Toscana Country Club 2017 3rd Quarter Report
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For every quarterly report I have written since 2004, while analyzing current real estate news and statistical data, I look for changes in the market that show the true market conditions here in the desert. In 2014, I saw indicators that things may be turning around only to find out that several quarters later the recovery had slowed and we were still a flat real estate market. While metropolitan areas continued to experience multiple offers well over asking price due to driving factors such as employment and family, properties in the desert remained an option, not a necessity.
As I reflect back to the start of my real estate career in 2003, I was fortunate to be part of a lucrative real estate market we had never seen, allowing me the opportunity to exceed my goals very early into my career. By April of 2007, I began expressing to some clients my concerns about purchasing a second home at the peak of the market and recommended they put buying on hold. Little did I know my advice would prove to be more accurate than any of us could imagine, and that 2009 would be the lowest selling year after such major appreciation from 2004 to 2006. Since then, we have seen a very slow recovery in the desert market.
After reviewing the statistics for this quarter, I believe we have finally made the turn that will lead towards a “seller’s market” here in the Coachella Valley. These changes should be evident between now and the first two quarters of next year. Homes in all price points are seeing an increase in sales and price appreciation, while over the past four years we saw the number of home sales increase with little to no appreciation and in some cases homes selling for less than in previous years. This is the first quarter that I can remember where 16 of the 19 clubs I track will more than likely exceed the number of homes sold last year by larger margins. Already 11 are well over 100% of the total sales compared to last year with three months left in the year. It appears only a few will not meet or exceed their total home sales in 2016. The average sales prices are up in 12 of the 19 golf course communities. Ten of the 19 country clubs sold more homes in the third quarter of this year compared to the same timeline in 2016. The luxury home market of properties over a million dollars continues to improve. These are all signs for an improving real estate market in the desert.
During the months of June through August, according to the Desert Housing Report, Condos (attached homes) realized an 8.4% gain in homes sold and a 6% increase in average price throughout the valley after little gain for the past four years. Single-family homes realized a 4% increase in sales and 6% appreciation after remaining flat over the last four years as well. The average number of homes sold during June through August is up 9.4% compared to a year ago. Inventory in the desert, 3,271, is at its lowest since September of 2014. These are also positive signs that the desert real estate market is improving.
Indian Wells had a 5.7% price appreciation over the past year for single-family homes. Condos realized a 10.1% drop in value. Inventory has dropped from a 9.3% supply down to 6.8 months overall. Homes over $1 Million dropped from a 12.5 months supply to 11 months. Homes sales in Indian Wells for the year were up 35%. Palm Desert and Palm Springs remain the leaders in home sales in the valley again for the past three-month cycle.
Some predict a slow-down in home sales and appreciation this year, but my research indicates to me a turning point and perhaps the best “move up” market we have seen in years. Selling a current home at a price that is maybe less than you want gives you the opportunity to purchase a larger home at a great price with a greater opportunity to get a better return on your investment in the future. Buying a home that is well-priced needing upgrades should be strongly considered, as I believe that is where the greatest opportunity for appreciation lies.
For homeowners who have no desire to move up to a larger or more expensive home, upgrading and adding improvements to their current home will help get their home sold quicker and at a better price farther down the road when they are ready to sell.
In 2016, 24 homes sold in Toscana with six of the homes spec homes built by the builder and sold unfurnished. Currently 21 homes have closed escrow this year with two in escrow, for a total of 23 homes sold year to date with three months of the year remaining. Four of the homes sold year to date were spec homes. The average price for homes sold this year to date is up 18.3%. Currently there are 23 homes on the market for an average list price of $1,939,217. The average sold price is $1,906,853. Average list to sales price is 91.44%. When comparing spec home sales to re-sales, the difference in price was an average of $380,893 – the premium for buying a new home before the normal costs for furnishing the home. Price per square foot for spec homes sold this year averaged $536.66.
According to the Toscana update, of the 39 homes sold, 25 of them were resales. Included in that number were four sales not publicized in the Multiple Listing Service. We were able to partake in one of those transactions, bringing a happy buyer. Since the announcement of the new non-refundable initiation fee of $65,000, sales have been on the rise with 11 homes sold after May 1st. Considering eight homes total sold last year, this has been a well-received change.
For the past few years, buyers felt no sense of urgency to purchase and have not been worried about missing out on a great deal. Last year, one by one, well-priced homes began selling and the buyers sitting on the fence saw homes that once appealed to them sell. The current market consists of buyers still trying to get homes at the lowest price possible while the number of homes selling here in the desert continues to rise and the number of homes available decline. Supply and demand drives the market. We are now in a lower inventory and higher demand market that should lead to higher home values, and as noted earlier, more towards a “seller’s market”.
I have worked hard to build a team that provides excellent service, and to create marketing programs that are truly effective. We continue to evaluate and update each segment of our marketing programs we provide to our clients, making sure we are at the cutting edge of our industry and setting the standards that others in the industry follow to grow their own business. Our #1 goal is customer satisfaction.
Allison Renz, Heather Wong, Terrie Pena and I are available to meet with buyers and sellers to show property and provide property evaluations that help sellers make the right decision about their home. Kristeen Kidd, our office manager, handles and oversees all transactions and manages the office. Laura Flannery designs and coordinates our advertising and marketing (print media, web-based marketing, and social media) with Heather and me. Frank Montiforte represents buyers and sellers from his extensive network as the owner of a high-end clothing store, Mr. Frank’s, in Beverly Hills for many years.
We are happy to meet with residents for a free market analysis and as always it will remain confidential. We look forward to seeing all our winter residents return for the season.
Diane R. Williams
Associate Broker/Executive Luxury Director
Bennion Deville Homes
Indian Ridge On-Site Sales Office & Indian Wells Luxury Homes & Estates Division