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Sales Stats for South La Quinta by Community

Here are some sales figures for all 71 comunities in South La Quinta for the six months ending October 31, 2010. These figures represent all sales including foreclosures, short sales and resales. The first page includes a graph of sales from 1998 through October 2010 as compared to the historical annual 4.5% appreciation rate. You can clearly see the “Bubble: and how we have progressed beyond it. The next page has a graph which shows monthly sales figures for 2009 1nd 2010.

The third and fourth pages show sales information for the 71 communities that make up South La Quinta in our Multiple Listing Service (MLS) sorted by: community Name, Number of Homes Sold, Average Sale Price and Average Price per Square Foot.

Click the link below to view the report.

South LQ Sales 10-31-2010

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September 10 Price Report

Here are the latest sales numbers for all homes sold within the City of La Quinta as well as all Golf Course homes in La Quinta through September 2010.


 City of La Quinta home sales since January 2008 

The blue lines represent 2008 data, the orange lines represent 2009 data and the magenta lines represent 2010 data.
The chart above shows monthly sales of homes within the city of La Quinta*.

As the end of the hot summer months approaches, We see a continuing softening of the La Quinta home sales for September. Sales were lower in September than August and for the second time since June, 2009, lower than the same month a year earlier. Open escrows in September dropped 5.8% which is not terribly surprising during the hot summer months but is an indicator of the usual lazy sales for this time of year. Consumer confidence, which seemed to have steadied in the previous few months has turned into a wait and see attitude leading up to the November Mid-term elections. Prices seem to be stabilizing in the under $1,000,000 market. The above $1,000,000 market has not seen the improvement of the under $1m market but this is likely due to the unavailability of jumbo loans. The general attitude of the people we talk to at open houses is that the market has hit the bottom and that is backed up by current prices versus historical appreciation.



Golf Course home sales in La Quinta 

The sales-volume numbers in the higher-end market (which contains many of the golf properties in the chart above) have fallen off as expected with the arrival of the summer heat. The average price per square foot dropped 11.5% in August over July’s prices BUT it has come back 2% in September.

Overall, we are still seeing positive signs in the market place. There has been an increase in activity since Labor Day and, hopefully, buyers are getting ready for the upcoming season. The mortgage industry is the best it’s ever been for conventional loans but the “jumbo” loans continue to be a stumbling block in the higher end market.

A correction to be made…
Last month I mistakenly interpreted the inventory data to mean that 1,906 units out of the 5,115 Active listings were pending. The 1,906 units were in addition to the 5,115 unit totalling 7,021 active and pending units for sale in the Coachella Valley. That means that only 27% of the total units were were pending.

On September 30, there were 5,233 active listings, 1,825 units in escrow totalling 7058 unit available for sale which makes 25.9% of the total in Escrow.

If buying property is something on your list (especially golf property), why not take advantage of the incredible prices and seller incentives now, when sellers will work with you, instead of in the future, when the demand starts to catch up with the supply? Especially if you’re buying and planning to hold for 5+ years.

Here are some yearly sales figures (units) for the City of La Quinta from 2002:

Year All LQ Golf Course
2002 1,354 259
2003 1,565 652
2004 1,931 813
2005 1,553 657
2006 1,098 491
2007 935 447
2008 1,063 416
2009 1,155 418
2010 YTD 986 422 (Sept)

 

* When looking at “sold” data, you have to remember that the numbers are generated on the date that the sale is recorded with the county but that the decision to buy was made about 45 – 60 days earlier.

Figures are from the Desert Area MLS

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August 2010 Price Report

Here are the latest sales numbers for all homes sold within the City of La Quinta as well as all Golf Course homes in La Quinta through August 2010.

La Quinta home sales since January 2008
City of La Quinta home sales since January 2008

The blue lines represent 2008 data, the orange lines represent 2009 data and the magenta lines represent 2010 data.

The chart above shows monthly sales of homes within the city of La Quinta*.

