Indian Ridge CC 2008 2nd Quarter Report
Dear Indian Ridge Resident,
We are now into the 18th quarterly report since I started collecting information and mailing it to you. I have included the 18 quarters on a spreadsheet for your review. Hopefully you will continue to find this information of interest and value.
With the market information released by the various media groups, the buyers remain skeptical about the real estate market's true bottom. If we rely on the experts who have been in the industry for years and have seen the fluctuations in the market, they say we will celebrate in 2010.
According to John Seymour in "What's Hot What's Not" his belief is the weaker dollar has spurred more exportation. The $48 billion distributed in May for tax rebates followed by the $95 billion disbursed in June and July, the monies will be pumped back into the economy. The Feds will not make any changes in the fund rate which is at 2% .
Existing home sales in May adds credence to the belief that we have hit the bottom of the housing cycle. Sales were up in April and May with prices 15.3% less than a year ago. Currently we are at a 10.8 month supply on average. Once we reach 8 months homes will stabilize and real growth will return.
The California housing market show sales in May rose 18% in May compared to 2007 and were up 15.5% from April. Coachella Valley reported a 3.9& increase. Unsold inventory dropped to a 8.4 month supply compared to a 10.7 month supply in May of 2007. According to Seymour, he believes housing price stability is not more than 90 days away.
According to the Desert Sun, June 1, 2008, the positive sale trend started last fall and has seen the strongest year over year since September of 2005. April's sales were 25.1% over March sales. The median price is $301,000, the lowest since September of 2004. This lower price is based on the fact that much of the current market is homes under $500,000. The mix of sales shifted dramatically since August of 2007 with the share of sales under $500,000 climbing from 40 to 65 percent in May of 2008. This same market has seen large decreases in value as more homes in this price range are distressed sales. Hones over $500,000 declined in market share as jumbo loans were harder to get at great rates.
Coachella Valley median home prices were $384,728 in April of 2006. In April of 2008 the median price had adjusted to $304,023.
New home construction according to economic indicators will remain weak through the year and into 2009.
According to a Harvard study there are 4 social trends that will influence the housing market over the next 10 years:
People marrying and divorcing-fast growing household type
Echo boomers are aging and entering the market
Increased life expectancy of baby boomers
1.2 million projected annual immigration
According to the California Association of Realtors, they believe the market will start to recover in early 2009. In the meantime, the interest rates remain low, there are jumbo loans available and the prices for great properties are better than they have been in years making it a great buyers market. The affordability factor significantly up due to the drop in home prices and the low interest rates all contributing to a market that would appear to have reached its lowest levels.
The high end market remains a mystery as we move forward. Some markets remain stronger in sales than others so whether we will see further price reductions in the high end market is yet to be seen. Listed below are the stats for various communities in the desert:
Community 2nd Qtr Sales Days on Market % of Asking Price
Rancho La Quinta 22 161 93.5
Indian Ridge 16 161 94.4
Toscana 4 200 89.8
Bighorn 11 142 93.5
Traditions 4 296 86.0
Hideaway 6 324 92.0
Reserve 5 355 92.7
The Lakes 22 114 93.0
Palm Valley 28 140 92.4
The Springs 16 189 94.8
Stay tuned to further developments as we enter into the fall of 2008 where some expect a turn around. It is my belief that we will see increased sales as prices fall in line with what buyers are willing to pay and sellers are willing to accept. I don't foresee increases in value until sometime in 2010. For those owners willing to carry the costs and wait until the market returns, the current demand for rentals is very high with the rates increasing as well.
Have a wonderful summer.
Diane R. Williams
Associate Broker/Premier Director
Windermere Real Estate