Toscana CC 2014 3rd 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.
The third quarter of 2014 is over and this has been the biggest selling summer for me ever. The Real Estate market had a slow start this year, but by the end of the first quarter we had many more showings, we were putting homes into escrow, and the million dollar luxury homes began to move. We really didn't experience a slow down this summer until the later part of September. Many buyers in our market today continue to search for the right property and are willing to wait longer before purchasing a home. However, approximately 48% of the buyers who purchased a home this year, felt they settled for a home that was less than what they expected to buy. Some of the reasons for the purchase of a home that didn’t completely meet their expectations were based on price, the feeling they were getting great value, and they wanted to complete a purchase before rising prices and interest rates would eliminate potential homes that currently fell within their price point.
Once again, after more than 5 years, we are seeing new home construction with model homes to see. Many of these new developments in the desert are offering more modern décor, green energy living reducing the overall utility costs and a more contemporary design. These new homes are in residential areas where age specific activities are readily available…dining, tennis, hiking, biking, health and lifestyle facilities and can be less expensive to purchase and maintain. New home sales were up 33% this past August over a year ago and up 18% from July.
The prices for new homes are increasing faster than resale homes and it is expected this trend will continue for months to come. So the rising costs for new homes will drive the market price more than Multiple Listing Services. For resale homes, the new home availability does place a premium on quality upgrades and remodels. Bottom line, buyers like and want the feeling of ‘new’.
So if you are considering selling your home, what do you need to do to get your home in the best possible position to sell? Over the past several years, I have recommended more of my Sellers to stage their home by de-cluttering and doing the repairs that are visibly seen by the buyer. Painting, repairing flooring, replacing or cleaning the carpet and staging the home makes a home more marketable. Just by de-cluttering, lightening and brightening and staging the home that could cost as low as $1,000 can net a seller over $5,000 at close of escrow. The Real Estate Staging Association, in their recent report, said these staged homes reduce the average days on market from 143 to an average of 40 days. The market that remains soft is the $500,000 to $1,000,000 where homes on average are on the market 148 days. When staged, they drop to 43 days on market. While all areas and communities are different nationally, this stresses the importance of getting your home in market condition to get the best possible price in the shortest amount of time. Keep in mind we are now competing with new home construction once again so keeping your home current is extremely important in order to sell more quickly and for a higher price. Buyers love the look and feel of Model Homes, so making your home resemble a Model Home pays dividends.
The golf club communities throughout the country continue to compete for a smaller audience. Since 2002 the number of golfers are down 24%. In 2013 alone, the game lost 1.1 million golfers. Golf sales for equipment are affecting the major sporting stores and their prediction is we are not at the bottom yet. The number of rounds of golf are way down and people under 35 years of age are leaving the game.
Golf course communities continue to face greater challenges and it isn't going to get easier as the costs to operate and maintain golf course communities continue to rise, pricing many potential members out of that market.
While all this feels like doom and gloom, the good news is the areas where the country has experienced greater pending sales has been in the south at 4.2% increase and in the west with a 4% increase.
The good news for the Coachella Valley is the million dollar luxury home market in California has started to improve rising to its highest level in the last seven years. As stated in my last quarterly report, million dollar sales were up 60.4% in the second quarter over the first quarter of this year. This is the highest increase in million dollar home sales since the second quarter of 2007. While million dollar home sales are up 9.1% year to date, overall home sales were down 7.4% which shows the increase in buyers willing to pay more for the home they are purchasing than in the past. With the increase in sales of luxury homes, and most within a country club, clubs should have experienced an increase in home sales and membership sales this year. These are sophisticated buyers who are typically not as concerned about income, job security, down payments and interest rates but more interested in where to place their substantial assets.
It is interesting to note that the higher the price of the home sold, the greater number of cash buyers. For those obtaining a loan, they put down 30% of the purchase price. Jumbo loans ($417,000+ in the Coachella Valley) accounted for 32.3% of all loans. Prior to August of 2007, jumbo loans represented 40% of all loans. The lowest point for jumbo loans was 9.3% back in January of 2009.
Absentee buyers made up 23.5% of the buyers in Southern California. The peak in this category was 32.4% back in January of 2013 when investors were aggressively buying the distressed homes.
The percentage of homes sales organized within different price ranges show that the under $500,000 homes have represented approximately 77% of all sales for 2014 with sales over $500,000 at about 23%. The luxury market for homes over one million, as we discussed earlier, continue to show improvement.
Comparing Country Club sales over the past three years, some communities are experiencing greater sales and increasing values while others remain relatively unchanged or less than the previous years. This can be seen on the attached Country Club Sales Price Change and Appreciation Report.
Toscana is doing well with an increase of 5.8% in average sale price in 2014 over the previous year to date and is on target to sell about the same number of resale and spec homes this year as they have in the two preceding years. New home construction is also moving very well as buyers are also purchasing lots and building. Comparatively, with the recent increase in prices for the new homes, even with the builder’s incentives for the new homes, the cost to bring the home to move-in ready condition still costs more than the same floor plans on the resale market. To date 23 resale and spec homes have been sold in Toscana this year with prices ranging from $999,000 to $5,000,000. Of the 23 homes sold, 16 were the Amalfi models. With the largest number of homes over one million selling between one and two million, this confirms the greater demand for this market segment. The average sale price of homes for 2014 year to date is $1,880,576, up from $1,780,777 last year and $1,771,672 in 2012. This should have a positive effect on the value of the homes for resale as time goes by and values of all homes in Toscana should continue to rise.
If you are considering selling your home, I would love the opportunity to meet with you and present you with a comprehensive market analysis and the advantages of hiring a real estate professional who drives the success of her business through an extensive marketing program that reaches the highest number of potential buyers whether local, regional, nationally or internationally. Knowledge of the luxury market in Toscana and in other high end golf communities, gives my clients a distinct advantage for getting the best price possible whether you are a buyer or seller.
As season approaches, I look forward to another great year in the desert. Again, if you have any questions or concerns, call me. It will always remain confidential. I look forward to hearing from you.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
License: CalBRE #01364828