The Market Watch Monthly Housing Report
Transcript of The Market Watch Monthly Housing Report
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
$320,000$340,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Median PriceCoachella Valley Median Home Price (detached homes)
Oct 2002 - Oct 2016
CV Median Price 4% growth curve
Summary
The year over year change in the Coachella Valley’s October median price was plus $20,000 or 6%. The median price continues to oscillate above
and below the 4% red growth line, something it’s done for three and a half year now. Twelve month changes in the October median prices of the
nine major cities shows a wide dispersion in results that go from 9.5% for the City of Coachella down to minus 6.2% for Rancho Mirage. As
predicted sales numbers continue to grow at a slow, steady pace. Average sales over the last three months are 683 units a month, which is 10%
above the 622 average last October. For the first time in over a year inventory is less than it was the same time a year ago. The November 1st
count was 4,350 units versus 4,545 units last November 1st. The combination of slowly rising sales and declining inventory is lowering the
“months of sales” ratio for the first time in a number of years. On November 1st the ratio was 6.1 months, which is lower than 6.4 months last
November 1st. In October the median DOM for the previous three months was 72 days compared to 89 days last October.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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Oct-16 Year Ago
12 Month
Change 2011 Low
Gain off
2011 Low 2006 High % from High
City of Coachella $240,000 $219,250 9.5% $121,950 96.8% $335,000 -28.4%
Desert Hot Springs $185,000 $169,450 9.2% $85,000 117.6% $295,000 -37.3%
Indio $299,000 $279,750 6.9% $158,500 88.6% $380,500 -21.4%
Palm Springs $552,500 $519,000 6.5% $335,000 64.9% $600,000 -7.9%
La Quinta $385,000 $369,900 4.1% $245,000 57.1% $682,020 -43.6%
Indian Wells $795,000 $779,000 2.1% $540,000 47.2% $1,205,000 -34.0%
Palm Desert $355,000 $363,000 -2.2% $287,000 23.7% $543,000 -34.6%
Cathedral City $282,500 $289,500 -2.4% $139,000 103.2% $395,000 -28.5%
Rancho Mirage $540,000 $575,750 -6.2% $423,000 27.7% $950,000 -43.2%
12 month change in city median prices (detached homes)
Changes in City Median Prices
Twelve month changes in the October median prices of the nine major cities shows a wide dispersion in results that go from
9.5% for the City of Coachella down to minus 6.2% for Rancho Mirage. Following a pattern seen for most of the year, the three
cities that were last to exit the foreclosure crisis – the City of Coachella, Desert Hot Springs and Indio – continue to outperform
price wise as they to play catch up. However, it should be remembered that late in the season has historically been a volatile
period for home prices, with a lot of backing and filling and we should expect more shifting in year over year results as we
approach year’s end.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
622
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705714
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Coachella Valley Home SalesOct 2011 to Oct 2016
3 month avg. 12 month avg.
Monthly Sales
As predicted, sales continue to grow at a slow, steady pace. The average over the last three months is 683 units a months,
which is 10% above the 622 average last October. The seasonal pattern is generally for three month sales to make lows around
October, stabilize, and then slowly begin to rise as we enter late winter and early spring. If this occurs again, we could expect
to see three month sales possibly average close 950 to 1,000 units by next spring. The non-seasonal, 12 month average of
sales (red line) continues to slowly rise and is now 1.2% above last year. This metric should begin to accelerate higher.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
16
56
15
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101 104
132143
51
312
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9585
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Units
Home Sales by City 3 month avg sales
October 2016 Year Ago
Home Sales per month by City
When we measure three month sales at the city level we see eight of eleven cities or areas with higher sales compared to
last year. Three cities are either lower or the same. Percentage wise Cathedral City shows the largest increase in sales from
41 units to 56 units, which is an increase of 37%. Bermuda Dunes was next with a 33% increase followed by La Quinta with
a 22% increase.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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15 11 5
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Home Sales by Price Range3 mos avg
Avg Sales Last Three Months Same Time Last Year
Home Sales by Price Range
When we calculate sales in the various price brackets we see some interesting patterns. Sales under $200k are lower simply
because fewer homes are selling in that range. Sales in the price bracket from $200k to $300k remain the highest but are
only 8% higher than a year ago. Sales of homes priced from $300k to $500k are 15% higher. The big increase in sales is the
43% increase for homes priced from $500k and $600k. Finally, there is a 23% increase in sales of homes priced over $1M.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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4,5454,350
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Valley Housing InventoryNov 1st 2011 to Nov 1st 2016
Coachella Valley Listed Inventory.
