Same Time Last Year Home Sales by Price Range When we look at home sales by price range we see the largest decline is in homes priced under $200k. Sales in that price bracket are down 16%. This accounts for most of the 4% decline throughout the region. In fact, except for $400k to $500k price bracket, almost all the other brackets show comparable or even higher sales than a year ago. This shows that most of the Valley s no growth sales is due to the price rise and not a lack of interest since fewer homes are now available in in lowest ranges

6 7,000 Valley Housing Inventory Jan 1st 2011 to Jan 1st 2015 U n i t s 6,000 5,000 4,000 3,000 2,000 3,871 4,592 1,000 Coachella Valley Listed Inventory. Inventory on January 1 st was 4,592, which is 721 units higher than last year. However, its down slightly from December 1st s number of 4,677. This decline in inventory often happens during December. To see this we ve highlight previous January 1 st inventory numbers in red. For some reason each January number is slightly smaller than the previous month. It also appears that peak inventory usually occurs sometime in February and then works lower through spring. If this pattern persists inventory will probably peak in a month or two around 5,000 units.

7 Months "Months of Sales" and "Days on the Market" Days Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Months of Sales DOM Months of Sales and Days on the Market The combination of higher inventory and stagnant sales has pushed the months of sales ratio for the Valley up to 7.3 months. This is a high enough ratio to define the overall Coachella Valley a buyers market. A year ago the ratio was 6.6 months. If inventory rises in February to 5,000 units as we mentioned and expect, the ratio might continue to rise to 7.9 months before the normal pick up in sales begins to consistently lower it again as we move through spring and into summer. We consider it very positive that Days on the Market at 77 is the same as it was a year ago.

8 Months of Sales by Price Range uses avg. twelve month sales Jan 1st 2016 Year ago Months < $200K $ K $ K $ K $ K $ K $ K $ K $900-1M >$1M Months of Sales by Price Range When we calculate months of sales by price range we see that the general regional increase is occurring in the $300k to $400k price bracket as well as all price brackets above $500k. In the other price brackets, months of sales ratios remain comparable to a year ago. The higher price brackets (those above $500k) are the ones the second home buyer is most active in. Ratios of twenty months for homes priced over $900k is very high and becoming a little worrisome. It will be important to follow this up with a study to see if the second home market is changing a little in the cities this market is most active in.

9 M o n t h s Months of Sales by City city inventory divided by average twelve month sales 4.7 Jan 1st Year Ago Months of Sales by City The same is true when we calculate months of sales for each city. In general ratios are in acceptable ranges and comparable to a year ago in those cities with active buying interest or lower prices. However, in higher priced cities like Rancho Mirage, Indian Wells and parts of La Quinta, we see very high ratios, numbers of months that approach one year and more. This is all again an indication that these markets have transitioned and become strong buyers markets.

10 40% Distressed Sales by City percent of total sales Percent of Total Sales 30% 20% 10% 2.8% Dec Year Ago 2 Years Ago 9.6% 10.0% 10.1% 10.3% 6.5% 6.8% 7.2% 4.9% 5.4% 5.4% 15.2% 0% Distressed Sales by City Distressed sales (REO and short sales) are currently only 5.4% of sales which is very low. Desert Hot Springs is the only city with a ratio measurably above 10%. The obvious and rapid decline in distressed sales, shown so clearly in the chart above, is one reason that that city has had a very strong price performance over the last two years. No city has a ratio high enough where the level of distressed would interfere with fair appraisals or comps.

11 -1.0% Sale Price Discount from List Dec % -2.0% -2.5% -3.0% -3.5% -4.0% -2.6% -2.3% Sale Price Discount from List The Sale Price Discount from List is the median value for the last three months of the percent difference between the sale price and the asking list price on all transactions. The value in December rose from about 2% to 2.3% which we feel is not significant at this time. A percent of -2.3% implies that the selling discount to a home listed for $300,000 home was approximately $6,900.

12 Attached Units - Median Price December 2015 $290,000 $270,000 $250,000 $230,000 $210,000 $190,000 $170,000 $150,000 $130,000 $225,000 $232,000 Median Price Attached Units - Median Price. The median price of attached units in the Valley rose slightly in December to $232,000. This is $7,000 or 3% higher than last December. The seasonal pattern is for the median price to continue to increase up until May or June, then taper off again as we enter the hotter, slow season.

13 380 Attached Sales December 2015 Units month sales Attached Units - Sales The three month average of attached sales was 191 units in December, which is 16 units less than one year ago. However, three month sales often hit their lows in December and rise to a peak sometime around June. We expect this same pattern to occur this year too.

14 Explanation and Description of Market Watch s Graphs and Calculations Prices: All prices for the region and for cities are the median value of all transaction over the last three months (except for Indian Wells which is six months due to the small number of monthly sales). For example, the median price for the month of May will be the median value of all sales in March, April and May. This longer time period tremendously reduces the amount of wide and meaningless variation that one gets taking only the last month s transactions and provides more reliable information. While we do show the median selling price in our city reports, we try to emphasize the median price per sq. ft. in both these and our regional reports. For technical reasons this metric is more reliable than median price and presents us and the reader with fewer statistical anomalies and variations. Sales: Sales are reported either as three month average sales or twelve month averages. The three month average measures and shows the seasonal variations of the region. These three month averages should only be compared against the same three months of previous years. For example, one should never compare three month sales in spring to that of the fall. The twelve month average takes out all seasonality and is very useful when trying to assess the long term growth or contraction of sales in the region and at the city level. Inventory and Months of Sales: When we provide a monthly report for say the month of May, all sales and pricing are done using transactions throughout that month and the previous two months. However, when we measure inventory at the end of May, it s the inventory as of June 1 st the next month. Remember sales and prices are accumulative while inventory is a momentary snapshot of inventory on a specific date. To avoid confusion, the inventory reported in the May report is for June 1 st. and our graphs and charts for inventory and months of sales will give this date and not the date of the month of the report. When calculating months of sales we almost always use average sales over the last twelve months and not three months. If we do use three months we will indicate that we are dividing inventory by three month sales and not the normal twelve month average. Days on the Market and Sale Price Discount from List Price: These calculations are also the median value of the metrics reported from the MLS listing and are calculated over the last three months of transactions like price and sales. This is done to help reduce random variation and movements. Call Out Numbers: The two numbers inserted in the charts are the most recent value(s) and the value(s) one year ago. Each number is generally connected to the point on the chart it refers to by a small thin line. Scatter Diagram Value Curve: In the individual city reports we provide a Scatter Diagram Value Curve which plots the price per sq. ft. of every sale for the last three months versus the square feet of that home. In the graph each small blue circle represents a sale. Then a best fit linear line is calculated through those points using the least square method to arrive at the value curve. The value curve represents the price per sq. ft. that the market is generally giving different size homes. We provide the actual linear equation for people who might want to use it to calculate prices for different size homes. To Contact Market Watch call Vic Cooper at