Toscana CC 2009 Annual Report
Dear Toscana Resident:
The good news/bad news in the real estate market is that 2009 was a difficult year. The attached 7 year history of all residential sales shows that 97.3% of the homes sold in the Coachella Valley were under $1 million and homes under $500,000 represented 87.8% of the market. Properties over $1 million represent 2.9% of the market (unchanged from 2008)and .07% for those homes over $2 million. So while the inventory may not be as high, the supply for the more expensive homes is certainly greater than the demand. The California Association of Realtors show the numbers to be slightly different when looking at the November sales. Sales under $500,000 represented 75% of all sales in November, 15% for those homes between $500,000 and $1 million and 5% for those over $1 million. These numbers have changed since the first of the year, a sign that things may be improving in the desert real estate market. These are significant changes from the August 2007 numbers where homes under $500,000 represented 43% of all sales, those between $500,000 and $ 1million represented 42% and the over $1 Million sales were at 15%.
Year to year sales continue to rise in our state, increasing 4.7% with sales soaring above the 500,000 unit threshold for the 15th consecutive month. Statewide median priced homes showed a 5.8% increase from 2008 to $304,520. This is good news after experiencing an average 59% drop from the peak of California median prices in February of 2007.
According to my lender, the main constraint in sales is the lack of funding compounded by higher underwriting requirements. Jumbo loans, normally .2% to .4% higher than conforming loans, currently run two to three times the normal interest rate difference. The passage of the economic stimulus package could have a positive affect on the market as the proposed plan would increase the conforming loan limit from $417,000 to $729,750. The limit depends upon county. Conforming loans for Riverside is $500,000 while Orange County is $729,000.
The national real estate market forecast remains in question as the market heads to a slow down in other areas during the winter months with some forecasting a double dip with our recovery in 2009 dropping again in 2010. Others expect the housing market to limp along even as the rest of the economy continues to grow stronger. This is based on a sharp decline in pending sales from October to November of 2009. That said, pending sales were down 26% in the northeast and Midwest, 15% down in the south and only down 3% in the west. The National Association of Realtors say the sales decline during the winter months will begin to rise in the spring. The California Association of Realtors (CAR) projects the average home price in California to rise 3.3% to $280,000 in 2010. Leslie Appleton Young, CAR's Vice President and Chief Economist, says that unlike the rest of the country, home sales in California reached its bottom 2 years ago and median price reached its low point in February of 2009.
While the real estate market appears to be improving in California, those properties priced to sell will receive multiple offers while over priced homes will remain on the market with few showings and no offers as a result of those showings. Now more than ever, it is important to know the true market place so as a buyer or seller, offers and sales become more indicative of the true market.
Buyers should focus on purchasing a home that meets their wants and needs and is priced with regards to the market place and degree of upgrades and location. We often learn that the bottom of the market has been reached some 9 months later. It would appear we have reached the bottom and should begin the slow rise in price appreciation. History shows that in the past 40 years, those homeowners who purchased and lived in their home for at least 5 years have averaged a 5% annual rate of return.
Included with this letter are the following (to see reports click "View PDF Document" under my photo):
7 year history of the % of Market Share of Homes sold by Price Range
7 year history of Homes Sold in Competing Country Clubs
7 year history of Median Sales Price of Homes Sold in Competing Country Clubs
7 year history of High/Low Price range of Homes Sold in Competing Country Clubs
Toscana sales are up from last year. Eleven homes sold in 2009 as opposed to 7 in 2008. We have definitely seen an increase in showings over the past 3 months. The demand for south and west facing homes remains strong. The average price per square foot dropped from $502.90 to $432.28 in 2009. Resale prices per square foot for north facing average $444/SF with south facing averaging $538. Spec home prices per square foot are $405 and $499 for north and south facing respectively. Clearly in this market, the re-sale homes offer the better value due to upgrades such as window treatment, electronics and furnishings. Eight of the eleven homes sold this past year were either south or west facing. The total resale volume in Toscana was $33,831,189 with the 11 sales. Outside Real Estate Professionals accounted for 8 of those sales, accounting for 72.8% of the total sales.
With move-up buyers now ready to purchase a larger home, we will see more buyers interested in trades and seller financing. The difficulty is placing a true value on each of the properties based on demand and ease of sale and pricing acceptable to both parties. Using a Professional who specializes in re-sales full-time is extremely important in order to get the more difficult transactions closed. We at Windermere are a strong group of professionals who specialize in luxury home sales. Our representation of buyers and sellers in Toscana over the past two years is equal to the on site office whose primary goal is to sell the spec homes and new homes.
I want to thank you for all your referrals and continued confidence in my team. As the leading Windermere agent in Toscana, I currently represent 10 sellers and have 8 homes listed for resale and two custom estate lots. As the first Real Estate Professional to sell a custom estate lot and the first resale home in Toscana, my presence in the community continues to grow. Other Real Estate Professionals contact me to discuss sales in Toscana and show my properties as they know I will accommodate them for any showings, day or night. Essential to the process is following up with all showings and providing feedback to my sellers. My sole concentration in Toscana is with the re-sale market providing my clients with that special attention their home needs to get it sold.
Please feel free to contact me if you have any questions or concerns or just to talk about what is happening in the real estate market in general or throughout the Coachella Valley. While I have many listings in Indian Ridge and Toscana, my knowledge base of all country clubs in the desert gives my the opportunity to help find the right club and home for those wanting to make this valley their home.
Associate Broker/Executive Premier Director
Windermere Real Estate
Information is compiled by Diane Williams using multiple resources including the NAR, CAR, Desert Sun, Wall Street Journal, John Seymour's "What's Hot What's Not", and the Multiple Listing Service. If your home is currently listed with another Broker, please disregard. It is not our intention to solicit other Broker's listings.