Indian Ridge CC 2015 3rd Quarter Report
*To view my entire Quarterly Report, please select “View PDF Document” located to the right of this page under my photo.
In the Coachella Valley more homes sold in the third quarter of this year than in the same time frame in 2014. The increase in sales were in the under $500,000 category with the over $500,000 home sales unchanged from a year ago. During the first three quarters, sales were up 3.8% from a year ago.
Since bottoming out in the first quarter of 2012, home values have increased 24% in the United States. Wages increased 7%. In Riverside county, weekly wage increases (up 10%) have outpaced the home appreciation (up 5%). Currently affordability in Riverside is at 40%, down from its high of 56%.
Nationally, home sales saw in 6.3% increase in price. The Western states experienced an increase of 7.5%. Lack of inventory and restricted mortgage credit are attributed to keeping the number of sales down.
California home sales slowed in the month of August, down 3.8% from July but still up 9.3% compared to sales in August of 2014. This shows home prices are stabilizing. The average price per square foot was $238 in August of 2015 for single family homes and while down from the preceding month, there was no change from August of 2014. Equity sales are at 93% with only 7% of the home sales classified as distressed sales.
In California, one third of the homes sold for more than asking price selling for 11% on average more than the list price. Metro areas such as the San Francisco area attributed to this increase due to lack of homes in the areas where the buyers want to live and near their work. Buyers are reluctant to purchase a home that requires them to commute or drive for their social activities. Forty-three percent of the homes sold for less than asking price at an average of 9% less than list price. In the Coachella Valley, while it can vary, most homes are selling for about 95% of the list price.
New home sales in the West saw a 6.7% increase with new homes unsold inventory at a 5.2 month supply. California environmental laws have increased home building costs by $48,000. Construction labor costs in California are 20% higher than in other metro areas. California housing development costs are $50,000-$75,000 higher per unit than elsewhere in the U.S.
Effective October 3rd of this year TRID (TILA-RESPA Integrated Disclosures) became effective. Escrow and lending firms have been working hard to be ready for these new requirements. One of the lenders I use believes this is not over regulation but a program that will lead buyers to a better understanding of the lending process when purchasing a home and should lead to the consumer asking good, solid questions about the loan that will help establish trust and confidence between the consumer and lenders.
In review of the Country Club Home sales where I track nineteen country clubs, there are nine clubs with average sales prices down from 2014. Three of the high to mid-level country clubs have an average sales price less than 2013 figures.The high-end golf course communities show five of the seven having an average sale price below the 2013 numbers. This is more than likely a result of the kind of homes sold rather than a drop in value. Twelve of the country clubs show the number of homes sold to date are less than 75% of the total number of homes sold in 2014 with five more barely above the 75% mark. These clubs are on track to potentially sell fewer homes in 2015 than 2014. Sales in Morningside, Mountain View and the Hideaway are over 90% of the total sales in 2014 and all three have home sales prices above the 2014 average sale price.
Diane R. Williams
Associate Broker/Executive Luxury Director
Bennion Deville Luxury Homes and Estates Division