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Indian Ridge CC 2012 Annual Report

Dear Indian Ridge Resident:

*To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.

Happy New Year. As we welcome in 2013 we remain positive that trends in the real estate market in the desert will continue to improve.

Million dollar home sales in California reached their highest since the third quarter of 2007. In Southern California, November sales were up 34.6% for homes $300,000 to $800,000 and up 46.8% for homes over $800,000, the highest since July of 2008. Homes under $300,000 saw a drop of just under 8%. The reason for the drop in sales was due to low inventory of short sales and foreclosures. The reason for the increased sales in higher priced home was due to values increasing and properties near the $1 million being pushed over the million-dollar mark. Investors are viewing real estate as a good investment and have been actively buying this past year.

The median sized million-dollar home sold in California was 2,629 SF. with four bedrooms and three baths at $632 per square foot for a total median price of $1,661,528. Looking at homes in the desert there are 401 homes on the marketing asking $1 million or more with an average price of $1,800,412 for a 4,427 square foot home and at $368 per square foot. In 2006-2008, the average price per square foot for a million dollar home in the desert was $433. There are many great buys in the desert. As buyers continue to search for the 'right' property, they find it harder to find the perfect home at the price they want to pay. This means the buyer has to be willing to pay more for what they want or be willing to give up some of their criteria. Currently only 25% of the buyers believe home prices are going to increase this year while the other 75% believe they have more time before prices will increase. It is interesting to note that 75% of homeowners believe the value of their home is higher than what their agent recommends while 63% of the buyers believe the home is over-priced.

Cash buyers accounted for 31% of the million dollar home sales and 59.4% of the buyers paid cash when buying a home over $5 million. Leading lenders for million dollar sales were Wells Fargo, First Republic and Bank of America. Cash buyers in the early 2000's represented 10% of the market. Today they represent 30%. International buyers pay cash for a home 62% of the time. Jumbo loans (loans over $417,000 in the desert) accounted for 21% of purchase lending, up from 14.6% a year ago and is the highest since August of 2007 when they represented 40% of the market.

California forecasts a 1.3% increase in sales and a 5.7% increase in home values for 2013. Statewide median prices in November were up 24.8% compared to a year ago. This statewide gain was due to the sales of coastal properties with typically higher price tags. Inventory was down to a 3.1 month’s supply, a drop from 5.3 month’s supply a year ago. Riverside County showed a 19.8% increase in sale price but close to a 3% drop in number of sales due to low inventory.

As the real estate market continues to improve, the advantage of the low interest rates will be offset by the rising home prices. Single-family home affordability in California is at 49%. During the peak market in the mid 2000's affordability in the desert was about 15%. To qualify for a purchase of a statewide median priced single family home, the minimum annual income would have to be $65,810. Riverside County’s affordability is 63% where an income of $43,890 meets the requirement to purchase a median value home of $226,660.

Inflationary pressures are expected to build over the next two years. As a result interest rates will rise. Buyers wanting to purchase a home who have lower credit scores should work hard to raise their credit rating as quickly as possible in order to qualify for the lower interest rates and be able to purchase a home at the still lower prices.

November foreclosure sales accounted for 15.3% of southern California's market, down from 31.6% a year ago. Foreclosure re-sales were at an all time high at 56.7% in February of 2009. Short sales accounted for 26.6% of the sales in November just up slightly from a year ago. During the fiscal cliff vote by Congress, the mortgage debt relief was extended another year giving tax relief for homeowners going through a short sale, modification or foreclosure.

The Home Sales Evaluation included with this letter shows the number of home sales has continued to increase each year from the lowest point in 2007. In 2012, total home sales were up 1.5% with a significant increase in re-sales of homes over $500,000 and $1 million.

Annual sales were fairly consistent in the country clubs in 2011. Clubs with more sales in 2012 than in 2011 showed a drop in price per square foot average. Desert Horizons, Indian Wells, Mountain View and Rancho La Quinta experienced increases in average sold prices and per square foot costs.

Indian Ridge saw the best 4th  quarter with nearly 32% of the year’s sales taking place in the last quarter. Homes sales in the HOA out-paced the PUD for the second half of the year with their price per square foot down slightly from 2011. In the PUD, total sales were down when compared to 2010 and 2011 but much higher than 2009 which was perhaps the worst year in sales for the desert.

