Indian Ridge CC 2016 Annual Report
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We want to first wish you all a very Happy New Year. The On-Site Sales office continues to grow as we move into another year. There is good news. We experienced a busier summer and fall than in years past and December was extremely busy compared to all my years in the industry.
When writing the annual report on the real estate market it is important to determine if it’s just our business that is growing or if the market overall and in specific areas are also getting busier? This requires more research in order to see the true market trends. I have learned over the years that what is happening in one city in the desert doesn’t necessarily transcend to another and the same for each golf course community.
In Riverside County, single family home sales were up 32.5% in November compared to a year ago and up 6.8% in median sales price. Inventory dropped 29.7% and days on market dropped to 47 days, down 16.1%. The City of Palm Springs is only 5.8% off its high in 2006 for single family homes. The other eight cities remain 22.5% to 38.9% off their all-time high for single family homes and 22.7% to 57.3% for condominiums. Palm Desert has experienced a 1.4% drop in median price for single family homes and are still off 35.5% from the all-time high. Condominium sales prices are down 2.5% from a year ago and 39.8% off the all-time high. Palm Springs and Palm Desert have been the two leading communities in sales for the past two years and both show an increase in sales in 2016 compared to 2015. With consumer confidence in the market growing and the rise in sales and the decline in inventory, prices will rise as we proceed through 2017. Any predictions after 2017 is predicated on what Trump and his staff can accomplish in his first year in office.
Nationally, home sales increased for the third consecutive month in November, the highest pace in almost 10 years. Inventories dropped 9.3% below last year and median home prices were up 6.8%. New home construction is expected to grow in 2017 as a result of a “significant boost in confidence” after the election results. Now is the time to buy. The National Association of Realtors is predicting a hotter market in 2017 which should drive up prices so now is the time for the buyer to purchase a home. Buyer’s purchase power is expecting to wain as we move farther into 2017. According to S & P Core Logic, the average home price in September was just 0.1% over the higher prices of July 2006. Adjusting for inflation, homes need to gain another 16% to actually recover from the loss in value since the great depression.
Currently there are 4,704 homes on the market in the Coachella Valley, down about 7% from a year ago. Indian Ridge has 81 homes on the market which represents 7.5% of the homes in the community and is down 8.9% from a year ago. Experts have said inventory is down and that appears to be true for Indian Ridge as well. The Million-dollar luxury home market chart included in this report shows inventory for homes over one million still high. It also shows that sales are up in the luxury market, however, prices will more than likely remain soft as a result of the number of homes still available for buyer consideration. The good news is there were 10 homes that sold for over $7 million in 2016 compared to one home in 2015. Homes selling over $1 million saw an increase in sales of 13.1% in the last half of 2016 compared to previous years and with sales in the first half of the year holding fairly steady.
In 2016, investors returned to the desert purchasing many homes throughout the valley after staying away for about two years. They primarily were looking for homes not in golf course communities where they can flip or lease short term for high prices during the special international events here is the desert. Cities are tracking short term leases to charge Landlords occupancy taxes. Palm Springs is trying to limit the number of lease transactions per property and possibly limit the number of homes an investor can lease out in the course of a year.
While the increase in mortgage interest rates are expected to rise this year, this should only minimally affect the second home buyer market here in the desert. Freddie Mac has increased the cap on conventional loans in the desert from $417,000 to $424,100. This cap is lower than coastal areas so when purchasing a home in the desert it is important to know the cap for conventional loans varies by area. Buyer affordability in California for single family homes is at 31% while condo/townhome affordability is at 40%.
Thirteen of the nineteen country clubs sold the same or more homes in 2016 compared to 2015. Only four of the country clubs showed an increase in sales price. So, while urban areas were hot markets, the resort environments that are second or third homes for many buyers, was an option, not a requirement. The increase in sales the last half of the year and the growing economy and anticipation with the regime change, will likely spur a better market in the resort areas.
While only 39% of the homes across the Coachella Valley sold in the last half of the year, nearly 51% of the homes in Palm Desert sold during the last half of the year. Indian Ridge is right in line with 55.7% of the homes closing escrow in the last half of the year. The On-Site office sold nearly 50% of the homes in the Club’s fiscal year of October 1, 2015 to September 30, 2016 with 53% of their sales occurring in the last half of the fiscal year. The On-Site office represented 50% of the homes that sold in the fourth quarter. During the Club’s fiscal year, we represented more buyers than the next three leading selling agents selling in Indian Ridge combined. So far this year we are on pace with heavy traffic similar to what we experienced in the last half of 2016.
According to Facts and Trends from the MLS for Indian Ridge, homes pending for January are up 33% from a year ago.
As of January 13th, one home closed escrow with nine more in escrow. We represented the Seller, Buyer or both in 6 of the pending sales. We expect this year to be a very big year for us. The increase in traffic is a result of many client referrals and an increase in buyer walk-ins, many who are familiar with our team, our website and buyers who have done their homework prior to stopping in to see us.
You are welcome to stop by the Indian Ridge On-Site Sales office and meet the team. If you would like a free market analysis of your home, we are happy to meet with you. We encourage calling to schedule for an appointment so we can give you the time you deserve. Our entire team looks forward to working with many of you this season.
Diane R. Williams
Associate Broker/Executive Luxury Director
Bennion Deville Homes
Indian Ridge On-Site Sales Office and Luxury Homes & Estates Division