Toscana CC 2014 2nd Quarter Report
Dear Toscana Resident:
*To view my entire Quarterly Report, please select "View PDF Document" located to the right of this page under my photo.
Each quarter as I begin to collect the real estate stats for the Coachella Valley and research for articles and reports about the current residential market conditions and how they compare to previous quarters and years, I highlight the facts and information I feel are important and interesting. When I first began writing these reports 42 quarters ago, I tried to limit the cover letter to one page. As we entered into a trend in real estate that I truly believe most people never expected would fall to the depths or last as long as it did, more and more information seemed important and necessary to try to let the buyers and sellers know what was truly happening. The media would tend to generalize whereas the market trends in specific areas or communities did not fall in line with the generalized information. It was imperative to know what was happening on the local level in order to accurately analyze the community market trends and the implications for the seller or buyer. When the market was selling fast and furious in the mid 2000’s, and homes were selling almost before they become active, there wasn’t much to say other than ‘go for it.‘ Then in the spring of 2007, it became important for me to know in more depth what the buyer’s goals were for their purchase. For some, if the real estate market dropped and they would not be able to make payments without a guaranteed tenant, I recommended they wait to purchase as I thought they had missed the market. How true that was as we saw the market continue to decline and many losing their home to short sales or foreclosures. Today in the Coachella Valley we are down to 11% distressed sales. This is a drop from 22% in 2013.
In the market today we see a tendency of buyers who want to purchase homes that are newly upgraded and remodeled with today’s design trends. We see fewer buyers willing to purchase homes knowing they will need to invest in upgrades. This leaves some tremendous buys available for the buyer who is willing to put their own personality into the home that requires some work. With each home in need of upgrades a buyer lets go by, the person buying that home is the one reaping the gains that continue to rise every month.
When the buyer upgrades the home, the price they can sell their home for is relative to the quality of enhancements. A simple example is a open floor plan in Indian Ridge having 1,903 square feet that two years ago sold for about an average of $350,000. Today, those same homes are selling for an average $525,000. That is a major difference in price in a short period of time. These price increases are tied to the quality of the remodel and upgrade activities taken on by the buyers who are now reaping the rewards.
Today it is very difficult to find a home under $500,000 in a great location that is move in ready. As these homes increase in value the gap is narrowed between them and the million dollar plus homes. Currently homes between $500,000 to $800,000 are not selling as fast as they should. Some of these homes require upgrades and at these prices they can be a really good buy. The same applies to homes over $1 million that sold for so much more seven years ago. So as a buyer, it is extremely important to do your research and work with an agent who knows the market and the history of the industry in the area where you are looking to purchase. Not every market is improving at the same rate and each community may show substantially different trends.
Today’s buyer relies on social media far more often to learn about the buying process. Now about 75% of the buyers are using social media, up from 52% in 2011. About 91% of the buyers are finding properties that appeal to them in areas that meet their wants and needs using mobile devices. This internet research helps them identify comparable prices, homes and amenities. Today 81% of the buyers believe prices will increase in five years and 60% believe they will increase in one year. This is a big change from 2009 when 35 % believed prices would rise in five years and only 8% believed they would rise within a year.
Equity sales (non-distressed sales) now represents 89.2% of all sales in the Coachella Valley compared to only 78% of the sales in May of 2013. This change is clear evidence that buyers have to pay more this year to purchase a home they could have bought for less a year ago. Only 9% of the single family homes on the market in the Coachella Valley are distressed sales this year and only 6% of condo sales whether attached or detached are distressed sales.
The number of home sales for the valley for the second quarter was down 17% from a year ago. The primary reasons are lack of inventory, stricter guidelines for loan qualifications and dropping affordability for some buyers. In the second quarter of 2013, 20.5% of the homes sold were over $500,000. This year that percentage is 23.4%. Homes sold over $1 million represented 5.6% of the resales for the second quarter in 2013. Currently 6.5% of the homes sold were over $1 million.
There were 77 homes that sold over $2 million since the first of the year. In the 2nd quarter 49 of these homes sold with a low of $2,025,000 in Indian Ridge Country Club and a high of $8,900,000 in Bighorn. Ninety percent of the homes selling for over $2 million in the second quarter were in country clubs. Tradition led with ten, Bighorn with eight, Vintage and Hideaway with seven each, Toscana with four, Indian Ridge with three, The Quarry with two and Ironwood with one.
Of the 49 homes selling for more than two million this past quarter, seven sales sold between $3 and $ 4 million; five sold between $4 and $5 million; one sold in the $5 million range; two sold between $5 sf $6 million; one sold in the $7 million range and one sold for more than $8 million. Included with this report is the Million Dollar plus home sales comparison which compares million dollar sales for 2013 and 2014.
A comparison of the 21 country clubs I track every quarter shows that 16 of the clubs have seen increases in sales prices since 2013 with 6 seeing a drop in prices between the second quarter of 2013 and 2014. All clubs have sold 59% or greater of the total homes sold in 2013 except for Andalusia. As indicated earlier in this report, these specific details are not found on the internet or in the general real estate information. In order for the seller to be able to accurately price their home for sale or for a buyer to know where they can afford to buy or which clubs meet their financial and personal needs, it is important to hire an agent who tracks these stats on a regular basis.
The Quarterly Report for Toscana shows the average price for resale homes increased 28.1% from a year ago and up 6% from the end of 2012. In the first two quarters of this year a total of 20 homes sold compared to 29 for all of 2013 so the sales are brisk in Toscana. The overall average price for a resale or spec home sale in the 2nd Quarter of 2014 is $1,876,350 up from $1,425,278 compared the second quarter of 2013.
Since I have been in the business, my goal has been to provide the best possible service, return calls promptly and continue to work for the seller (or buyer’s) best interests. As a result I rose to the top of the industry in my second year in the business and continue to grow my business every year. I have added wonderful Real Estate Professionals to my team making it possible for us to provide better and better service. If you are thinking of selling your home, we would appreciate the opportunity to meet with you to show you what we offer to our clients that makes us special.
Feel free to call me with any questions you have with regards to the market. I am happy to meet with you on a confidential basis to provide a true market analysis of your home.
Diane R. Williams
Associate Broker/Executive Premier Director
Windermere Real Estate
License: CalBRE #01364828