One of our competing country clubs is Rancho La Quinta. Both clubs sold about the same number of homes overall. The difference in the price per square foot shows Rancho La Quinta having a slight edge. When the attached condos are removed from both clubs, Rancho La Quinta’s average price per square foot is $291 and an average of 3,276 square feet. In Indian Ridge, the average price per square foot is $256 with an average square foot of 3,020. When we compare single family homes just in the PUD of Indian Ridge to Rancho La Quinta’s single family homes, the price per square foot for Indian Ridge is $277.

What can be done to increase home values? I have been a firm believer of always marketing to a higher level. Remember the old story about a certain scotch? The scotch was low priced, bottled in an unattractive presentation and considered a cheap scotch? The manufacturer went to a professional who changed the name, improved the packaging and presentation and double the priced. Nothing in the product was changed. It became the well-known expensive scotch, Chivas Regal. The club has done an excellent job of packaging all that Indian Ridge has to offer, positioned our club to be in a far better financial position than many and the image of Indian Ridge has always been considered an ‘exclusive’ club. So the marketing of the community needs to be very high quality and compared to higher-end communities.

Recently at an HOA Architectural Committee Meeting we were addressing sign appearance and those not meeting the sign requirements. I recommended we present to the residents that all signs be removed and not allowed. This would remove all ‘for lease’ and ‘for sale’ signs within the community. It was approved by the Boards and is now out for resident comment and/or support. Exclusive country clubs do not allow signs and there is no negative impact on the number of homes sold. What does change is the level of presentation and the change would place Indian Ridge in the ‘finer clubs in the desert’ category. With the new technology giving buyers the opportunity to find homes for sale on Real Estate Professional’s websites and hundreds of sites such as Google, Zillow, Trulia and Realtor.com to name a few, often the buyers who started their search at least three months before contacting a Realtor, know what is available. Our mutual goal is to help increase the value of our homes and sell more golf memberships keeping down the cost of operating the club. Presentation is key to achieving this goal.

Many of my friends and clients ask me how the new on-site office is affecting my business. I say “Business As Usual.” To be considered a competing agent against our on-site office is not only ridiculous but down right unneighborly. Indian Ridge is my club too, living within the gates since 1999.

Agents OUTSIDE of the new on-site office have listed 78% of the homes SOLD within our club and have represented 80% of all homes SOLD. Our on-site office represents only 13.7%. The remaining homes sold were through outside agents. There is a small group of us who are considered by most as the Indian Ridge Specialists and we represent 86% of the homes listed and sold in our club. Contrary to what a few may claim, an on-site office does little in attracting buyers into our community who are unfamiliar with our amenities and lifestyle. It is extremely important for a Real Estate agent to have knowledge of all area clubs and provide important and current information, thus building credibility and comfort with a prospective buyer looking at Indian Ridge.

My business continues to grow both inside Indian Ridge, as well as outside. As one of the TOP real estate professionals in the desert, in my company (Windermere), as well as in Indian Ridge, I am also the top-ranking outside agent in Toscana Country Club. My listing and sales volume for 2012 ranks within the TOP 3 agents of Windermere, the largest real estate company in the Coachella Valley with annual sales at an unprecedented $1,500,000,000.00 (one and one half billion). Knowledge, integrity and proven experience combine in making
Sellers comfortable to list their homes with me.

I have been associated with Windermere for over nine years, and with Windermere we continue to outsell the closest competitor by more than TWO-to-ONE in home sales throughout the desert. My clients not only desire stellar representation, they demand it. At Windermere, with our continually evolving broker/agent support, clients have the luxury of both. Consistency, in-house legal advisors, licensed non-competing Managing Brokers available to agents and clients 24/7, and my clients’ well-being as my PRIORITY are a few of the reasons why I should work for you.

I hope you find my quarterly report informative and beneficial. I look forward to a great 2013 and continuing the privilege of doing what I do best – representing my Buyers and Sellers.

Please feel free to call me anytime with questions you might have.

Sincerely,

Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
Full-Time Resident and Equity Golf Member

Resources:
CNBC, Robert Frank, 12/10/12
DQ News, 10/17/12 & 12//12/12
CDAR, 12/10/12
CDAR MLS for sales data
CAR: 11/2012; 12/12/12; 12/13/11, Real Estate 411, 2013 Market Forecast, 1/2/13
R/S Media 12//28/12
Wall Street Journal, 12/17/12
LA Times, Don Lee, 12/15/12; 12/17/12
San Francisco Chronicle, 11/10/12; 11/19/12
NAR, 11/10/12; 11/19/12
John Seymour, What’s Hot What’s Not, December, 2012