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Toscana CC 2015 Annual Report

January, 2016

Dear Toscana Resident:

*To view my entire Quarterly Report, please select “View PDF Document” located to the right of this page under my photo.

Another year is over and we are now into an election year. Which party will win the presidential election? What will be happening in the stock market? Where should we put our money? Is this the right time to buy? Why hasn’t my home sold? There are so many varying opinions, it is difficult to determine how the real estate market will react in 2016 as a result of all these concerns. Some experts say we don’t have enough inventory. Some say the new TRID lending regulations are causing delays. Home values have appreciated over the past few years resulting in buyer affordability dropping significantly. While sales have slowed down, prices in many areas have continued to appreciate and the market remains on a slow but steady pace to recovery. This is actually what we considered normal before the big bubble in the real estate market from 2004 to 2006.

Nationally, home prices are about 12% below the all time at the peak of the market in 2006, plus we are up 30% from the lowest period in the real estate market in 2012. In some areas home prices are at or above the pre-recession peak while other areas still have a ways to go in recovering the peak values of 2006. It is estimated that home values will increase 5% in 2016.

According to “Market Watch”, this neutral to slow growing real estate market, in order to recover at a faster pace requires a wage growth from the current 2% to 3.5% and an inflation moving off zero towards 2% plus lending programs making it easier for consumers to get a loan.

California home sales were off 1.6% in November from the previous year and down 8.4% from October showing a big decline from October to November. This is the first time in eight months where total sales have fallen below 400,000 which could be a result of the 6.8% increase in home values or a delay in closings due to the new lending regulations that went into effect October 3rd. The average selling price for a home in California this year was $235,000 up from $230,000 in 2014. Inventory of homes on the market vary depending upon the location of the home within the state. The bay area remains a strong seller’s market with an average price per square foot of $795. The average list to sales price for the state is 98.1% up from 97.4% a year ago.

The desert real estate market overall was down 30% in sales between October 1, 2014 and September 30, 2015. Homes selling under $500,000 represented 81% of the market. Homes between $500,000 and $749,999 were 10%; homes between $750,000 and One Million represented 4% of the market and homes over One Million were 5% of the market. The average sales price for this time period dropped 3.9% from the preceding year.

The City of Indian Wells (zip codes 92210) experienced a 4.0% drop in average sales price during October 1, 2014 to September 30, 2015 from the same time frame the preceding year. A total of 232 homes sold with an average sales price of $903,204 and average price per square foot of $275. The average list to sale price was 93.91%. Of the 232 homes sold, 88 were homes selling for under $500,000; 59 homes sold between $500,000 and $749,999; 20 homes sold between $750,000 and One Million with 65 homes selling for over One Million. This year will be fairly competitive. Price or upgrades will matter this year for those homes on the market.

In 2015, 27 resale homes sold in Toscana with average price per square foot of $425 and an average sales price of $1,663,107 and at 97.24% of list to sales price. The list to sales price moved up from 92.16% in 2014. The total sales volume for resale homes was $46,000,000 leaving the 30 new home sales totaling approximately $51,000,000 and an average sales price of $1,700,000.

A review of the nineteen country clubs I track, show that ten experienced a drop in the average sales price from 2014. The golf course communities showing the biggest decline in sales were the Lakes, the Springs, the Reserve and the Tradition. Those communities with highest number of sales in 2015 were Indian Wells CC, Morningside, Andalusia and the Hideaway. Mountain View and Mission Hills sold the same number of homes.

The luxury market of homes selling for over One Million remains unchanged from 2014. Since the third quarter of 2015, we have seen an increase of 70% more homes over One Million come on the market for a total of 762 million dollar plus homes currently listed for sale in the Multiple Listing Service.

Recent sales have become more complex as many of the homes are not appraising and buyers aren’t willing to pay more and sellers won’t sell for less. One reason for this growing problem is appraisers are required to use the tax records for their appraisals, not the Multiple Listing Service. Many buyers who purchase a home are taking a large percentage off the purchase price as value for furnishings in order to reduce their real estate taxes. In some cases it can affect the sale price up to $150,000 to $200,000 for homes selling over one million. This lower number is recorded as the sales price in the tax records and can lower the appraised value of the home in escrow. This artificially lowers the home values from the true market price of a home and homes within the community.

We do anticipate an active but competitive year in the desert. As I stated earlier, it will either be price driven or upgrade driven depending upon the buyer. Fewer buyers want to remodel or upgrade so it will be price competitive for these properties. However, with the increase in home values, it is still a good time for sellers to sell and a good investment for buyers.

Over the past 13 years, I have been at the top of the industry and have been the top agent for Bennion Deville for the past 12 years. We sold over $54,000,000 in home sales in 2015 – done in a market that experienced fewer sales in a slow growing market. These results happen when you have a team of professionals who are readily available to show homes and have the ability to get homes into escrow.

Kristi Kramer has been on my team for over two years and is working with me to provide excellent service to our buyers and sellers in Toscana. She has over 20 years of experience as a real estate professional. She specializes in the luxury home market and is a professional stager. Her ability to stage a home to make it more marketable has proven time and again to make the difference in getting the home sold. Recently we met with several sellers who had their home listed with other brokerage firms. We staged the homes and put them on the market and received many more showings and offers on the homes. With the new home construction competing with the resales home in Toscana, this expertise is extremely valuable.

We are dedicated to representing the best interests the sellers of resale homes. If you would like a free market analysis of your home we are happy to meet with you.

Sincerely,

Diane R. Williams

Associate Broker/Executive Luxury Director

Bennion Deville Homes

Indian Ridge On-Site Sales Office and Luxury Homes & Estates Division

CalBRE #10364828