Indian Ridge CC 2014 3rd Quarter Report
*To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.
Dear Indian Ridge Resident:
The third quarter of 2014 is over and this has been the biggest selling summer for me ever. The real estate market had a slow start this year, but by the end of the first quarter we had many more showings, were putting homes into escrow, and the million dollar luxury homes began to move. We really didn't experience a slow down this summer until the later part of September. Many buyers, in our market today continue to search for the “right” property and are willing to wait longer before purchasing a home. However, approximately 48% of the buyers who purchased a home this year, felt they settled for a home that was less than what they expected to buy. Some of the reasons for the purchase of a home that didn’t completely meet their expectations were based on price, the feeling they were getting great value, and they wanted to complete a purchase before rising prices and interest rates would eliminate potential homes that currently fell within their price point.
Once again, after more than 5 years, we are seeing new home construction with model homes to see. Many of these new developments in the desert are offering more modern décor, green energy living reducing the overall utility costs and a more contemporary design. These new homes are in residential areas where age specific activities are readily available…dining, tennis, hiking, biking, health and lifestyle facilities and are less expensive to purchase and maintain. New home sales were up 33% this past August over a year ago and up 18% from July.
The price for new homes are increasing faster than resale homes and it is expected this trend will continue for months to come. So the rising costs for new homes will drive the market price more than Multiple Listing Services. For resale homes, the new home availability does place a premium on quality upgrades and remodels. Bottom line, buyers like and want the feeling of “new”.
So if you are considering selling your home, what do you need to do to get your home in the best possible position to sell? Over the past several years, I have recommended more of my Sellers stage their home by de-cluttering and doing the repairs that are visibly seen by the buyer. Painting, repairing flooring, replacing or cleaning the carpet and staging the home makes a home more marketable. Just by de-cluttering, lightening and brightening and staging the home that could cost as low as $1,000 can net a seller over $5,000 at close of escrow. The Real Estate Staging Association in their recent report said these staged homes reduced the average days on market from 143 to an average of 40 days. The market that remains soft is the $500,000 to $1,000,000 homes who, on average, are on the market 148 days. When staged, they dropped to 43 days. While all areas and communities are different nationally, this stresses the importance of getting your home in market condition to get the best possible price in the shortest amount of time. Keep in mind we are now competing with new home construction once again so keeping your home current is extremely important in order to sell more quickly and for a higher price. Buyers love the look and feel of Model Homes, so making your home resemble a Model Home pays dividends.
The golf club communities throughout the country continue to compete for a smaller audience. Since 2002 the number of golfers are down 24%. In 2013 alone, the game lost 1.1 million golfers. Golf sales for equipment are affecting the major sporting stores, and their prediction is we are not at the bottom yet. The number of rounds of golf are way down and people under 35 years of age are leaving the game.
Golf course communities continue to face greater challenges and it isn't going to get easier as the costs to operate and maintain golf course communities continue to rise, pricing many potential members out of the market.
While all this feels like doom and gloom, the good news is the areas where the country has experienced greater pending sales has been in the south at 4.2% increase and in the west with a 4% increase.
The good news for the Coachella Valley is the million dollar luxury home market in California has started to improve rising to its highest level in the last seven years. As stated in my last quarterly report, million dollar sales were up 60.4% in the second quarter over the first quarter of this year. This is the highest increase in million dollar home sales since the second quarter of 2007. While million dollar home sales are up 9.1% year to date, overall home sales were down 7.4% which shows the increase in buyers willing to pay more for the home they are purchasing than in the past. With the increase in sales of luxury homes, and most within a country club, clubs should have experienced an increase in home sales and membership sales this year. These are sophisticated buyers who are typically not as concerned about income, job security, down payments and interest rates but more interested in where to place their substantial assets.
It is interesting to note that the higher the price of the home sold, the more buyers paid cash. For those obtaining a loan, they put down 30% of the purchase price. Jumbo loans ($417,000+ in the Coachella valley) accounted for 32.3% of all loans. Prior to August of 2007, jumbo loans represented 40% of all loans. The lowest point for jumbo loans was 9.3% back in January of 2009.
Absentee buyers made up 23.5% of the buyers in Southern California. The peak in this category was 32.4% back in January of 2013 when investors were aggressively buying the distressed homes.
The percentage of homes sales organized within different price ranges show that the under $500,000 homes have represented approximately 77% of all sales for 2014 with sales over $500,000 at about 23%. The luxury market for homes over one million, as we discussed earlier, continues to show improvement.
Comparing Country Club sales over the past three years, some communities are experiencing greater sales and increasing values while other remain relatively unchanged or less than the previous years. This can be seen on the attached Country Club Sales Price Change and Appreciation Report.
Indian Ridge has done very well with home sales this year. A total of 62 homes sold with 17 homes sold in the 3rd quarter of the year. There were eleven homes in the HOA and 5 in the PUD that sold this quarter with the cost per square foot for each gradually increasing. The jump in the PUD price per square foot from $322 to $381 this quarter is due to the sale of a number of larger homes selling for over two million. During our research this summer by floor plans, there isn’t a big difference between the price for Bougainvillea 1’s and 2’s so we are still seeing a gradual correction in some floor plans with better price increases in others. Two years ago an Acacia 3 was selling for approximately $350,000. Today the average is about $525,000. The increase in price of the smaller homes will ultimately push up the prices for the larger homes as this market continues to improve.
The Country Club Homes Sales Price change page included in this report shows Indian Ridge with an 18.9% price increase over 2013. The PUD with 20.7% due to the homes selling over $2 million. The increase from 2012 to 2013 was 9.4%. The HOA realized a 12.8% increase in price for 2014. In 2013, the HOA had an increase of 13% from 2012.
Comparing our sales to Rancho La Quinta CC, one of our major competitors, shows we are increasing in value at a faster pace. No homes in Rancho La Quinta have sold for over $2 million and their increase in appreciation this year was 10.1%. They have sold 63 homes to date.
Of the 12 country clubs we track that fall just below the more costly high-end country clubs, Indian Ridge, Morningside, Mountain View and Rancho La Quinta have an average sales price of over $800,000. The only country club who is behind in sales this year is Mountain View and the reason may be they were the only club who did not reduce their initiation fees and were viewed as not as good a buy as a result.
Unlike years in the past where we stopped holding homes open for the summer, we continued to market and open our homes every weekend. As a result, it increased our representation of the total sales in Indian Ridge from 44% in the first half of the year to 53% for the homes sold this summer.
If you are considering selling your home, I would love the opportunity to meet with you and present you with a comprehensive market analysis and the advantages of hiring a real estate professional who drives the success of her business through an extensive marketing program that reaches the highest number of potential buyers whether local, regional, nationally or internationally. Knowledge of the market gives my clients a distinct advantage as my ability to negotiate for the best price whether you are a buyer or seller can be seen by my history of sales in Indian Ridge and throughout the desert.
As season approaches, I look forward to another great year in the desert.
Again, if you have any questions or concerns, call me. It will always remain confidential. I look forward to hearing from you.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate Luxury Homes and Estates Division