As is typical of the hot summer months, the La Quinta home sales for August were lower than July and for the first time since June, 2009, lower than the same month a year earlier. Open escrows in August dropped 6% which is not terribly surprising during the hot summer months but is an indicator of the usual lazy sales for the next few months. Consumer confidence, which seemed to have steadied in the previous few months has turned into a wait and see attitude leading up to the November Mid-term elections. Prices seem to be stabilizing in the under $1,000,000 market. The above $1,000,000 market has not seen the improvement of the under $1m market but this is likely due to the unavailability of jumbo loans. The general attitude of the people we talk to at open houses is that the market has hit the bottom and that is backed up by current prices versus historical appreciation.

Golf Course Real Estate slae in La Quinta
Golf Course home sales in La Quinta

The sales-volume numbers in the higher-end market (which contains many of the golf properties in the chart above) have fallen off as expected with the arrival of the summer heat. The average price per square foot has dropped 11.5% over July’s prices.

Overall, we are still seeing positive signs in the market place. People on the street that we talk to believe that prices have bottomed out. The mortgage industry is the best it’s ever been for conventional loans but the “jumbo” loans continue to be a stumbling block in the higher end market. The bottom line is that at the beginning of the downturn in 2006, there were over 10,000 homes available for sale in the Coachella Valley – a real glut.  Currently, that number is down to under 5,115 with 1,906  (37%) of those currently under contract. As the supply dwindles, the market begins to stabilize and people feel more comfortable to get back into the marketplace.

If buying property is something on your list (especially golf property), why not take advantage of the incredible prices and seller incentives now, when sellers will work with you, instead of in the future, when the demand starts to catch up with the supply? Especially if you’re buying and planning to hold for 5+ years.

Here are some yearly sales figures (units) for the City of La Quinta from 2002:

Year All LQ Golf Course
2002 1,354 259
2003 1,565 652
2004 1,931 813
2005 1,553 657
2006 1,098 491
2007 935 447
2008 1,063 416
2009 1,155 418
2010 YTD 914 390 (August)

* When looking at “sold” data, you have to remember that the numbers are generated on the date that the sale is recorded with the county but that the decision to buy was made about 45 – 60 days earlier.

Figures are from the Desert Area MLS

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July 2010 Price Report

Here are the latest sales numbers for all homes sold within the City of La Quinta as well as all Golf Course homes in La Quinta through July 2010.

The blue lines represent 2008 data, the orange lines represent 2009 data and the magenta lines represent 2010 data.

The chart above shows monthly sales of homes within the city of La Quinta*.

The sales for La Quinta in July were lower that June but still higher than sales for the previous 2 July’s. July showed a slight rebound in open escrows over June’s 17% drop from May. It is typical for sales to slow during the summer months but each month in 2010 has seen sales that have surpassed the same months of the previous two years. Consumer confidence seems to have steadied. Prices have not started to rise, but they seem to be stabilizing in the under $1,000,000 market. The above $1,000,000 market has not seen the improvement of the under $1m market but this is likely due to the unavailability of jumbo loans. The general attitude of the people we talk to at open houses is that the market has hit the bottom and that is backed up by current prices versus historical appreciation.

The sales-volume numbers in the higher-end market (which contains many of the golf properties in the chart above) have fallen off as expected with the arrival of the summer heat. The average price per square foot, however, has risen slightly from June’s figures. 

Overall, we are still seeing positive signs in the market place. Although prices have not yet stabilized in the higher end (over $1 million), prices seemed to have stabilized in the lower market segments. The mortgage industry continues to be a stumbling block in the higher end market as it seems that unless you can prove that you don’t need a Jumbo Loan (over $500,000), you can’t get one! The bottom line is that at the beginning of the downturn in 2006, there were over 10,000 homes available for sale in the Coachella Valley – a real glut, currently, that number is down to under 5,100. As the supply dwindles, the market begins to stabilize and people feel more comfortable to get back into the marketplace.

If buying property is something on your list (especially golf property), why not take advantage of the incredible prices and seller incentives now, when sellers will work with you, instead of in the future, when the demand starts to catch up with the supply? Especially if you’re buying and planning to hold for 5+ years.

Here are some yearly sales figures (units) for the City of La Quinta from 2002:

Year All LQ Golf Course
2002 1,354     259
2003 1,565   652
2004 1,931    813
2005 1,553  657
2006 1,098  491
2007 935   447
2008 1,063   416
2009 1,155   418
2010 YTD 825   363 (July)

* When looking at “sold” data, you have to remember that the numbers are generated on the date that the sale is recorded with the county but that the decision to buy was made about 45 – 60 days earlier.

