Indian Ridge CC 2011 3rd Quarter Report
* To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.
Dear Indian Ridge Resident:
As we begin the reseeding process in preparation for the start of season, the real estate market continues to be slow to rebound primarily due to the economy and job market. Until both change, the recovery will remain sluggish.
The real estate market peaked in June of 2006. During the five years since prices have fallen back to 2002 levels nationally and to the 1990’s in some battered regions. In 2006 83% of the Americans believed home ownership was a safe investment. Today that number is 66%. This number will go back up over time as the real estate market begins to rebound.
According to Nin-Hai Tseng of Fortune.com, the recovery from a normal recession would show a quicker rebound and subsequent rise in the market. While the recession officially ended over two years ago the economy barely grew the first half of 2011. Since 1949, construction has been a driver in our economic recoveries. To date this industry has not shown a rebound and there are non-financial companies sitting on cash. Greenspan has asked Washington to stand aside and let the economy heal on its own.
The Dodd-Frank financial overhaul law that went into effect in 2010 began regulating the appraisal process where banks could no longer pick the appraiser and regulated appraisal fees resulted in appraisers having to work faster and cheaper. In some cases less experienced appraisers unfamiliar with a community, willing to work cheap are hired for more assignments and thus the accuracy of the appraisals are affected. Four states, Illinois, Nevada, Missouri and Maryland have considered legislation that would bar appraisers from using distressed sales when drawing estimates. There was a time when this was the norm, since the down turn, the banks have asked that distressed sales be included.
Many in the real estate industry believe appraisals are undermining the housing recovery. During the burst of sales, the appraisals were over-inflated. Now with distressed sales and less experienced appraisers heavily influenced by the distressed sales, appraisers don’t always appreciate factors that make a home worth more, sometime comparing a property outside a community that has no basis for comparison leading to a lower appraisal making sales and refinances more difficult. It is estimated that 16% of the cancellation of sales this year were due to low appraisals, up from 9% in June of 2010.
According to the National Association of Realtors, the regulations and legislation changes under consideration will not resolve the housing market issues in the near future. The tightened access to credit and requiring a higher down payment does not reduce the risk of default. A higher down payment strips families of savings and reduces the number of borrowers who can purchase a home.
Investors purchasing homes in August accounted for 22% of sales, up from 18% in July. First homebuyers represented 32% of the homes purchased in August. These numbers are relatively unchanged from a year ago. Cash buyers represented 29% of the sales in August and were primarily the investor buyers. Distressed sales accounted for 31% of the home sales in August, relatively unchanged from a year ago.
Distressed sales should begin to decline in 2013 and price should begin to rise according to Moody’s Analytics. The increased demand for second homes should decrease inventory over the next two years. It is expected the baby boomers will start to unload their larger home and move to smaller properties offering greater services and amenities. Another indication of stabilization is that renting in some areas is more costly than buying.
Existing home sales in the West jumped 18.3% which is 20.6% higher than a year ago. The median price, however, is down 13% from a year ago.
A review of the desert country club communities shows sale prices have rolled back to the 2004/2005 averages. Vintage, Bighorn, Hideaway and Toscana have shown an increase in sales for 2011 over the proceeding year. Desert Horizons, Ironwood, Indian Ridge, Rancho La Quinta, Mission Hills, The Lakes, Indian Wells, PGA West and The Springs have shown an increase in sales in 2011 as well. Only five of the communities show an increase in average sale price. Bighorn remains a very strong market with a number of the homes never reported in the Multiple Listing Service meaning their actual sales are higher.
Total sales for the Coachella Valley to-date for 2011 are slightly higher than in 2010. There were fewer million dollar sales this year so the increase was in the under $1 million dollar homes with the biggest increase in properties under $500,000. The buyers are searching for short sales and bank owned properties knowing they can purchase the home for less. Until distressed sales decline, those sales will continue to bring housing prices down.
Good news for the Coachella Valley and California Real Estate market. Single-family detached homes sold in August were up 8.5% from July and up 10.2% from a year ago. In addition, “August’s median price is the highest since December of 2010 signifying that prices may be stabilizing in some segments of the market.” These sales occurred before the reduction of loan limits that may have some impact on home sales in the coming months. It is expected that approximately 1.4 million homes will no longer be eligible for the lower rate conforming loans. ‘Jumbo’ loans normally require a bigger down payment and carry a higher interest rate. This change can alter about 8% of the total housing market and have significant impact on the northeast and California.
Indian Ridge has sold six more homes to date this year than in 2010. The price per square foot remains low primarily due to short sale and Bank owned properties (REO) sales. Of the ten homes pending, three are short sales and one is a bank sale. Of the 12 homes sold in the 3rd quarter, four were short sales and one was a bank sale. Currently there are 65 homes on the market. As we head closer to the near year, more homes are expected to come on the market. The buyers interested in Indian Ridge are also interested in joining the country club so with great prices, excellent member incentives and low interest rates we anticipate an active year for the country club as we remain competitive with other country clubs in the desert.
Windermere Real Estate in the Coachella Valley has joined Luxury Portfolio International, the leader in the luxury home market. Those who qualify are comprised of independent real estate firms through out the world who dominate their luxury markets, know their business and their markets better than anyone else. The Windermere Premier Program here in the desert has more than double the sales than their nearest competitor and were invited to join other luxury leaders in the world in providing excellent exposure for properties over $1 million. The average visitor to the Luxury Portfolio website earns over $1,290,000 a year, a mean value of their primary residence of $3,872,000 and the secondary home value of $4,051,000. The website represents more million dollar homes than any other network, translates the properties into nine different languages and converts money into 60+ currencies. This national and international exposure in addition to what we already provide, provides the luxury home market here in the desert with excellent exposure.
As an Executive Premier Director with Windermere, I am one of 12 agents who represent luxury properties and coordinates the Premier program consisting of 50 Premier Directors. In 2003, I became a Real Estate Broker. In 2004, selling over $35,000,000 it brought me to the top of the real estate industry in just a year. To date I have generated over $232 million in sales and sold over 254 homes with an average sales price of $914,272. Since my first sale in Indian Ridge in 2004 to the present, I have sold over $151 million in sales in Indian Ridge, more than any other real estate professional in Indian Ridge. Since 2009, I have sold more homes and generated greater dollar sales than any other agent in Indian Ridge. My passion for the business, dedication and integrity has brought me to #2 (to date) in the entire desert, out of over 4,000 agents.
Please click the link "View PDF Document" located under my photo to view a printable version of the entire report.
I look forward to seeing you all this coming season. Should you need my help please give me a call. I am here to help you and your friends.
Diane Williams, GRI
Associate Broker/Executive Premier Director
Windermere Real Estate