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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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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

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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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May 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 May 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 May were one shy of April which were the strongest since May, 2006. We continue to notice an improvement in consumer confidence and an increase in buying activity in homes over $700,000, which has been slow over the past 18 months. Personally, our team continues to put non-distressed, “regular” home sales together this year, which has been a welcomed change. Prices have not started to rise, but they seem to be stabilizing as there has not been a significant change since March as buyers are starting to seize the well-priced homes on the market. 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) retreated slightly in May but the average price per square foot continued to improve. Sales in May were 3 units lower than April but were still stronger than any previous month since May, 2008. We are hoping this continues through the summer sellling season.

Overall, we are seeing some positive signs in the market place. Although prices have not yet stabilized in the higher end (over $1 million), there are signs of stabilization beginning in the lower market segments. The mortgage industry is still a stumbling block in the higher end market as it seems that unless you can prove that you don’tneed 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 5,800. 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 570  253 (May)

* 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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April 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 April 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 April were the strongest since May, 2006. We continue to notice an improvement in consumer confidence and an increase in buying activity in homes over $600,000, which has been slow over the past 18 months. Personally, our team has put many non-distressed, “regular” home sales together in the last 3 months, which has been a welcomed change.  Prices have not come up, but perhaps they are coming closer to stabilizing as buyers are starting to seize the well-priced homes on the market.

The sales-volume numbers in the higher-end market (which contains many of the golf properties in the chart above) continues to slowly improve as well. Sales in April were the strongest since May, 2008 and continue their rising trend. This is a great sign.  We look forward to an even stronger May.

Overall, we are seeing some positive signs in the market place. Although prices have not yet stabilized in the higher end (over $1 million), there are signs of stabilization beginning in the lower market segments. The mortgage industry is still 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 5,800. 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   444          196 (April)

* 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.