Toscana CC 2011 1st Quarter Report
Dear Toscana Resident:
As the end of each new quarter looms, I begin collecting information from many different resources and after doing all the data updates, I read through a mountain of material to determine what should be included in my letter. Each time, I never really know the final outcome until I have completed the research. It’s quite easy to become confused with so many rumors and information that may be inaccurate or misleading. This quarter is proving to be no different. After all the years of doing this report, I do know that numbers, if left alone, do not lie and tell the story of what has happened and is currently happening in the real estate market.
Nationally we know sales are down 9.6% this year. In the fourth quarter of 2010 and the first three weeks of January, it was very active here in the desert followed by a lull that made us ask ‘what just happened here?’ Then the showings started again and while the sales aren’t fast and furious, the market is stabilizing. Of the 20 major cities tracked for home prices, none of California’s cities suffered declines. In fact, they showed a slight increase in year over year prices. We used to say that the real estate market would drive the economic recovery. It is now believed the job market will drive the housing market and its recovery. Interest rates are expected to remain the same for the duration of this year.
According to the LA Times, all-cash buyers accounted for 30.9% of California home and condo sales in January. Cash buyers have become major players in the more expensive communities as they account for 2/3’s of all these home sales. Investors purchasing property are investing for several reasons: they believe the housing will out perform other financial investments with homes presently selling for up to 40% off the price these homes would have sold for at the peak of the real estate market. The “smart money” buyers are ahead of the game and are buying before the summer selling season when they will have more competition. They look at these investments as land banking and are betting prices will go up as the market continues toward a slow paced recovery.
The difficulty in determining a listing and potential sales price, especially the luxury homes, is that the appraisers don’t know how to handle the differences in prices for the various sizes of homes, locations and upgrades. This fact holds true as some buyers will truly appreciate the value of a special home while others will think they can buy the quality home for the same price as a home that does not offer more outstanding upgrades, location or potential appreciation.
On the local level, according to Data Quick, home sales in the Coachella Valley rose 7.3% in February compared to the same month last year. The sales were brisk with Condo sales – up 31% in year over year. While Riverside County dropped 11.2% in sales and Southern California dropped 6.4%, we experienced a 7.3% increase. This clearly is a sign of how difficult it is to compare the valley’s market to the rest of southern California and nationally. The median price in the valley was $200,000 in February, the same as February of 2010 and up from $181,250 in January of this year. The median price of a home in the Coachella Valley between April of 2009 and February of this year jumped 26.8%. According to the Multiple Listings, pending sales are down only 2% for the first 4.5 months this year compared to 2011. The average sale price was $305,652, also down from the previous year. The average days on market increased 11 days from a year ago. Buyers continue to search for homes with no sense of urgency and if a home they like sells, they are confident they will find another that will also meet their need.
The expectation is a slow growth with about a 2% increase in home sales and prices this year. Factors helping our local market may be low mortgage rates, record level affordability, fewer distressed sales and banks filing fewer foreclosures and attempting to work with sellers.
In the attached Coachella Valley Total Home Sales Evaluation and other club and sales information, it is apparent the number of sales for the different price points are changing with homes over $500,000 slowly moving up. Country club sales show only three clubs with fewer sales this quarter compared to the first quarter of 2010. The lowest priced homes sold in each of the golf course communities all are higher than last year except for Indian Ridge where one home was a bank owned sale. This shows a stabilization of the market.
In higher end communities the sales are fairly static for 2010 and 2011 with all experiencing a drop in price per square foot. The high and low sale prices are not an accurate indication of the market due to the small number of sales.
In Toscana there are 31 active homes and 4 lots for sale listed in the Multiple Listing Service. Six homes sold since the first of the year, 4 re-sale homes and 2 developer spec homes. Of the 4 pending sales, 2 are tied to a trade between two homeowners and 2 are developer spec homes. Seven home sites sold, 2 were re-sale lots on Via Siena and 5 were developer lots on Via Pisa. Our team, Diane Williams & Associates, represented 33% of the sellers of the re-sale homes. Our focus is clearly on getting the re-sale homes sold by bringing in buyers and outside real estate professionals who would not normally know anything about Toscana Country Club. If our buyers do not find a re-sale property that meets their needs, we show them the new homes sites and floor plans. Because real estate professional’s focus is clearly on re-sale homes, 50% of all re-sales in Toscana this year were represented by the outside real estate community.
If you have any questions about the market or suggestions on what additional information you would find helpful, please don’t hesitate to call me.
Please click the link "View PDF Document" located under my photo to view a printable version of the entire report.
Associate Broker/Executive Premier Director
Windermere Real Estate