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Its a great time to buy!

The Desert is heating up right now in more ways than one!  We all know that the weather is getting hot—100 degrees and rising,  don’t forget that it is a “dry heat” :-). But, in addition we are amazed at the number of buyers that are arriving at this time of year to look at homes.  Rumor has it that there are deals to be had, and that this is the time to come and get them.  And, I must agree.  There is truly great opportunity right now to buy a beautiful home in the Desert for an unbelievable price. We are already noticing that the really nice values in the range of $500,000 and lower are going so quickly that it is becoming a seller’s market! Often with multiple offers!   The high end is still a buyer’s market, but if the home is perceived as a deal, it is being purchased quickly.  The buyers have been waiting a long time for that “perfect deal”, and they are now realizing that even in the high end, their day has come to purchase. Dependent on the area, seller’s home prices have come down 30% to 40% from the all time highs of 2006 .  The summer buys that are available today are the best values that we have seen in years.

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What is an average home sale?

I hear the same question from a lot of people: “When are the prices going to get back to where they were now that we are at the bottom?”.  The answer, in our opinion is “a lot longer than it took the prices to drop”.  Since the 1960s, when real estate sales data first started to be recorded, real estate has appreciated at an annual rate of approximately 4.5%. There have been minor fluctuations but up to 2002 sales closely followed the line.

In the period from 2002 to 2006, we saw sale prices jump 79.5%  and from 2006 through 2009, we watched prices drop 48% and since settle back on the 4.5% “normal” line. Since 2006 and especially since September 2009, most real estate sales have been in the lower range, starting with “distressed” (lower priced foreclosures and short sales) and very slowly moving up in price as the lower priced supply dwindled and consumer confidence improved.

As I thought about this, I wondered just what was the size and price of the “Average” home sold in the valley? The chart below represents all valley sales from the Desert Area MLS. I did a standard search for residential sales and the only parameter I set was the date so the info is based on all reported sales in the entire MLS area – Desert Hot Springs to Indian Wells to Salton City.

Year Units Sold Avg SqFt Avg Sale Price $/SqFt DOM
2004 12,561 1,891 $397,138.00 $210.01 62
2005 11,126 1,878 $490,825.00 $261.36 71
2006 7,743 1,944 $542,183.00 $278.90 111
2007 6,123 2,034 $545,410.00 $268.15 139
2008 7,435 1,970 $394,831.00 $200.42 128
2009 9,280 1,886 $271,567.00 $143.99 126
2010* 9,140 1,976 $318,461.00 $161.16 128
* Projected total        
           
First 6 months of 2010      
Month Units Sold Avg SqFt Avg Sale Price  $/SqFt DOM
January 688 1,956 $309,900.00 $158.44 123
February 693 1,911 $302,244.00 $158.16 125
March 947 1,934 $300,104.00 $155.17 120
April 917 2,004 $325,520.00 $162.44 132
May 899 2,047 $348,942.00 $170.47 137
June 882 1,990 $319,486.00 $160.55 129
6 Mos 5,027 1,976 $318,461.00 $161.16 128

  
As you can see, the sales price per square foot ($/SqFt) from the high in 2006 – $278.90 dropped to the low in 2009 – $143.99 (-48.4%) but has rebounded in 2010 to $161.16 which is 42.2% from the 2006 high. Remember that these numbers represent all the homes in the valley so it is skewed by the “distressed” property sales. I feel that prices in the more affluent communities has dropped about 35% from the 2006 high. Some of the higher priced homes, ($1,000,000+) have still not seen much interest.

This, now, makes me wonder just how different some of the local cities stack up against one another. I included, in the following chart, the cities of Desert Hot Springs and Coachella which clearly show the affects of distressed property sales as compared to more affluent cities in the valley.

