Toscana CC 2016 1st Quarter Report
*To view my entire Quarterly Report including STATISTICAL REPORTS, select “View PDF Document” located to the right of this page under my photo.
Throughout the years of researching and writing these quarterly reports, the market trends have sometimes been easier to evaluate than other quarters. Until I collect the stats for this report, my opinion of what is happening in the desert market based on what is seen in media reports can be different than what I see by just looking at the raw data for our Coachella Valley market. This year I decided to go back and review what the market has done in the state and locally over a longer time frame. I thought it might be interesting and educational to take a step back in the history of real estate to see where we were and where we are headed.
In 1993, the median sales price in California was $188,240. By the year 2000 the prices had risen to $241,350. In 2010 it reached $305,010. (The highest average was in 2007 when it reached $560,270.) Then in 2014 the median price was $447,010. Had we not experienced the crazy market from 2004 to 2007, the actual increase would be in a straight line showing the normal growth in home values. Bottom line, we need to recognize that our market over recent years and today should be looked at as a normal market.
The media reports indicate the desert has lost the Canadian buyers, that baby boomers are not selling and coming to the desert, the remote (second home) buyers are down and the demand for homes in golf course communities is declining. We will need to watch to see how these projections materialize over time.
Here is what I see: We witnessed a decline in the number of home sales in 2014 and we are continuing to see the same market as we have for the past three years. We are seeing remote buyers coming to the desert looking to either purchase or lease a home with the overall anticipation of living here in the desert. However, we re not seeing a growth in the number of those buyers. Additionally a higher number of sellers are putting their desert home on the market. Since there is no increase in the number of buyers compared to a year ago and even the preceding year, we are seeing higher inventories leaving the buyers more choices. In fact, throughout the desert, the number of homes sold in the first quarter of this year is equal to the number sold in the first quarter of 2015 and not far off the number sold in the first quarter of 2014 regardless of whether the homes sold were under $500,000 or over $ 1 million.
For the past three years, the number of sales in the first quarter here in the desert has seemed sluggish compared to prior years and professionals in the industry continue to scratch their head and wonder where have all the buyers gone. The desert market is supposed to kick off right after the Bob Hope Classic, now referred to as the Humana. Now buyers are waiting until the end of the 1st quarter to submit offers and the season for selling is underway for the next six months. For the past two years approximately 24% of the homes sold for the entire year were in the first quarter with about 31% of the homes selling in the second quarter and 23% in the third quarter (54% of homes sold for the year occur in the 2nd and 3rd quarters) and about 22% of the homes are selling in the fourth quarter. Based on the buyer interest now, which is very brisk, the market should continue on the same path as we have seen over the past two years. Sellers need to recognize our prime selling season is starting later and continuing further into the year. The current market shows no increase in buyers, a indicated earlier, but an increase in inventory which does affect home prices depending upon the upgrades in the home.
It became a Buyers market a little over a year ago and with the increase in homes available for buyers to consider. This has given buyers a wonderful opportunity to purchase upgraded homes that are move in ready at a good price or purchase homes that are more in original condition with need of some updating for a really great price. Buyers who see the benefit to them in today’s market and purchase a home now rather than waiting have an excellent opportunity to experience a greater upside over time.
Perhaps one reason for a reduction in the number of sales in certain areas here in the desert is the buyer and seller see the market differently for each community. Buyers write low-ball offers making it difficult for sellers to take the offer seriously so nothing happens or the negotiations start on a negative note and it becomes difficult to reach a price more acceptable to both buyer and seller. Sellers need to realize that buyers today are more cautious and do not want to leave money on the table if possible, so they are starting with lower offers. A low offer does not necessarily indicate that the buyer is not sincere, just more cautious.
Of the 19 country clubs I track, (see the Country Club Home Sales Price Change and Appreciation report included in this letter) home sales in nine of the communities were above the 24% average percentage of total yearly sales that historically occur in the first quarter compared to last year’s sales. Five communities are on track to sell the same number of homes this year while the remaining five are running behind last year. All five that are lagging behind are the higher end golf communities. Eleven of the golf course communities show an increase in average sales price compared to the end of the 4th quarter of 2015 with eight selling for less in the first quarter than at the end of 2015. Some of the stats for sales in these communities may not truly reflect the actual value change due to the lower number of homes sold within that golf course community.
Sales in Toscana have been extremely brisk lately as we see the market really kicking off late again this year. During the first quarter, six homes sold with another six in escrow. Two were spec homes. I am happy to report that of the 10 homes sold or pending in this first quarter, we represented three sellers and one buyer for a 40% market share of the sales. Last year 10 homes sold in the first quarter with three in escrow so about the same number of homes sold both this year and same time last year. Of the 13 homes sold last year, two were spec homes, the remaining were re-sale homes.
Seven new homes have sold and there are 27 homes under construction. Looking at the number of sales in the other high-end golf communities, Toscana is doing exceptionally well.
The average sold price in the first quarter is $1,756,667, or $453 per square foot and at 96.21% of list to sale price. The average days on market are 94. Compared to the first quarter of 2015, this is up from $1,674,500, $420 per square foot, 95.43% list to sale price and 182 days on market.
There are currently twenty-four homes on the market. The inventory or all high-end golf course communities is up from a year ago.
If you are interested in learning the market value of your home or are interested in what we do to get homes sold, please call us for an appointment.
Diane R. Williams
Associate Broker/Executive Luxury Director
Bennion Deville Indian Wells Luxury Homes & Estates Division