The blue lines represent 2008 data, the orange lines represent 2009 data magenta lines represent 2010 and the green lines represent 2011 data.
Open escrows in June decreased overall by 12.3% while the number of Escrows for the more expensive Golf Properties decreased by 23.1%. We seem to be in a period of retreat fueled by the uncertainty in the economic health of the country. Prices have started to decline again after almost two years of relative, seasonal stability. This can be attributed to three causes. First, historically, prices tend to decline in the hot summer months as demand lessens. Second, there seems to be an increase in the number of “short sales” and “bank owned” properties being offered at reduced prices affecting the entire market and third, consumer confidence has taken another hit from yet another debate concerning the nations economy. Real estate sales mirror the level of consumer confidence – when confidence goes up, our sales go up. Remember that although you “may” get a home at a lower price if you wait, the mortgage interest rate will likely be higher so the purchase will wind up costing you more over time.
Closed home sales in June showed a 10.3% increase over May making June the best month in La Quinta since before 2008. Although the general attitude of the majority of people we talk to at open houses is that the market has hit the bottom but we are beginning to hear some folks saying they’re going to wait a little longer. The slightly increasing mortgage interest rates may add some urgency to our industry.
The sales-volume numbers in the higher-end market (which contains many of the golf properties in the chart above) remained relatively steady in June (down just 1.8%). However the average price per square foot decreased 16.1% in June over May attributable to an increase in the destressed property inventory.
Overall, we are still seeing positive signs in the market place. There has been a steady increase in activity through June. The mortgage industry is the best it’s ever been for conventional loans but the “jumbo” loans, although becoming more available, continue to be a stumbling block in the higher end market. Most lenders seem to be trying to deal more efficiently with the inventory of distressed properties although dealing with a short sale of foreclosure can still be a challenge.
La Quinta Inventory:
On June 30, there were 5,319 active listings (down 9.0% from May), 2,486 units in escrow (down 7.7% from May) totaling 7,805 units (down 8.6% from May) available for sale which makes 31.85% of the total in Escrow (Up 1.0% from May) – which means we are working on reducing the supply which will ultimately increase demand and improve the market.
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|
* Remember that the sales numbers represent “Closed” escrows. Since the average escrow is between 45 and 60 days, the decision to purchase the homes that closed in June was probably made in March to early April.