Toscana CC 2015 2nd 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 real estate market in the desert remains sluggish with approximately 1% fewer homes sold in the first two quarters of 2015 over the same time frame in 2014. Home sales under $500,000 saw a slight increase in percentage of the total homes sold while homes over $500,000 were down slightly and the million dollar plus homes sold was relatively unchanged.
Currently there are 3,937 homes on the market in the desert. This does not include those homes that are available but have been removed from the Multiple Listing Service for the summer. In Toscana there are 9 home actively listed for sale with one home in escrow. There have been twenty resale homes sold this year to date, with two of these builder spec homes. The average price per square foot for the non-custom home sales was $422 per square foot. The average sales price excluding the custom home sold was $1,561,947 with an average square footage of 3701 for non-custom homes.
Four of the seven luxury golf course communities we track (Country Club Home Sales Price Change and Appreciation Report attached) show an increase in average price per square foot of the homes sold. Three of the country clubs in this category show a drop in average home sales price that may be a result of the kinds of homes sold rather than the value of the homes in the community dropping. Andalusia and Toscana are still new home developments where new homes are selling for more than the resale homes. Andalusia has seen a rise in home value yet sold fewer homes in the first two quarters of 2015 than in the same time frame in 2014. Toscana has sold about the same number of homes with a drop in value. Toscana’s new construction homes have been typically selling for about 20% more than the homes on the resale market.
According to the "State of the Nation's Housing 2015,” a study done by Harvard University, the baby boomers (born between 1946 to 1964) continue to support the home sale market at a disproportionate rate. Millennials (those born between 1984 to 2004) are under performing from what would be expected with many carrying higher debt, insufficient cash for down payments and lower incomes. The X Generation (those born between 1965 to 1984), were more affected by the down turn of the market in the mid to late 2000's with many either losing most of their equity in their home or losing their home to a short sale or foreclosure. As a result, they are not yet eligible to get a loan or do not have the down payment required to qualify for a loan. Typically these would be move-up buyers.
The Consumer Financial Protection Board (CFPB) issued a proposed amendment that was to go into effect August 1st. It has been delayed until October 3, 2015. Under this rule called the TILA-RESPA Integrated Disclosure rule, more complex mortgage disclosure forms, timetables and compliance apparatus for lenders will be required. The new forms are the Loan Estimate and Closing Disclosure. The reason for these added forms is to make sure lenders are providing more easily understood terms and costs for the loan. Once implemented, the changes associated with the new loan paperwork plus the changes associated with the loan process are likely to drive delays in escrow closings, at least initially, as the learning curve and familiarity with the new rules ripple through the lending industry.
Economists have been predicting the Feds will be raising interest rates for the past few years with nothing happening. However, now the increase seems to be closer as interest rates under 4% for a fixed loan appear to be a thing of the past. Interest rates are expected to rise before the year is out.
The weaker Canadian dollars has reduced the number of Canadian buyers in the desert. Typically the majority of these buyers are looking for homes between $250,000 and $500,000. With the projected increase in home values and the lack of inventory for this price range of homes, the Canadian buyers may want to reconsider their decision of backing off the buying of their desert home. As inventory of this price range of homes continues to shrink, the options may require them to pay more for the same home, settle for less or take buying a home in the resort like communities off their bucket list. The Royal Bank of Canada provides loans to Canadians purchasing a home in the U.S. They use the borrower’s Canadian credit history which makes getting a loan much easier. This gives the Canadian buyer leverage that does not pull cash out when their dollar is low and provides them the opportunity to leverage their investment.
The California housing market continues to improve as shown by the increase in pending sales that were up 12.1% from May of 2014 in-spite of the shortage of inventory, the drop in the number of distressed sales such as REO's and Short Sales, and fewer homes at the lower price points on the market. So it appears the market is doing well in spite of these three conditions. Currently 92.6% of the re-sales are equity sales leaving only 7.4% REO and Short Sales, down from over 11 percent a year ago.
As of May this year, the median sales price of a home in California was $485,830, the highest since November of 2007. The San Francisco Bay Area sells for about 107.3% of the list price. Most homes are selling for about 93% of the list price. Here in the desert, the average home sale prices run about 95% of the list price. It makes a difference here in the desert when a home has been properly priced, is nicely upgraded and where there is not an over-abundance of similar homes available on the market.
Only five of the nineteen country clubs I track have sold more homes in the first two quarters of this year compared to a year ago. The increase in number of sales appears to have no correlation to the price per square foot. There are ten golf communities that have experienced an increase in price per square foot from a year ago but they are not necessarily the same communities that have experienced more home sales in the first two quarters of 2015 over the same time frame in 2014.
If you would like a free comprehensive analysis of your home we would be happy to meet with you confidentially. Our success is a result of a full marketing program that includes open houses, web-based and print media marketing programs along with a reputation where we are known for our integrity, knowledge and ability to negotiate to get homes sold.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
License: CalBRE #01364828