For the first time in a number of years, inventory is less than it was the same time a year earlier. The count on November 1st
was 4,350 units versus 4,545 units last November 1st. We think this change in trend is very encouraging. Looking at last year
we can see the rapid monthly increases in inventory that started in November and continued to February 1st. At its peak
inventory reached 6,000 units. If next month increase is moderate we could see inventory peaking maybe around 5,300 units
this winter, which would be very acceptable.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
6.46.1
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"Months of Sales" and "Days on the Market"
Months of Sales DOM
“Months of Sales” and “Days on the Market”
The combination of slowly rising sales and declining inventory is lowering the “months of sales” ratio for the first time in a
number of years. On November 1st the ratio was 6.1 months which compares to 6.4 months last November 1st. This metric,
which expresses inventory in terms of time instead of housing units, is confirmed by another metric called “Days on the Market”
that measures how fast homes are selling. In October the median DOM for the previous three months was 72 days compared to
89 days last October.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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3.34.3
5.7
7.28.3
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< $200K $200-300K $300-400K $400-500K $500-600K $600-700K $700-800K $800-900K $900-1M >$1M
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"Months of Sales" by Price Range uses avg. twelve month sales
Nov 1st 2016 Year ago
“Months of Sales” by Price Range
When we calculate “months of sales” at various price ranges we generally see lower ratios than higher ratios when
compared to last year. Under $200k shows the largest ratio decline going from 4.2 months to 3.3 months. $300k to $400k
shows a lower ratio as does $600k to $800k. From there ratios somewhat seesaw back and forth. Overall the ratios rise with
higher priced homes as is expected.
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The Market Watch Monthly Housing Report October 2016
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2.9
4.3 4.5 4.8 5.0
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"Months of Sales" by Citycity inventory divided by average twelve month sales
Nov 1st 2016 Year Ago
“Months of Sales” by City
When we calculate “months of sales” for each city, except for Palm Springs which has a very positive ratio of 4.8 months,
we see the expected pattern of lower months of sales in lower priced communities and higher months of sales in the higher
priced communities. In general the city ratios are almost identical to what they were on November 1st of last year.
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The Market Watch Monthly Housing Report October 2016
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0.0%
2.5%3.9% 4.1%
5.3% 5.5% 5.6% 5.7% 6.5% 6.8% 7.4%
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Distressed Sales by Citypercent of total sales
October-2016 1 Year Ago 2 Years Ago
Distressed Sales by City
Distressed sales (REO and short sales) continue to average around 5% a month for the whole Valley. It has been at this
level now for over a year. This rate is not high enough to affect good pricing or appraisal values but it would be nice to
again see the ratio break through 5% and continue on down to 1% or 2%. Only one city has a distress selling ratio over
10% - Cathedral City.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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-2.4% -2.4%
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
Sale Price Discount from ListOctober 2016
Sale Price Discount from List
The latest “Sale Price Discount from List” is at -2.4% exactly equal to the discount one year ago. As the graph clearly shows the
discount has been slowly declining for eight months now. A -2.4% discount implies that the selling discount to a home listed for
$300,000 was approximately $7,200.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
$225,000$239,000
$130,000
$150,000
$170,000
$190,000
$210,000
$230,000
$250,000
$270,000
$290,000
Attached Units - median priceOctober 2016
Median Price
Attached Units - Median Price.
The median price of $239,000 for attached units in the Valley was higher than a year ago by $14,000 or 6.2% which parallels
the 6% gain in detached homes. If the past is repeated - and it often is in the very seasonal desert market - we should expect
rising prices from here until spring time.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
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198220
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130
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Units
Attached SalesOctober 2016
Average 3 month sales
Attached Units - Sales
The three month average of attached sales was 220 units in October, which is 22 units more than last October. This is an increase
of 11% which is almost exactly equal to the increase in total home sales (attached and detached) of 10% we wrote about in the
third page of the report. History now indicates that sales should probably remain at a slightly reduced level for the next four
months.
PSRAR – 760-320-6885 Source data - MLS.COM
The Market Watch Monthly Housing Report October 2016
Prepared for the Members of PSRAR as a Member benefit
Explanation and Description of Market Watch’s Graphs and Calculations
Prices: Except for our attached price index, all city and regional median prices are for single family detached homes only. All prices are the median
value for 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 of detached homes. This longer time
period 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 numbers are the sum of both attached and detached home sales. We present two sales numbers – three month average of sales and
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 1st the
next month. It is the sum of inventory of both attached and detached homes. 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 1st. 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 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 949-493-1665