Experts: Coachella Valley slowly coming out of housing slump

The Coachella Valley's housing market finally appears to be coming out of an extended downturn, and a modest recovery is projected this year, experts said.

But an analysis of home sales and prices shows just how dramatic differences can be in the valley's cities, said Pat Veling, president of the real estate information firm Real Data Strategies.

In Indian Wells, for instance, the average sales price rose to $911,000 in the fourth quarter of 2011. Home prices in Indian Wells rose 37 percent over the past year and 48 percent over the past two years, with sales jumping 38 percent last year, according to Real Data Strategies

Compare that to Thermal, where the average sales price was $58,000 in the fourth quarter. Home prices in Thermal fell 26 percent last year and 23 percent over two years, while sales fell 29 percent last year.

"The farther you get out, the more challenging the markets seem to be," Veling said.

Veling and Leslie Appleton-Young, chief economist for the California Association of Realtors, assessed the local housing market Thursday during the California Desert Association of Realtors' annual real estate market update and forecast.

Across the valley, home prices increased 1.8 percent over the past year, and 3.4 percent over two years, Veling said. The average price in the fourth quarter of 2011 was $271,000, up from $266,000 in the fourth quarter of 2010 and up from $262,000 in the fourth quarter of 2009.

Overall sales were up 4.7 percent valley-wide, but down 6.9 percent over two years.

Appleton-Young projects a 1 percent percent increase in home resales statewide this year, with prices expected to rise by about 1.7 percent. Sales of distressed properties will continue to account for much of the overall sales.

Statewide, about 491,100 existing homes sold last year, and she forecasts that 496,200 will sell this year, while the state's median price -- half sell for less, half for more -- is expected to increase to $296,000 from $291,000 in 2011.

In December, distressed sales accounted for about 63 percent of overall home sales in Riverside County, Appleton-Young said. Statewide, bank-owned sales accounted for 24.6 percent of sales, and 22.2 percent were short sales, she said.

"People are still very interested in housing, it's just that they're interested in housing that's a great deal," Appleton-Young said. "Prices have essentially been at a plateau for the past 18 months."

Veling said real estate agents faced stiff competition last year, with 24 percent of licensed Realtors not recording a single sales transaction. Veling said 50 percent of agents in the valley accounted for 90 percent of sales, leaving the other half to vie for the remaining 10 percent of sales.

Appleton-Young said there's hope the mortgage market will improve and that more buyers will be able to qualify.

"A year ago, 10 percent of contracts for houses fell out because of some issue," she said. "Today, it's a third."