Toscana CC 2012 2nd Quarter Report
*To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.
Dear Toscana Resident:
About a year ago I reported that the market had bottomed and that the only remaining issue holding values down were homes sellers had to sell. Throughout the year, some markets have shown strong signs of improvement while others are lagging behind. Certain areas of California are showing greater appreciation in value, homes priced well are receiving multiple offers with an increase in the number of home sales, while other areas are not experiencing a strong rise in home sales or increased values.
Generalization is sometimes dangerous as it can mislead buyers and sellers about the true trend in their community. For example, one community may show less than a 5 month supply of homes while another similar community shows a 9-month supply. If you are planning to put your home on the market, be sure you know the statistical trends your community as it will help you with proper pricing of your home and be guide for realistic expectations.
As long the federal and state governments continue to expand the entitlement programs, private parties and businesses will continue to sit on their cash until signs of more frugal government spending give them the confidence to invest in growing their businesses and thus reducing the number of people unemployed.
Interest rates remain under 4% and are expected to remain low for at least 6 months to a year. While this is great for those who qualify, for those who are unemployed the rate could be zero and mean nothing. So the unemployment rate must go down in order for many to qualify to purchase homes.
Historically a falling real estate market has lead the national economy into a recession and a recovering real estate market leads the national economy out of a recession. There are signs that the latter is taking place. If the federal and state governments would correct their fiscal problems, the recovery would improve at a much faster rate than any of us could imagine.
The National Real Estate Association predicts homes sales for 2012 to increase by 10% with an appreciation of 2% to 3%. The appreciation in 2013 is expected to be of 4% to 5%. Various parts of the country are showing less appreciation than others: Phoenix is expected to see a 2% appreciation while the Bay area in San Francisco anticipates over 9% in 2012.
Distressed homes – foreclosures and short sales accounted for 25% of May sales, down from 28% in April and 31% from a year ago. Investors accounted for 17% of the sales, down from 19% a year ago. Cash accounted for 28% of the home sales in May. The median single-family home price showed an average 7.7% increase from a year ago with condos up 8.8% in the same time period. The median price in the west showed a 13.4% increase. All clear signs that with low interest rates and the start of rising prices, this is truly the best time for buyers to purchase a home.
In Southern California, new homes sales are expected to increase 10% in 2012. The current average price is $373,000 with an expected increase of 5.7% in 2013. New housing starts to expected to increase 26% this year with another 50% jump in 2013. In the valley, 45 new homes sold in May, up from 32 in April with a median price of $236,250.
Today’s buyers prefer open floor plans that are energy efficiency and with high-end architectural design. New homes could out pace sales of repetitive floor plans that were built in the 80’s and 90’s as the new designs may appeal to the buyers more than homes with limited upgrades or in need of updating.
There were 4890 homes on the market in January in the Coachella Valley. Currently there are about 3048 homes on the market, more than 50% less than in February of 2011. There are 2,034 single family and 1,023 condos on the market.
As shown in the Coachella Valley Total Home Sale Evaluation included in this report, the number of homes sold in the second quarter of this year is up 4% from a year ago. Homes selling for more than $1 million are up 30% from a year ago and up nearly 32% from the first quarter of this year. Even with the increase in million dollar sales, there remains a large inventory of high-end homes while lower priced homes are in high demand and often getting multiple offers.
The market shows it is cheaper to purchase than rent a home as shown in 98 major cities. With the number of families who have been affected by the long term decline in home values, the demand for rentals remains strong for those not able to secure a conventional loan. Unfurnished long term rentals in the desert are rare and in great demand.
International buyers currently account for about 8.9% of the home sales with predominant sales in Florida, California, Texas, Arizona and New York with 62% paying cash to purchase the home. The five major countries are Canada, China, Mexico, India and the United Kingdom.
Certain country clubs are experiencing more sales than others, some showing an increase in price but the number of sales down compared to 2011. Several country clubs are outpacing their sales from a year ago, while others are lagging behind. In review of the clubs, there appears to be no correlation to lower prices or country club membership programs. Only time will determine why some are recovering slower than others and if the club is having a more difficult time competing with other communities.
In the 2nd quarter, 10 homes sold for a total of 16 re-sales since the first of the year. In 2011 there were 25 homes sold so we are ahead of last year’s pace. There are four homes in escrow. So for 2012, Toscana leads the re-sales in the luxury golf course communities. While Bighorn does not report all sales through the MLS, the increased interest in Toscana shows a favorable growth. New home sales and lot sales are up as more people are willing to go through the building process in order to get the home on the lot they prefer with their personal upgrades. The average price per square foot, while down below the first quarter, the average sale price is up from last year.
Of all the resale homes in Toscana that have sold this year, Windermere is the number one real estate company representing more buyers and sellers than any other outside real estate brokerage. Toscana represented 12 buyers and sellers and Windermere represented 11 buyers and sellers. The remaining 9 buyers and sellers were represented by all other brokerages combined. In all sales handled by Diane Williams & Associates, the buyers purchased the seller’s golf membership.
During the summer months, we typically use our down time to evaluate our marketing program and learn what new programs and methods can be applied to expand our marketing program to reach an even broader audience for our clients. This summer has proven to be very busy with home sales still very active. In our spare time we have added even greater website presence in zip codes 92260, 92210 and 92211 on Zillow. The number of buyer inquiries has increased from approximately 5 per week to about 21 to 35 per week giving us an even greater opportunity to attract buyers to our seller’s homes.
Google & Facebook linked together to provide a program where people interested in homes in Riverside county see Diane Williams & Associates and can click on a link that takes them to our website. We are the only real estate team receiving all these leads in the entire county of Riverside. Currently there are 644 visitors a day visiting my website which is the highest of any other agent in the Coachella Valley. Our programs continue to draw greater attention to the properties we represent, reaching both those who are already familiar with the area and those who are new or interested in the desert lifestyle.
We hope you enjoy the summer months and we look forward to seeing you in the fall.
If you have any questions about the market or about the value of your home, give us a call.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate