Indian Ridge CC 2014 1st Quarter 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.
The energy this Doctor created that I felt in the surgical room is the same as the feeling of the pent up desire for this real estate market and economy to take off. We thought we had started in the fourth quarter of 2013, only to find the first quarter of 2014 more sluggish than anticipated for the real estate market. Nationally the market was down 5.1% in January compared to December of 2013 and the first quarter of 2013. In the Coachella Valley, sales were moving at a nice pace in the fourth quarter of 2013. We anticipated a continued push upward in the market and to have many more sales than we had in the 4th quarter of 2013. That did not happen. Much like the economy, the real estate market moved in the very same way. We experienced fewer sales in January than in December and in the first quarter sales from a year ago. The primary reasons for this were lack of inventory, rising prices along with increased lending restrictions and guidelines that became effective the first of the year. This economy and real estate markets are wanting to surge and whether there are too many federal restrictions that are preventing the recovery from happening as quickly is yet to be seen.
Investors accounted for a large number of sales in 2012 as they bought up many of the distressed homes. Among the 20 investment firms who were buying the most real estate in California since January of 2012, their purchases were down 70% in 2013. The drop in the number of home sales is partly a result of these investment firms pulling out of southern California as they see fewer and fewer bargains. Their formula is to buy, improve and sell based on specific target numbers. The numbers are no longer penciling out for them so they are moving on to different markets. The investor buying made it harder for families to compete for the purchase a home at the lower prices, particularly when the investors were paying cash and the families needed financing. This heavy demand drove up prices making it harder to qualify for the loan needed to purchase the homes at the higher prices. Home delinquencies are at their lowest level since the first quarter of 2008.
The inventory of homes on the market increased to about a 6 month supply in February. It is projected this will drop to about a 4.5 month supply by June. In the past few weeks, the demand for million dollar priced homes has increased significantly and homes that sat on the market for nearly six months in some cases now have the potential for multiple offers.
According to the Coachella Valley Total Homes Sold Report, we have had a drop in sales from 2012 and 2013. Homes sold under $500,000 are down from 84.6% year ago to 77% this quarter due to the lack of inventory and increased values of homes from a year ago. Homes over $500,000 now represent 23% of all resales and homes over $ 1 million now represent 7.1% of the market, the highest we have seen since 2007.
Millionaires see real estate as the top alternative asset and one third of those surveyed say they plan to buy this year. This is great for the high end market which has been soft for a number of years.
The average price per square foot in California in 2005 was $301. It dipped to a low of $121 in 2011 and has since been on the rise in the past few years to $192 to date in 2014.
On the Country Club sales report comparing 1st Quarter sales for both 2013 and 2014 for the 21 Country Clubs I track, we see that fifteen of the clubs’ average sale price is up from a year ago. Ten clubs show a drop in the number of home sales from the same time a year ago. This could be the result of the continued lack of the inventory of the homes the buyers want along with prices being higher than the buyer wants to spend for the properties. There remains a larger inventory for the more expensive homes and the drop in average price could be a result of the kind of homes sold or the fact that the market remains somewhat soft for higher priced homes. The average price per square foot for homes sold in the Country Clubs I track is now over $200 with the exception of three golf course communities. What is surprising is that in the three communities whose average is below $200 per square foot, the number of sales from a year ago is down.
In Indian Ridge, sixteen homes sold in the first quarter of this year, down four from a year ago. As of the first of April, twelve homes were in escrow. This puts sales at about 35% of the total sales in 2013. We are on pace to sell the same or more homes this coming year. The average sales price for Indian Ridge is up 8.4% from a year ago with the HOA up 15.3% and PUD up 1.2%. These numbers will change dramatically as a number of the homes in escrow are well over $1 million. Move up buyers are competing with new buyers who want to bypass the usual first step of buying smaller and then moving to a larger home within a few years.
Indian Ridge remains one of the top three Country Clubs for price point within the twelve country clubs (excluding the high end golf communities) I follow along with Morningside and Rancho La Quinta. In speaking with a top producing agent who specializes in Rancho La Quinta, they have been selling their million dollar plus homes but having trouble selling the smaller homes. We on the other hand have been selling the under $1 million with a sluggish market over $1 million. In the past three weeks four homes over $1 million are in escrow with a demand to show the others increasing as well. Rancho La Quinta had 41 homes on the market with Indian Ridge at 85 at the end of the first quarter. Even with the increase in product availability, Rancho La Quinta sold 11 more homes in the first quarter than Indian Ridge with both having the same number of homes pending and in escrow.
Pat MacDonell in Membership reported a significant rise in membership sales since the first of November. Buyers and Sellers remain confused about the programs the club is offering and this is having some effect on home buying and selling in Indian Ridge as the rumor mill flows throughout the valley. The current program is seen by many residents and potential buyers as a ‘mandatory membership’ that requires in-depth conversations to make the program clearer to them.
For the past two and a half months, we have been e-mailing residents of Indian Ridge as well as 1600 Real Estate Professionals the open houses we are holding the upcoming weekend. The end result has been extremely positive to Indian Ridge as a whole. We are getting many more people coming to the open houses and more homes are seen by buyers and sellers. While open houses don’t always sell the home to the buyers who come by, these buyers see more of the homes and various floor plans and are better able to zero in on the homes that meet their needs which ultimately leads to the sale of homes here in Indian Ridge. Open houses raise the possibility of getting your home sold more quickly.
In the real estate industry, professional courtesy has been to present to buyers and sellers what we as a professional can bring to the table that will serve their best interests. Recently you received a mailing presenting sales volume percentages for each brokerage firm within a small defined timeline. Having done quarterly reports and stats for years, numbers don’t lie until they are manipulated. Even quarterly stats aren’t always indicative of what is truly happening in the market. The quarter reports show varying numbers about what is selling but often times a high or low priced home can distort the average values somewhat. Reports based on longer timelines tend to provide a better perspective on trends.
Overall Indian Ridge has remained fairly constant as a whole even though some homes have sold for far less than the average or far higher. As this market continues to improve, quality upgraded homes will continue to command a higher price. There is a tendency among buyers in the market today to want to buy homes that are newly upgraded and move in ready. These buyers tend to quickly discount homes that need work.
For the record, I represented 26.6% of all resale homes in 2013. This does not include the number of homes where I represented both buyer and seller. For the first quarter of this year, I have represented 43.8% of all homes sold and 50% of all homes in escrow. I continue to lead the market in Indian Ridge and throughout the desert as I rank in the top 10 Real Estate Professionals out of nearly 4000 agents. No other Indian Ridge Realtor holds the same distinction. Add the support and assistance of other Windermere Real Estate Professionals, we, as a brokerage firm, are able to bring in more buyers, effect more sales, hold more homes open and reach a broader market.
When considering a Real Estate Professional, ask the questions, ask to see supporting documentation that supports their presentation.
Again, if you have any questions or concerns, call me. It will always remain confidential. I look forward to hearing from you.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate Luxury Homes and Estates Division