Toscana CC 2012 Annual 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.
Happy New Year. As we welcome in 2013 we remain positive that trends in the real estate market in the desert will continue to improve.
Million dollar home sales in California reached their highest since the third quarter of 2007. In Southern California, November sales were up 34.6% for homes $300,000 to $800,000 and up 46.8% for homes over $800,000, the highest since July of 2008. Homes under $300,000 saw a drop of just under 8%. The reason for the drop in sales was due to low inventory of short sales and foreclosures. The reason for the increased sales in higher priced home was due to values increasing and properties near the $1 million being pushed over the million-dollar mark. Investors are viewing real estate as a good investment and have been actively buying this past year.
The median sized million-dollar home sold in California was 2,629 SF. with four bedrooms and three baths at $632 per square foot for a total median price of $1,661,528. Looking at homes in the desert there are 401 homes on the marketing asking $1 million or more with an average price of $1,800,412 for a 4,427 square foot home and at $368 per square foot. In 2006-2008, the average price per square foot for a million dollar home in the desert was $433. There are many great buys in the desert. As buyers continue to search for the 'right' property, they find it harder to find the perfect home. This means the buyer has to
be willing to pay more for what they want or be willing to give up some of their criteria. Currently only 25% of the buyers believe home prices are going to increase this year while the other 75% believe they have more time before prices will increase. It is interesting to note that 75% of homeowners believe the value of their home is higher than what their agent recommends while 63% of the buyers believe the home is overpriced.
Cash buyers accounted for 31% of the million dollar home sales and 59.4% of the buyers buying a home over $5 million paid cash. Leading lenders for million dollar sales were Wells Fargo, First Republic and Bank of America. Cash buyers in the early 2000's represented 10% of the market. Today they represent 30%. International buyers pay cash for a home 62% of the time. Jumbo loans (loans over $417,000 in the desert) accounted for 21% of purchase lending, up from 14.6% a year ago and is the highest since August of 2007 when they represented 40% of the market.
California forecasts a 1.3% increase in sales and a 5.7% increase in home values for 2013. Statewide median prices in November were up 24.8% compared to a year ago. This statewide gain was due to the sales of coastal properties with typically higher price tags. Inventory was down to a 3.1 month’s supply, a drop from 5.3 month’s supply a year ago. Riverside County showed a 19.8% increase in sale price but close to a 3% drop in number of sales due to low inventory.
As the real estate market continues to improve, the advantage of the low interest rates will be offset by the rising home prices. Single-family home affordability in California is at 49%. During the peak market in the mid 2000's affordability in the desert was about 15%. To qualify for a purchase of a statewide median priced single family home, the minimum annual income would have to be $65,810. Riverside County’s affordability is 63% where an income of $43,890 meets the requirement to purchase a median value home of $226,660.
Inflationary pressures are expected to build over the next two years. As a result interest rates will rise. Buyers wanting to purchase a home who have lower credit scores should work hard to raise their credit rating as quickly as possible in order to qualify for the lower interest rates and be able to purchase a home at the still lower prices.
November foreclosure sales accounted for 15.3% of southern California's market, down from 31.6% a year ago. Foreclosure re-sales were at an all time high at 56.7% in February of 2009. Short sales accounted for 26.6% of the sales in November just up slightly from a year ago. During the fiscal cliff vote by Congress, the mortgage debt relief was extended another year giving tax relief for homeowners going through a short sale, modification or foreclosure.
The Home Sales Evaluation included with this letter shows the number of home sales has continued to increase each year from the lowest point in 2007. In 2012, total home sales were up 1.5% with a significant increase in re-sales of homes over $500,000 and $1 million.
Annual sales were fairly consistent in the country clubs in 2011. The higher-end country clubs were up 13% in total sales for the year with Toscana and The Hideaway with the highest number of sales. Toscana showed an increase of 15.2% in sales price, $1,771,000+ and a 16% increase in the number of resales. While The Hideaway experienced higher sales this year as well, they had a 15.1% drop in average sale price for 2012.
Total resales in Toscana for 2012 reached $51,378,500, an increase of 37.9% from 2011 when the total was $37,251,500. Windermere represented either the buyer or seller in 55% of all re-sales transactions in Toscana for 2012 and remains the top outside Real Estate Brokerage firm representing Buyers and Sellers in Toscana. As the top luxury brokerage firm, we sold over $297,469,000 in million dollar home sales through November of 2011, more than two times their nearest competing Brokerage firm.
Currently I have 6 properties in Toscana available for sale plus a custom estate lot. I would love the opportunity to work with buyers interested in moving to Toscana so please feel free to contact me or share my phone number with those you know.
I hope you find the report helpful. I have truly enjoyed doing the report every quarter since 2004 and each report takes on a life of its own. I look forward to another great year representing Buyers and Sellers in Toscana Country Club.
Please feel free to call me anytime with questions you might have.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
CNBC, Robert Frank, 12/10/12
DQ News, 10/17/12 & 12//12/12
CDAR MLS for sales data
CAR: 11/2012; 12/12/12; 12/13/11, Real Estate 411, 2013 Market Forecast, 1/2/13
R/S Media 12//28/12
Wall Street Journal, 12/17/12
LA Times, Don Lee, 12/15/12; 12/17/12
San Francisco Chronicle, 11/10/12; 11/19/12
NAR, 11/10/12; 11/19/12
John Seymour, What’s Hot What’s Not, December, 2012