Toscana CC 2012 1st Quarter Report
Dear Toscana Resident:
* To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.
When the real estate market’s cycle was showing a downward trend, news reports indicated home values were holding. At that time I knew the information was misleading for the Coachella Valley market. New home developments and homes under $500,000 were plagued with distressed sales and falling prices. For the first time in real estate history, the market collapsed from the bottom. In the early stages homes over $1 million were still selling, creating a picture of a more stable market when in fact the higher priced homes were sustaining the overall median price of homes while price of less expensive homes were falling rapidly.
Today’s national news coverage indicates home values are continuing to drop and compared to last year, this is true. On a local level, I predict headlines may soon report that median prices are on the rise. In January of this year, there were 4890 homes on the market and 805 lots for sale in the Coachella Valley. Currently there are 4048 homes on the market and 845 lots for sale. There are more than 50% fewer homes on the market compared to than last year creating a demand for properties that are buyer’s first choice. Unless they are willing to consider other floor plans, elevations and views, demand will in time drive prices up. Combine that with low interest rates and inflation, the time couldn’t be better to buy.
Banks are bundling bank properties and selling them to investors. In some markets this may be a good plan. In the desert, this plan is not necessary as foreclosed homes are in great demand with our limited inventory and would sell quickly if released for sale on the open market. Selling on the open market would ultimately increase the value as the demand would show the selling price and how quickly these homes are selling, something not reflected in bulk sales.
The federal government announced their plan to encourage the banks to renegotiate the loan amounts for homes where the owners have no equity. What they haven’t told the public is if the lender who originally approved and provided a loan sold that loan, the homeowner is not eligible for the loan reduction or modification. From the early 2000’s through 2007, only 20% of the loans remained in the bank’s own portfolio with the remaining loans sold which means the borrower that may be eligible for their principle to be dropped applies to only about 20% and perhaps less depending on how many of these 20% are in default or behind in payments.
Reports show California home sales in February were up 2.1% from January and up 5.5% from a year ago with the median price down 1.7% from a year ago. In the desert, gated communities not in golf course communities show a 7.3% increase in sales in the first quarter of 2012 compared to the same quarter in 2011 and a 2.3% drop in median price.
As shown in the Coachella Valley Total Home Sale Evaluation included in this report, the number of homes sold in the first quarter for this year is fairly equal to a year ago and the percent of homes sold in each of the four categories also support stabilization.
Where are the buyers coming from? Investor sales increased nearly 65% from 2011 and vacation homebuyers were up 7%. Of the investor buyers, 41% purchased more than one home compared to 34% a year ago. The median down payment for both buyers was 27%. Investors’ primary goal is to hold the home for 5 years and purchased primarily to generate rental income.
The typical investment home buyer is 50 years old, earns about $86,100 with about 30% of them purchasing a home more than 100 miles away. Only 5% of the investors remodeled and sold the home within the year.
The vacation home buyer is 50 years old, earns $88,600 a year and purchased a property more than 305 miles from their primary residence (35% over 100 miles and 37% over 500 miles).
Lifestyle was the major factor for 82% of the vacation homebuyers. Only 22% plan to rent. Eight out of ten second homebuyers said it was a good time to buy. With more people in their 40’s than 50’s, the long term demand for vacation homes will remain favorable. Another indication that will drive up demand for homes in vacation and resort communities.
When searching for a home, approximately 62% of the time, both men and women know within the first visit whether the home is right for them and emotion plays a major role. If your home is on the market and other homes like yours are selling, take time to visit homes within your community. If they have greater amenities, upgrades or location, then price your home accordingly. If you want a higher price, take the time to enhance your home so it appeals to more buyers.
Included in this report are the January/February residential sales comparisons by community for 2011 and 2012 broken down by single family and condo attached and detached homes. Single-family home sales are up, median price approximately the same. Condos show a decline in number of homes sold as well as the average median sales price. Note a $10,000,000 million dollar sale in Bighorn increased the Palm Desert figure to a higher than normal average.
Comparing 1st quarter of 2011 to 2012, homes sold in gated communities under $1.5 Million showed and increase in both price per square foot and percentage list to sell price. Homes selling between $750,000 to $1 million showed the biggest drop in price per square foot but an increase in the percentage of listing to selling price. Homes between $500,000 and $750,000 were basically unchanged. Those homes selling for less than $500,000 showed a 7.5% drop in price per square foot and a 1.25% drop in listing to selling price but a 12% increase in the number of homes sold.
Homes in golf course communities experienced a 1.8% increase in sales and a 2.5% increase in median price when comparing first quarters of 2011 and 2012.
Homes sold in golf course communities shows nine of the 12 communities showed the same or an increase in price per square foot and seven of the 12 with a higher median price than at the end of 2011. In the high-end golf course communities, three out of the seven show higher prices per square foot and average median prices for the homes sold.
An analysis on price per square foot for golf communities in the desert, properties selling over $1 million are selling for more per square foot than in 2011 and at a higher percentage of listing price to sales price. Those homes selling between $750,000 to $1 Million, the price per square foot is down 3.6% and off 1% for listing price to selling price. Homes between $500,000 to $750,000 are down 1.7% and nearly equally in listing to selling price. Homes under $500,000 are selling for 1.6% less with an increase of almost 1% in listing to selling price. With the market correcting and buyers purchasing for investment and lifestyle, the Coachella Valley is proving to be in excellent position for increased sales and prices as we move forward.
In the first quarter of this year, six re-sale homes sold for a total volume of $10,704,000. There are seven homes in escrow at a current sales volume of $13,783,000. Five of the six homes sold and four of the pending sales are properties listed and sold by outside real estate professionals. To date for this year, 60% of the sales are re-sales with the balance being new home sales. The average sold price is $1,784,000 with an average square foot price of $411.70. The average list to sale price is 92.3%, significantly higher than the past several years.
Ingrid and I have represented three sellers this quarter and all buyers have purchased a golf membership. We believe this is key to the long-term stability of the club.
In addition to our sales in Toscana, this has been an extremely busy quarter for me with additional sales in Bighorn, the Reserve, Indian Ridge and other golf course and residential communities. To date I have sold over $19 million in 2012. Talking with other agents actively selling as well, we all find the buyers are expecting a great deal, have specific wants and needs and are reluctant to write the offer on the home that appeals to them based on conflicting and confusing opinion.
With more people searching the Internet, a quality website is extremely important. I found I was ranked high both internationally and nationally.
To expand my website audience I recently accepted an invitation from Facebook to be the real estate agent for Riverside county. Facebook joined up with Google to monitor people’s keyword searches throughout the world so the next time the person goes on Facebook, my ad linking to my website appears. Facebook estimates approximately 30,000 hits per month. With Google as the number one search engine, when people are searching for homes for sale in Palm Desert and Indian Wells, my website will fall into the #1 or #2 position which will draw even greater attention to my website and the properties I represent.
Windermere has become a partner with Leading Real Estate Companies of the World®. LeadingRE is a global network comprised of 550 of the best-known local and regional real estate firms, with 4,600 offices and 140,000 Sales Associates in the U.S. and more than 30 other countries. LeadingRE is the country’s largest network of residential real estate firms, and network affiliates are widely recognized as the premier providers of quality residential real estate and relocation services. Collectively, these firms sell nearly 800,000 homes annually in the U.S. valued at nearly $220 billion, which is more than that of any national brand or franchise.
With the addition of these excellent websites linked to so many search engines and our agent contact system, my team has an even greater opportunity to attract both buyers and agents to my website and listings.
If you have any questions about the market or your home, give us a call. We look forward to talking with you.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
Real Estate Professional
Windermere Real Estate