Written by
Mike Perrault
The Desert Sun
- Filed Under
Prices on the rise
The good news is analysts say the housing market's median prices have already hit bottom.
Here's a look at the median prices of several Southern California regions in December 2011 compared to their lows during the recession:
Palm Springs/Lower Desert, up 10.5%: $150,140 in April 2009 vs. $165,960 in December.
Riverside County, up 18.8%: $171,480 in April 2009 vs. $203,650 in December.
Inland Empire (Riverside-San Bernardino counties, up 14.3%: $150,860 in April 2009 vs. $172,430 in December.
Southern California, up 16.6%: $245,230 in February 2009 vs. $286,950 in December.
Los Angeles metro area, up 19.9%: $227,370 in April 2009 vs. $265,830 in December.
California, up 16.6%: $245,230 in February 2009 vs. $285,920 in December.
Source: California Association of Realtors
Average home prices in valley communities
Here's a closer look comparing the valley home prices in the fourth quarter of 2011 to the fourth quarter of 2010:
Bermuda Dunes (92203): $197,000, down from $216,000
Cathedral City (92234): $143,000, down from $171,000
Coachella (92236): $117,000, down from $130,000
Desert Hot Springs (92240): $93,000, up from $88,000
Desert Hot Springs (92241): $79,000, down from $123,000
Indian Wells (92210): $911,000, up from $664,000
Indio (92201): $160,000, down from $178,000
Indio (92203): $197,000, down from $216,000
La Quinta (92253): $432,000, down from $445,000
Palm Desert (92211): $300,000, down from $317.000
Palm Desert (92260): $370,000, up from $354,000
Palm Springs (92262): $290,000, up from $282,000
Palm Springs (92264): $289,000, up from $281,000
Rancho Mirage: $502,000, up from $478,000
Salton City (92275): $70,000, up from $68,000
Thermal (92274): $58,000, down from $78,000
Thousand Palms (92276): $83,000, down from $142,000
Source: Real Data Strategies
More
Experts say recent home sales figures show the Coachella Valley's housing market has busted out of a funk, and that a modest recovery will continue.
Economists, analysts, real estate brokers and agents who attended California Desert Association of Realtors' annual real estate market update and forecast Thursday agreed that a two-year analysis of home transactions shows the housing market is finally showing signs of life.
Valley home prices rose 1.8 percent over the past year, and 3.4 percent over two years, said Patrick Veling, a keynote speaker and president of the Brea-based real estate information firm Real Data Strategies.
The average valley home sales price rose to $271,000 in the fourth quarter of 2011. That was up from $266,000 in the same quarter of 2010 and $262,000 at the end of 2009.
“What that means is, we've clearly bottomed here and we're on our way back up,” Veling told a crowd of about 400 attendees at the Agua Caliente Resort & Casino in Rancho Mirage.
“But real estate is a local phenomenon, and we still have some ZIP Codes and sub-markets that are suffering.”
Overall, home sales volume rose 4.7 percent valley-wide, but the extent of the economic slump was evident as sales fell 6.9 percent over the past two years.
There may be no year that more clearly illustrates how dramatic differences are in home price and sales trends than 2011 — not only from one city to another but in terms of higher-priced versus lower-priced markets, Veling said.
“I think what we have are two different marketplaces happening with regards to sale prices,” Veling said.
“In the last six months, people in the market for properties at $800,000 or higher are seeing tremendous value. They're now seeing a house that was priced or valued at $1.8 million that they can get at $950,000 — a tremendous opportunity.”
In Indian Wells, for instance, the average sales price rose to $911,000 in the most recent quarter compared to $664,000 the same time a year ago. Home prices in Indian Wells rose 37 percent over the past year and 48 percent over two years. Sales volume jumped 38 percent over the past year, Real Data Strategies reported.
Compare that to Thermal, where the average sales price fell to $58,000 in the fourth quarter compared to $78,000 in the same quarter of 2010. Home prices there tumbled 26 percent last year and 23 percent over two years. Sales volume dropped 29 percent last year.
“The farther you get out, the more challenging the markets seem to be,” Veling said.
Much depends on foreclosure market
Leslie Appleton-Young, chief economist for the California Association of Realtors, told the crowd that distressed properties will continue to play a relatively big role in the market across the desert and state.
In December, distressed sales accounted for about 63 percent of overall home sales in Riverside County, she said.
Statewide, 24.6 percent of sales were bank-owned properties and 22.2 percent were short sales last month.
“People are still very interested in housing; it's just that they're interested in housing that's a great deal,” Appleton-Young said.
The median home price — half sold for more, half for less — in the Palm Springs area bottomed out in April 2009 at $150,140, she said. As of December, the median price had climbed 10.5 percent to $165,960.
Appleton-Young projects a 1 percent rise in sales of previously owned homes in California this year, and a 1.7 percent hike in the median price to about $296,000.
Statewide, 491,100 existing homes sold last year, and she forecasts about 496,200 will sell in 2012.
In the Coachella Valley, 10,696 homes sold last year based on Desert Area Multiple Listing Service transactions, compared to 9,995 in 2010, Veling said.
Realtors struggle for a piece of the pie
The increase in sales volume has meant a larger pie for real estate agents, but that hasn't lessened competition for closings.
About 24 percent of licensed Realtors didn't record a single sales transaction last year, Veling said.
And 50 percent of agents accounted for 90 percent of all sales. That left the bottom half of Realtors vying for the remaining 10 percent of sales.
Realtors have had to work harder and longer to stand out, and those who are embracing social media and social networking appear to have a leg up on their peers. “Instead of hyper-local, it's hyper-social,” Veling said.
Appleton-Young said key economic indicators such as consumer spending, consumer confidence, and improvements in the state jobless rate and GDP growth show the economy “is moving in the right direction” and will positively impact the housing market.
Tough mortgage underwriting standards continue to constrain demand.
“A year ago, 10 percent of contracts for houses fell out because of some issue,” she said. “Today, it's a third.”
But Appleton-Young said there's hope the mortgage market will improve and enable more buyers to qualify.
Veling said banks appear to be more serious about pricing and selling foreclosed homes and streamlining their short sale processes to more aggressively move internal inventories.
At the same time, cost-conscious investors and buyers with cash see opportunity in the bargain prices, particularly in the high-end market.
Appleton-Young said a statewide survey showed buyers nowadays typically mull buying a home for more than four months, shop two-and-a-half months before contacting an agent and are motivated by price decreases, low mortgage rates and tax deductions.
“Don't let anybody tell you there are not people looking for the right house at the right value proposition,” Veling said.
