As we enter the new year the statistics on the explosive housing market in 2021 have all shown a real estate demand in the Coachella Valley is bursting at the seams with surging home prices and an ever-dwindling supply of homes reaching record lows. With the median home price pushing up to $615,000 the Coachella Valley has shown no direct signs of slowing down in the near future. While “rising waters raise all ships,” some areas and price points in the Desert have seen slightly more drastic increases in prices than other areas. However, there are larger national economic factors that could plateau or even show a slight decrease in record high home prices. Overall, the burgeoning Coachella Valley real estate market has seen some of the most interesting and stunning changes in 2021.
Demand has been the major story in real estate in 2021. While demand across the US has increased dramatically driven by low interest rates, the demand in the Coachella Valley has increased as more and more people are searching for homes in tertiary markets. At the same time, there has been a California-wide shortage of new home starts signalling the perfect storm for historic price increases. However, some cities in the Coachella Valley fared better than others. Bermuda Dunes saw a 44.4% increase in 12 months and a 223% increase since the low prices seen in the 2011-2012 season. While Rancho Mirage, for example, saw a monstrous increase of 32.3% year over year, this increase still only ranks them the fourth highest increase in the Desert. These never before seen price jumps are a direct result of the demand increase.
There is no question that the real estate industry is experiencing a historic boom. However, the one question that lingers in the minds of investors, the public, and real estate professionals is “how long can it last?”. While there are no direct signs of a slowdown, an interest rate increase could change the current real estate market landscape. In December of 2021, The Federal Reserve announced that it is “open” to speed up their bond buying program and are signaling that interest rate hikes are coming in 2022. As real estate buyers are some of the most sensitive direct client markets to interest rates, this could spell an end to the huge price increases and possibly even mark a slight decrease in home prices in the US. Despite this being on the horizon no one is predicting a major market crash, just a plateau or a price adjustment.
If you want more information regarding current market trends in your area, please reach out to a Jelmberg Team Real Estate Professional by visiting jelmbergteam.com/agents today!