2006 Units Sold Avg SqFt Avg Sale Price $/SqFt DOM  
DHS 663 1,575 $285,136.00 $181.04 119  
Coachella 182 1,592 $324,223.00 $203.66 76  
Palm Springs 1,565 1,652 $483,783.00 $292.85 113  
Rancho Mirage 631 2,763 $872,763.00 $315.88 122  
Palm Desert 1,177 1,948 $602,591.00 $309.34 106  
Indian Wells 196 2,987 $1,146,332.00 $383.77 111  
La Quinta 1,098 2,354 $771,522.00 $327.75 117  
             
2010 Units Sold Avg SqFt Avg Sale Price $/SqFt DOM % Drop 06-10
DHS 421 1,542 $94,793.00 $61.47 82 66.0%
Coachella 201 1,876 $142,058.00 $75.72 74 62.8%
Palm Springs 850 1,769 $315,595.00 $178.40 133 39.1%
Rancho Mirage 342 2,632 $575,157.00 $218.52 184 30.8%
Palm Desert 676 1,898 $369,961.00 $194.92 141 37.0%
Indian Wells 126 3,052 $830,372.00 $272.07 217 29.1%
La Quinta 705 2,388 $519,612.00 $217.59 158 33.6%

The chart above also uses data from the Desert Area MLS and shows the change from 2006 to 2010 by city. Although the 2010 numbers only represent 6 months of data, the current sale price info is still relevant. 

But I digress, (sorry), back to the original question. If the home sale prices continue to appreciate at the normal 4.5% rate, home sale prices should get back to 2006 levels in 2020. In other words, keep breathing .

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The “Bubble” has collapsed!

The Bubble Picture


Data from the Desert Area MLS

The graph above represents the price per square foot of sold homes in south La Quinta, California from 1998 through April, 2010.

The straight blue line represents an annual 4.5% appreciation rate, which, according to the National Association of Realtors (NAR), has historically been very close to the actual sales data and when graphed, mirrors actual sales from as long ago as the 1960’s.

The red line is the actual price per square foot of those homes that sold from 1998 through April 2010.

The “Bubble” started in 2002, peaked in 2006 ($343.66) and started to really crash in 2007. At the peak in 2006, the homes were selling 186% of what is considered normal. In August of 2009, the “actual” line first fell below the “normal” line and stayed below until December when it crossed back above the “normal” line as inventories began to shrink. During the one month of October 2009, the average price per square foot was down to $173.66 – 17% below the “normal” line or a 49% decrease from the high – but that was just one month. The 2009 average finished the year only 3.99% above the “normal” line.


Data from the Desert Area MLS

The 2009 average price per square foot ($219.56) is below the half way point between the average price for the years of 2003 ($205.48) and 2004 ($239.72).

While the 2009 average finished the year slightly above the “normal” appreciation line, looking at the 2009 sales by month shows that the price dipped below the “normal” appreciation line in August for the first time since August 2000 and only came back up above the line with a strong rebound in December.

According to the NAR, we should not expect the price to go much below the “Normal” line and with today’s record low mortgage rates, bolsters the feeling that values have returned to where they should be and that this is a great time to buy!

Also, NAR reported that nationally, “Pending” home sales decreased 7.6% in January from December, 2009 but have had a 8.2% surge in February. The decline was the first in 10 months and is blamed on the severe weather all across the country and likewise the strong rebound can be attributed to the arrival of Spring. Before January’s numbers, the previous 9 months were the longest string of increases in the index since it began in 2001. “Pending” sales are those that are under contract but have not yet closed. Since the average escrow is between 45 and 60 days, the decision to buy a home that appears as “sold” (closed escrow) today was likely made 1.5 to 3 months ago. “Pending” homes is a much more current number.

Another bonus is that mortgage rates are at record lows and mortgages are becoming easier to get as lenders are getting more comfortable with the latest regulations.

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A Concept to Consider…

Let’s say that it is mid-season in 2006 and you live in a home that is worth $900,000. Now let’s say that your children, grand children and friends have discovered that visiting you is a whole lot of fun so you want to buy a bigger home – say $1,800,000. So here’s what you are looking at (roughly), invest an additional $900,000 in the bigger home and at least double your property tax base which would be more than $11,250 additionally per year. But for some reason you didn’t pull the trigger and now it’s 2010, and you are reconsidering that proposition BUT your house isn’t worth $900,000 anymore and you could never afford that upgrade…

Oh Really?

