Indian Ridge CC 2008 3rd Quarter Report
Dear Indian Ridge Resident:
In review of the current real estate market conditions and speaking with other top producing agents throughout the country, the ability to qualify and obtain a loan remains difficult. Buyers continue to hesitate in purchasing as they await another price reduction. With the financial dilemma we currently face, the length of time until the real estate and economic conditions improve is predicated on the decisions about how to deal with financial institutions in crisis. According to some, if there is a financial bailout or loan, the real estate market conditions could improve in 6 to 12 months, earlier than the forecasted 2 to 2.5 years.
The affordability factor for people to purchase entry level homes in the desert has improved from about 15 % two and a half years ago to just under 50%. This should lead to increased sales so the availability of money becomes the final requirement to increase real estate sales.
The sale of properties under $500,000 increased from just under 40% last year to 65%. In one of my reports last year, I mentioned high-end properties were still selling causing an erroneous statistic as they were holding up the median prices while the less expensive communities and new home developments were being hammered by declining sales and prices. The sales for these communities have increase in number as they now viewed by the buyers as ‘great value.’ The foreclosures represent about 2.3% of all real estate sales in Riverside County as of June, 2008. It is important to note that the Palm Desert, Indian Wells, Rancho Mirage, La Quinta area has less than 1% of the REO’s.
Riverside Country existing home sales were up 48.6% with foreclosures representing 43.6% of all July sales in southern California. On a more positive note, the number of existing home sales in California remains above 400,000 per month with July showing a 15.3% increase in sales over June and a 43.4% increase over June of 2007. The supply of unsold inventory has dropped from 10 months to 6.7.
The real estate market conditions provide an excellent opportunity to step up in size and value in homes. We are not seeing as much activity in this market and it will remain slow until such time that sellers and buyers agree on the actual sales price for the home the step-up buyer is selling.
Last season there were many homes in Indian Ridge priced far above the true marketable value. Historically these over-priced properties remain on the market until such time as the actual sales price reflects the other side of the value line where ultimately the homes sell for less than it would have if priced appropriately in the first place. This “chasing the market down” is detrimental to maintaining true value for two reasons: first it slows market sales as people search for better valued homes in other communities; secondly, the prices continue to decline showing such vast price reductions it would appear the values are really dropping far more than in reality. When these homes actually sell, usually for far less than true value, they leave those homeowners who are willing to sell for a true marketable price unable to get the best possible price for their homes.
The median price for Coachella Valley was down 8.7% to $274,000 in June. It dropped another 14% in July to $239,360. The last time it was this low was in January, 2004 when it was $268,000. California median prices dropped from $591,280 in June of 2007 to $368,250 in June of this year. If July for the rest of California followed the path of Coachella Valley, this number will have further declined as well.
The current economic conditions are broad reaching with International interests currently holding over one trillion of the American sub-prime and Alt- A mortgage loans. With the weaker dollar, the demand for US products remains strong. The US consumers spent the refunds recently received from the government which has kept the consumer market index higher that the economic reports expected. The forecast is that the economy will remain flat until the housing and construction markets begin to show a stronger recovery.
It is important to know that only 15% of American taxpayers pay 97% of all the taxes. With the election on the horizon, any tax changes will dramatically affect the developments of new businesses and the demand for employees. Job loss affects the housing market so it is important to keep businesses with monies sufficient to offer jobs.
In Indian Wells, Rancho Mirage, Palm Desert, La Quinta, Bermuda Dunes and Sun City, the shift in where the existing home sales are occurring supports that increase from 40% to 65% for those properties under $500,000. (Listed below.) Currently, 67.1% of all sales in June of this year were for properties under $500,000. The $500,000 to $1 Million dropped from 44.9% to 23.8% and the over $1 million properties dropped from 15.6% to 9.1%. Whether this decline will cause the higher priced homes to decline is yet to be seen.
Price Range Sales 6/1/7-9/23/7 Sales 6/1/8-9/23/8
Total 861 930
<$300,000 128 213
$300,000-$499,999 312 335
$500,000 to $749,999 196 160
$750,000 to $999,999 103 81
$1 Million to $1,999,999 93 59
Over $2 Million 29 27
So what does this mean for Indian Ridge Country Club? The community remains a “premier’ area in the eyes of the prospective buyers. With 70+% of the buyers choosing Indian Ridge because of family and friends, it is important to continue the high regard in our group of residents and our marketing efforts. Both are equally important in maintaining value in the eyes of those interested in moving to Indian Ridge and for those already residing in this community. This season if we add the number of unsold homes from last season to those homes that are coming on the market this season, it will represent 10% + of the homes in Indian Ridge. Not since 2001 when we had 124 homes on the market has this condition existed. It is extremely important to price properties appropriately to increase sales and decrease inventory. If the current conditions are such that residents are unwilling to accept the current market price for their home, keeping their home off the market would be in everyone’s best interests.
For the 3rd quarter, 5 homes sold with 2 currently in escrow. This is down from last year and the proceeding year. The Quarterly Activity for the past 19 quarters shows Indian Ridge continues to hold its own in sales according to the cost per square foot.
Once again, I hope you enjoy receiving this report and that you find the information valuable. Should there be information you would like included, please don’t hesitate to contact me.
We attempted to reach all residents in Indian Ridge recently to ask if they would prefer receiving this report via e-mail in a PDF format. With 1068 residents, this is a very large contact list to keep current and correct. If for some reason you received this e-mail in error and do not wish to continue receiving via e-mail or mail please let me know by sending an e-mail to firstname.lastname@example.org and we will remove you from the list. If you prefer regular mail, please confirm the mailing address where you wish to receive this information.
I extend a sincere thank you to all who were so happy to hear from us and look forward to seeing you this season. As always, if you need any information or would like me to address other issues in this report, please don’t hesitate to let me know.
Diane R. Williams