Indian Ridge Country Club 2018 3rd Quarter Report
*CLICK HERE to view my entire 2018 3rd Quarter Report including STATISTICAL REPORTS, or view the report by clicking “View PDF Document” located to the right of this page under my photo.
The statistics for the 3rd Quarter housing industry report are compiled directly from the MLS and numerous articles from leading real estate authorities such as California Association of Realtors, Palm Springs Regional Association of Realtors and the California Desert Housing Market Report. We create and review this data, compile the attached reports and then analyze the raw numbers comparing quarter to quarter and year over year to give you the most accurate information about the desert real estate market.
In the October 7, 2018 issue of the Seattle Times, it presented how different the real estate market is in 2018 compared to 2008. Nationally, ten million people lost their home to foreclosure. There are 5.2 million homes where their loan amount is 25% higher than the current home value. Two-thirds of those who lost their home to short sales or foreclosure have not purchased another home. To get an idea of how far we have come from the lowest point in the real estate market, U.S. home prices have increased 48% from its lowest point. In 2004 homeownership was at 69.2%. It dipped to its lowest point of 62.9% in the 2nd quarter of 2016 and has climbed up to 65.3% in 2018. In the boom era people with credit scores could get a loan. Today, people with credit scores under 620 more than likely will not qualify for a loan.
Everyone has learned from the real estate trauma. The lenders are no longer offering the programs that were available during the boom era, there are greater lending controls, and buyers are far more conservative in their thinking before purchasing a home. Lack of supply should drive up prices – that would be considered the norm. However, recent history of an extremely devastating market has brought caution to both buyers and sellers. Today, 90% of the renters want to purchase a home but move more slowly due to their changing lifestyle such as having children later in life, having a more difficult time saving money for a down payment and marrying later in life. The appreciation of home values will continue to be slower than the supply should demand. We have a much more cautious group of buyers and lenders today.
According to Realtor.com, California’s housing market has been the best performing with the hottest markets being San Francisco, Sacramento, Vallejo, Stockton and Santa Cruz. The economy is expected to continue growing with the housing demand remaining strong. The California median home price is forecasted to increase 4.2% to $561,000 in 2018. With low inventory being the new norm for the past few years, experts are predicting that we will continue to see competition for homes that should ultimately drive up prices and lead to lower affordability.
Home sales in the desert were down slightly in the third quarter of 2018 compared to a year ago. Palm Desert North and South experienced the highest increase in home sales at 33.9% and 20.7% respectively. Palm Desert East, where Indian Ridge is located, had a 10.9% drop in sales although the drop is not attributed to Indian Ridge sales as you will note on the Country Club Home Sales Price Change and Appreciation spreadsheet. Palm Valley average home sales prices were down 2.5% compared to 2017 and the current number of homes sold is at 62% of all homes sold in 2017. Another community, The Lakes, shows a 3% decrease in their average home sales price, but their total sales to date is 88% of last year’s sales.
According to the Million Dollar Luxury Home Market report, there has been an increase by approximately 53% in luxury homes sales since 2012. Palm Springs and six of the seven high-end golf course communities such as Bighorn, Tradition, and Andalusia show greater sales this year with all but The Reserve already past their 2017 total sales. The Reserve stands currently at 45% of all total sales in 2017. Average sales prices have not, however, appreciated in all of these country clubs.
The October Valley Housing report indicates that inventory throughout the Coachella Valley remains low with 2,780 homes on the market. If we look back at October 2017, total units on market was 3,241. Historically when inventory is low, prices tend to rise due to supply and demand.
The 3rd quarter depicted a very stable market in the Coachella Valley. When comparing the past two summers, the difference in units sold was 862 this year compared to 870 sold same time last year. La Quinta, Palm Springs and Rancho Mirage all ended with a lower number of recorded sales this quarter compared to last year’s third quarter. Indian Wells and Palm Desert showed slight increases. As referenced on the Coachella Valley Total Home Sales Evaluation report, homes selling for less than $500,000 continue to drop as we see appreciation in home values and fewer homes available in that price point. Taking a further look, we see that detached home sales were down 3%, but attached home sales were up by 3% as buyers are still looking for homes closer to that $500,000 price point.
In the attached report, Country Club Home Sales, 16 out of the 19 clubs we track are on course to surpass the total units sold for 2017. You will also see clubs like Morningside and Mountain View have already achieved this goal with many not far behind. Indian Wells Country Club has a 39.2% increase in the average sales price from 2017, but they are only at 68% of the homes sold in 2017. This indicates that while their prices are going up, they are not selling quite as many homes. Additionally, you’ll notice Rancho La Quinta is down 5.3% in average home price as well as only at 64% of total homes sold compared to 2017.
In our great community of Indian Ridge, by the end of the 3rd quarter we had 45 homes on the market. Not since 2005-2007 have we seen inventory lower than this. At that time there were months when less than 20 homes were on the market and homes were selling before they went active on the market. We expected our current low inventory to drive up sales prices, but that hasn’t happened. Homes sold in 2017 and 2018 sales have been strong in Indian Ridge with 66 homes sold to the end of the 3rd quarter; 35 in the HOA and 31 in the PUD. Last year during the same time frame, a total of 58 homes sold; 26 in the HOA and 32 in the PUD. This is an increase of 13.8% more homes sold. If we compare 3rd quarter 2017 vs 3rd quarter 2018, the number of homes sold in the HOA have doubled. This normal summer increase in Acacia sales more than likely contributed to the average home price being lower overall in Indian Ridge. We expect the average sales price to increase as more home sales occur in the PUD this coming season. We have received many phone calls with residents considering selling their home this year so we anticipate we will have 65 to 70 homes on the market this season.
As we have mentioned in previous reports, part of the decrease in average home price and price per square foot can be attributed to those homes that have not been upgraded or remodeled. We are seeing buyers willing to pay top dollar for homes that have been recently remodeled and upgraded. Buyers are typically offering lower than average purchase prices on outdated homes. As long as sellers are willing to drop their prices, the sold comps will keep the home values down in our community. The average days on market in Indian Ridge is 138 days. There are only two reasons that a home sits on the market for longer than the average days on market: Price is too high compared to like properties; OR the home needs too much work and the buyers are not willing to add those costs onto the purchase price of the home.
The number of homes sold in Indian Ridge year to date is 67 homes with nine homes currently in escrow. Your On-Site Sales team, Diane Williams and Associates, represent 52% of these buyers and sellers.
We are beginning our 4th year as the on-site sales team. This year was truly a banner year for us and we will have paid over three times more to the club than we did in our first two years. We are thrilled to be contributing to the club’s bottom line and helping to keep members costs down. We are constantly striving to surpass our previous year’s numbers and look forward to what we can do for Indian Ridge and its members and residents this coming year.
As the top selling agents in Indian Ridge, we go above and beyond in servicing our clients. If you are considering selling your home, we would love the opportunity to meet with you to provide a market analysis. Thank you for allowing us the opportunity to contribute to this great community. We look forward to working with you this season.
Diane R. Baxter, Associate Broker/Executive Luxury Director
Diane Williams Team ~ Allison Renz, Heather Wong, Terrie Pena, Frank Montiforte, Kristeen Kidd, JoAnn Carlson, and Laura Flannery