When the nation shut down for COVID-19 in March, the phones stopped ringing at Reserve Realty along with many other businesses in the Coachella Valley.
But when summer arrived, the real estate market, surprisingly, started heating up, Tom Cullinan, managing broker Reserve Realty in Palm Desert, said.
“We went about two months with the phones basically dead,” Cullinan said. “Everybody was staying home. In June, all of a sudden it started picking up.”
Buyers started arriving from the big cities in California and the Northwest, including Portland and Seattle.
“All of a sudden we had a lot of business in a time of year that is normally slow for us,” Cullinan said.
Inventory dropped and prices rose over the summer.
“People are done with the rat race,” Cullinan said. “We have a nice lifestyle out here. We’re hot here in the summer but look at all the other cities that are hot: Phoenix, Houston, Dallas.”
Driving out of the big-city coastal areas, you can feel the tension evaporating, Cullinan said.
When you reach the Coachella Valley, you are in a resort setting with relatively low density, very little traffic, great restaurants and great shopping, Cullinan said.
The Reserve has a private golf club, which recently completed a $10 million clubhouse renovation that includes outdoor dining terraces. Homes currently for sale in the development range from $1.4 million to $9 million.
“We’ve probably seen a 20% increase in price – which is a big number -- over the last six months,” particularly those priced below $2 million, he said.
Few in the industry would have predicted a jump that big when the pandemic initially hit.
The trend has shifted from all-cash purchases to mortgages as interest rates dropped after the pandemic, Cullinan said.
“Interest rates are so low, they figure they can borrow and keep their money in whatever investments they have. These are people who could afford to pay cash but they’re taking advantage of low interest rates.”
Buyers are attracted to the “dramatic” landscape of the valley, Cullinan said.
“You can be playing golf at 80 degrees and look up and you will snow on the mountains,” he said. “People love the green grass, palm trees, hiking and wellness.”
The resurgence of golf has also been a factor in the rise in real estate.
“People like to get outdoors and you have social contact but you’re not right up against somebody like you would be if you are bowling,” he said.
