February 2025 Coachella Valley Housing Market Update: A Shift to a Buyer’s Market?

The Coachella Valley real estate market is experiencing a shift. With inventory levels rising and sales below historic norms, buyers are gaining more negotiating power. If you’re a seller, understanding these dynamics is crucial to pricing your home effectively and getting it sold. If you’re a buyer, the market is presenting more opportunities—but affordability remains a challenge due to interest rates.

Let’s break down the latest numbers from the February 2025 Desert Housing Report and what they mean for both buyers and sellers.

Supply is Rising—Demand is Lagging

🏡 Inventory has surged to 3,510 homes, up 1,144 units from last year.
📉 Sales remain 20.8% below normal levels, even though they’ve improved slightly compared to last year.
📊 The “months of sales” ratio now stands at 5.7 months, up from 3.8 months last year—a key indicator that the market is shifting toward a buyer’s market​.

In most Coachella Valley cities, months of sales ratios between 5.0 and 7.0 months suggest supply is outpacing demand. Rancho Mirage currently has the highest supply at 8.2 months, while Coachella and La Quinta are among the more balanced markets at 4.4 and 4.8 months, respectively​.

What This Means:

• Sellers must price competitively to attract offers, as buyers now have more choices.
• Buyers have more room to negotiate, particularly in high-inventory areas.

Prices Are Holding, But Not Everywhere

💰 The median price of a detached home rose to $700,000, up $15,000 from last year.
💰 Attached homes saw an even larger gain, reaching $505,000—up $16,000 from last year​.

However, pricing trends vary widely by location:

• Coachella saw the highest appreciation, with detached home prices up 11.5%.
• Rancho Mirage saw the biggest decline, with detached home prices down 9.0%.
• Indian Wells led price growth in attached homes (+16.4%), while Cathedral City saw a decline (-5.6%).​

What This Means:

• Sellers in areas with price declines may need to adjust expectations and be prepared to negotiate.
• Buyers should target cities with price softening for better deals.

Homes Are Taking Longer to Sell

⏳ The median days on market (DIM) is now 46 days, up slightly from 43 days last year.
⏳ Rancho Mirage has the shortest selling time at 41 days, while Desert Hot Springs has the longest at 59 days.​

While selling times are still relatively short, a rising months-of-sales ratio suggests homes could start taking longer to sell unless demand picks up.

What This Means:

• Sellers must price aggressively and ensure their home is market ready.
• Buyers have more time to shop and compare homes—but shouldn’t assume all sellers are desperate.

Interest Rates & Affordability: The Biggest Hurdle for Buyers

Even with more homes available, affordability remains a challenge.

🏦 The Federal Reserve has begun lowering short-term interest rates, but mortgage rates remain higher than many buyers hoped for​.
💰 Higher rates continue to limit buying power, making it harder for buyers to afford higher-priced homes.

What This Means:

• Buyers should factor in interest rates when determining their budget.
• Sellers need to be realistic—rising inventory and affordability concerns mean buyers aren’t likely to overpay.

Final Thoughts: A Shifting Market Requires Smart Strategies

🔹 Sellers: With rising supply and buyers regaining control, pricing competitively is key to selling quickly. Overpricing could leave you sitting on the market longer than expected.
🔹 Buyers: You have more options, but affordability is still a challenge. If you find a home that fits your budget, consider locking in rates before conditions change.

📩 Thinking about buying or selling? Let’s discuss a strategy that works in today’s market. Contact me today!