April 2020
*CLICK HERE to view our entire 2020 1st Quarter Report including STATISTICAL REPORTS, or view the report by clicking “View PDF Document” located to the right of this page under Diane’s photo.
It’s safe to say we would have never imagined finding ourselves in a global pandemic. This fluid situation continues to leave us with no choice but to adapt, unite and confront this virus together. This fight will take time, innovation and sacrifice, but we will get through this. The foreseeable future may appear challenging as we see the fluctuations of the stock market, mandated closing of businesses and record unemployment rates. Our emotions can run high, but we must take a deep breath and remind ourselves there is nothing we can’t handle together.
How will this affect the housing market? There is very little similarity to the recession of 2008-2009. This recession is not economically driven and housing is a casualty of a public health crisis turned economic crisis. That previous recession was led by the overvalued housing market, over supply of homes and more liberal lending standards. Our current housing market is positioned much differently. Most recently, buying power had been two times as high as the median sale price of homes, and with the limited supply of homes, positioning the housing market the industry should help lead the recovery. Historically, the housing market has aided the economy in recovering from a recession.
With this virus, the market should rebound similar to what happened after 9/11. The same industries: airlines, leisure hospitality, restaurants and entertainment were affected because people were scared and reluctant to venture out. This medically induced economic crises is similar. Once our country opens up and we feel comfortable resuming our routines, the economy should quickly show signs of improvement. The shared sacrifice of the people to solve a common problem will propel and motivate us to move the economy farther. We are strength in numbers, and once again we have come together not only for ourselves and our families, but for everyone in this nation and across the globe. Fortunately, it appears that California is ahead of the curve and hopefully this will lead to a faster recovery.
The 1st quarter sales of 2020 in Indian Ridge finished at $19,015,400, with a total of 23 homes sold, 11 homes in the HOA at $7,380,500 and 12 homes in the PUD at $11,634,900. The average sales price in the HOA was $670,954 with an average 101 days on market. Average sales price in the PUD was $969,575, with average days on market at 69 days. This quarter is the highest number of homes sold and dollar volume since first quarter 2006. In 2004 and 2005, the first quarter sales were 49 and 33 respectively. The good news is the average sales prices for homes both in the HOA and PUD are approaching the average home prices we experienced back in 2006. During the past month of this crisis, we have experienced a few cancelled escrows, a number of homes closing escrow as scheduled and some escrows where extensions of time for buyers and sellers have been agreed upon, giving time for this market to begin the recovery and both parties being able to travel and make necessary arrangements to move. Without this medical crisis, home sales would have been even higher in Indian Ridge.
In the Coachella Valley, the Total Homes Sales Evaluation data shows 2,396 homes sold in the first quarter. This is slightly up compared to a year ago while million-dollar home sales were the highest since 2007. Looking at the Country Club Home Sales Price Change and Appreciation, five out of the seven high-end clubs were on track to sell more homes this year than in 2019. Of the other 12 Country Clubs we track, nine of the communities have been showing positive sales that indicate similar if not more sales than in 2019. Seven of the clubs show positive price appreciation while the remainder are slightly below previous average sales prices.
Referring to the Sales Update by Cities report, the majority of the cities in the Coachella Valley show an increase in home sales. Many cities have been on pace to supersede sales from 2019. Current inventory throughout the Coachella Valley remains low with only 3,043 active homes on the market compared to a year ago we were at 3,772. Despite the lower level of inventory, most of these cities were able to generate the same if not more sales, which is a positive indicator that we were on track to have a good 2020.
The next couple months will be a true tale of the effects of the Coronavirus. We expect the 2nd quarter to be slower with recovery taking place in the 3rd and 4th quarter. Experts indicate a strong 4th quarter, as well as a strong start going into 2021. While it is true we cannot predict the future, nor do we have a crystal ball, we know real estate will continue to remain one of man kind’s basic needs. Once the quarantine is over and people feel safe and jobs are restored, the real estate market should pick up where it left off, as we are receiving great responses from our advertising and marketing from buyers and sellers leading us to believe this will hold true.
The California Desert Association of Realtors is developing custom metrics for compiling statistical information to follow the effects of COVID-19 in the Coachella Valley housing market. This information will be distributed periodically so that we can keep track of the current changing market’s performance. We will be sharing this information with you as we receive it through our Straight Talk Tuesday.
Although we are following stay at home orders, we will continue to be available seven days a week. Nothing has changed in terms of our commitment to you. If you have questions about buying or selling real estate, we would love to work with you and schedule a virtual consultation to discuss your options.
On behalf of DW & Associates, we send you our love, prayers, and best wishes for the health of you and your loved ones. We are here to assist you in any way possible, and together we will get through this.
Sincere regards,
DW & Associates ~ Diane R. Baxter, Allison Renz, Heather Wong, Terrie Pena, Frank Montiforte, Kristeen Kidd, Barry Goldstein, Nancy Schlange, and Laura Flannery
CalDRE #01364828