Now, The “Bubble” has burst and your home has depreciated by 35% – BUT so has the home you wanted to buy. So you sell your home for $585,000 ($900,000 – 35%) and the home you wanted to buy for $1,800,000 has also depreciated 35% and is now worth $1,170,000. So now in 2010, you invest an additional $585,000 instead of $900,000, and buy the new home for $1,170,000. Your children, grand children and friend come to
visit and are really thankful that you bought such a nice comfortable home…

The bottom line is that if you upgrade today using the example above, you will save $315,000 in upgrade cost and you will save $7,875.00 per year in property taxes because you bought your new home for $630,000 less than you would have in 2006.

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In Search of the Bottom…

In search of the bottom…

Most seasoned Realtors would agree that we won’t really be sure that real estate prices have bottomed out until about 3 months after the much anticipated event actually occurs – when prices stop declining and, in fact, may even appreciate slightly.

Having said that, there are two forward looking indicators that suggest that we are getting very close and that we will reach the lowest plateau this summer.

First, according to the National Association of Realtors (NAR), historically, real estate has appreciated at a rate of about 4.5% annually and if you go back into the 1980’s and plot a straight line indicating that 4.5% increase and then plot the actual sales figures it is quite apparent that that figure is credible. Of course there are a few peaks and dips but overall the actual sales seem to cover that 4.5% line – until 2002.

Below is a graph using numbers from south La Quinta, California, one of the areas where Gallaudet Properties does business but the graph mirrors the national average.

Data from the Desert Area MLS

The graph above represents the price per square foot of sold homes in south La Quinta, California from 1998 through May 2009.

The straight blue line represents the annual 4.5% appreciation factor and the red line is the actual average price per square foot of those homes that sold from 1998 through May 2009.

You will notice that the “Bubble” started in 2002, peaked in 2006 ($343.66) and started to really crash in 2007. At the peak in 2006, the homes were selling 186% of what is considered normal (the 4.5% line) according to the Southwest Florida realtor data. During the month of May 2009 ($235.43), the difference is down to 112% or a 31% decrease from the high. Keep in mind that while the actual sales line may continue downward below the “normal” line, it also may not actually get there but we are statistically very close.

The May 2009 price per square foot ($235.43) is slightly below the average price for the year of 2004 ($239.72).

According to the NAR, we should not expect the price to go much below the “Normal” line and with today’s record low mortgage rates, the feeling that this is a great time to buy is getting stronger!

Secondly, the NAR reported yesterday that “Pending” home sales are up for the third month in a row. “Pending” sales are those that are under contract but have not yet closed. Since the average escrow is between 45 and 60 days, the decision to buy a home that appears as “sold” (closed escrow) today was likely made 1.5 to 3 months ago. “Pending” homes is a much more current number. Read the article

One last ingredient, mortgage rates are at record lows and mortgages are becoming easier to get as lenders are getting more comfortable with the latest regulations.

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Where home prices crashed early, signs of a rebound


The New York Times

Where home prices crashed early, signs of a rebound
Hard-hit areas, such as Sacramento, Las Vegas, parts of Florida and California’s Inland Empire, appear to be among the first cities in the nation to reach the early stages of recovery, as investors and first-time buyers compete for bargain-priced foreclosures.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • By some indications, the market could be close to a bottom.  Pending home sales – homes that are under contract, but have not yet closed – and construction spending rose in March.
  • When a market reaches bottom, foreclosures usually stop piling up and banks become more willing to issue loans, confident that the collateral backing them will not continue to decrease in value.
  • The first-time home buyer tax credits from the federal and state governments, coupled with favorable home prices and near record-low interest rates, led to an increase in home sales in March.  Sales of existing, single-family homes rose 63.8 percent in March compared with the prior year.   Monterey County reported a sales increase of 248.7 percent and the High Desert region saw sales increase 172.7 percent compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
  • The median price for the state also increased in March, rising 2.2 percent in month-to-month comparisons.  March marked the first monthly increase since August 2007, while the statewide median price has remained in the $250,000 range for the past three months.

To read the full story, please click here