Indian Ridge CC 2015 2nd 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:
The real estate market in the desert remains sluggish with approximately 1% fewer homes sold in the first two quarters of 2015 over the same time frame in 2014. Home sales under $500,000 saw a slight increase in percentage of the total homes sold while homes over $500,000 were down slightly and the million dollar plus homes sold was relatively unchanged.
Currently there are 3,937 homes on the market in the desert. This does not include those homes that are available but have been removed from the Multiple Listing Service for the summer. In Indian Ridge there are 55 homes actively listed with about another 10 to 15 available for purchase. Indian Ridge has eight homes in escrow (seven of these sales are ones where my team represents buyer, seller or both.) Thirty-five homes have sold today in 2015 in Indian Ridge which is down from a year ago.
Four of the seven luxury golf course communities we track (Country Club Home Sales Price Change and Appreciation Report attached) show an increase in average price per square foot of the homes sold. Three of the country clubs in this category show a drop in value which may be a result of the kind of home sold rather than the values of the homes in the community dropping. Andalusia and Toscana are still new home developments where new homes are selling for more than the resale homes. Andalusia has seen a rise in value and yet has sold fewer homes in the first two quarters of 2015 than in the same time frame in 2014 while Toscana has sold about the same number of homes with a drop in value. Toscana’s new construction homes have been selling for about 20% more than the homes on the resale market.
According to the "State of the Nation's Housing 2015,” a study done by Harvard University, the baby boomers (born between 1946 to 1964) continue to support the home sale market at a disproportionate rate. Millennials (those born between 1984 to 2004) are under performing from what would be expected with many carrying higher debt, insufficient cash for down payments and lower incomes. The X Generation (those born between 1965 to 1984), were more affected by the down turn of the market in the mid to late 2000's with many either losing most of their equity in their home or losing their home to a short sale or foreclosure. As a result, they are not yet eligible to get a loan or do not have the down payment required to qualify for a loan. Typically these would be move-up buyers.
The Consumer Financial Protection Board (CFPB) issued a proposed amendment that was to go into effect August 1st. It has been delayed until October 3, 2015. Under this rule called the TILA-RESPA Integrated Disclosure rule, more complex mortgage disclosure forms, timetables and compliance apparatus for lenders will be required. The new forms are the Loan Estimate and Closing Disclosure. The reason for these added forms is to make sure lenders are providing more easily understood terms and costs for the loan. Once implemented, the changes associated with the new loan paperwork plus the changes associated with the loan process are likely to drive delays in escrow closings, at least initially, as the learning curve and familiarity with the new rules ripple through the lending industry.
Economists have been predicting the Feds will be raising interest rates for the past few years with nothing happening. However, now the increase seems to be closer as interest rates under 4% for a fixed loan appear to be a thing of the past. Interest rates are expected to rise before the year is out.
The weaker Canadian dollars has reduced the number of Canadian buyers in the desert. Typically the majority of these buyers are looking for homes between $250,000 and $500,000. With the projected increase in home values and the lack of inventory for this price range of homes, the Canadian buyers may want to reconsider their decision of backing off the buying of their desert home. As inventory of this price range of homes continues to shrink, the options may require them to pay more for the same home, settle for less or take buying a home in the resort like communities off their bucket list. The Royal Bank of Canada provides loans to Canadians purchasing a home in the U.S. They use the borrower’s Canadian credit history which makes getting a loan much easier. This gives the Canadian buyer leverage that does not pull cash out when their dollar is low and provides them the opportunity to leverage their investment.
The California housing market continues to improve as shown by the increase in pending sales that were up 12.1% from May of 2014 in-spite of the shortage of inventory, the drop in the number of distressed sales such as REO's and Short Sales, and fewer homes at the lower price points on the market. So it appears the market is doing well in spite of these three conditions. Currently 92.6% of the re-sales are equity sales leaving only 7.4% REO and Short Sales, down from over 11 percent a year ago.
As of May this year, the median sales price of a home in California was $485,830, the highest since November of 2007. Homes in the San Francisco Bay Area sell for about 107.3% of the list price. Most homes are selling for about 93% of the list price. Here in the desert, the average home sale prices run about 95% of the list price. It makes a difference here in the desert when a home has been properly priced, is nicely upgraded and where there is not an over-abundance of similar homes available on the market.
Only five of the nineteen country clubs I track have sold more homes in the first two quarters of this year compared to a year ago. The increase in number of sales appears to have no correlation to the price per square foot. There are ten golf communities that have experienced an increase in price per square foot from a year ago but they are not necessarily the same communities that have experienced more home sales in the first two quarters of 2015 over the same time frame in 2014.
The number of homes sold in Indian Ridge is off 24% for the first two quarters of 2015 compared to the same time period in 2014. The PUD section of the community experienced the biggest slow down with thirteen fewer homes selling in the first two quarters of this year. Prices have held fairly constant in the HOA compared to the PUD which experienced a 10.4% drop. The overall price per square foot is up 6.3% overall in Indian Ridge, however the average sold price is off 7.5% from 2014. The number of homes selling in the HOA remain fairly constant and experienced a slight increase in the average sales price. While this is true based on the average number of homes sold, the price points for the Acacia's have experienced a slight set back in what the Buyers paid for these homes in 2014 compared to what they are willing to pay in 2015. The primary reason for the drop in home values for Acacia’s is due to the abundance of similar homes in the community also on the market.
Comparing Indian Ridge to one of its nearest competitors, Rancho La Quinta (RLQ), RLQ has sold just three fewer homes in the first two quarters of this year compared to a year ago and have experienced a 3.4% increase in average sales price. They are at 70% of their total sales compared to a year ago and their average price per square foot is unchanged from a year ago. The positive for Rancho La Quinta is that this year their highest price for a home tipped the $2 million mark for the first time since 2009.
While the total number of Indian Ridge home sales has seen a drop, my team has seen a major increase in the number of homes where we represent buyer, seller or both. In 2014 we represented 39.1% of all sales. To date for 2015, we represent 49% market share of homes sold. Currently seven of the eight homes in escrow are ones where we represent the buyer, seller or both. Our nearest competitor has 23% market share with the on-site sales office in third place with 14% market share.
Barbara Merrill, joined my team about 18 months ago. Since that time she has gained tremendous success representing buyers and helping me with our sellers as well. Should you need our services, please don’t hesitate to contact Barbara or myself as either one of us can assist you with your real estate needs and questions.
If you would like a free comprehensive analysis of your home we would be happy to meet with you confidentially. Our success is a result of a full marketing program that includes open houses, web-based and print media marketing programs along with a reputation where we are known for our integrity, knowledge and ability to negotiate to get homes sold.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate Luxury Homes and Estates Division