Toscana CC 2016 Annual Report
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We want to first wish you all a very Happy New Year. There is good news. We experienced a busier summer and fall than in years past and December was extremely busy compared to all my years in the industry.
When writing the annual report on the real estate market it is important to determine if it’s just our business that is growing or if the market overall and in specific areas are also getting busier? This requires more research in order to see the true market trends. I have learned over the years that what is happening in one city in the desert doesn’t necessarily transcend to another and the same for each golf course community.
In Riverside County, single family home sales were up 32.5% in November compared to a year ago and up 6.8% in median sales price. Inventory dropped 29.7% and days on market dropped to 47 days, down 16.1%. The City of Palm Springs is only 7.9% off its high in 2006, while the other eight cities remain 21.4% to 43.6% off their all-time high. With consumer confidence in the market growing and the rise in sales and the decline in inventory, prices will rise as we proceed through 2017. Any predictions after 2017 is predicated on what Trump and his staff can accomplish in his first year in office.
Nationally, home sales increased for the third consecutive month in November, the highest pace in almost 10 years. Inventories dropped 9.3% below last year and median home prices were up 6.8%. New home construction is expected to grow in 2017 as a result of a “significant boost in confidence” after the election results. Now is the time to buy. The National Association of Realtors is predicting a hotter market in 2017 which should drive up prices so now is the time for the buyer to purchase a home. Buyer’s purchase power is expecting to wain as we move farther into 2017. According to S & P CoreLogic, the average home price in September was just 0.1% over the higher prices of July 2006. Adjusting for inflation, homes need to gain another 16% to actually recover from the loss in value since the great depression.
Currently there are 4,704 homes on the market in the Coachella Valley, down about 7% from a year ago. The Million-dollar luxury home market chart included in this report shows inventory for homes over one million still high. It also shows that sales are up in the luxury market, however, prices will more than likely remain soft as a result of the number of homes still available for buyer consideration. The good news is there were 10 homes that sold for over $7 million in 2016 compared to one home in 2015. Homes selling over $1 million saw an increase in sales of 13.1% in the last half of 2016 compared to previous years and with sales in the first half of the year holding fairly steady.
In 2016, investors returned to the desert purchasing many homes throughout the valley after staying away for about two years. They primarily were looking for homes not in golf course communities where they can flip or lease short term for high prices during the special international events here is the desert. Cities are tracking short term leases to charge Landlords occupancy taxes. Palm Springs is trying to limit the number of lease transactions per property and possibly limit the number of homes an investor can lease out in the course of a year.
While the increase in mortgage interest rates are expected to rise this year, this should only minimally affect the second home buyer market here in the desert. Freddie Mac has increased the cap on conventional loans in the desert from $417,000 to $424,100. This cap is lower than coastal areas so when purchasing a home in the desert it is important to know the cap for conventional loans varies by area. Buyer affordability in California for single family homes is at 31% while condo/townhome affordability is at 40%.
Thirteen of the nineteen country clubs sold the same or more homes in 2016 compared to 2015. Only four of the country clubs showed an increase in sales price. So, while urban areas were hot markets, the resort environments that are second or third homes for many buyers, was an option, not a requirement. The increase in sales the last half of the year and the growing economy and anticipation with the regime change, will likely spur a better market in the resort areas.
In Toscana Country Club, 18 resale homes sold in 2016, plus 6 spec homes for a total of 24 built homes sold. There were 14 newly constructed homes sold and currently there are 20 homes under construction. I am pleased to announce that Kristi and I represented nearly 33% of the resale homes sold in Toscana last year due to Kristi’s excellent service and outstanding ability to stage the homes to sell. Our strong relationships with other Realtors along with our affiliation with Bennion Deville Homes who have sold more than four times our nearest competing brokerage gives us a distinct advantage in this high-end market.
To date we have sold $50 million in sales in 2016/2017 and are the leading real estate professionals serving Indian Wells.
If you would like a complementary market analysis of your home, we are happy to meet with you.
Diane R. Williams, Associate Broker/Executive Luxury Director
Bennion Deville Homes Indian Wells Luxury Home Division