After a long period of decline in the real estate market since 2007, sales of residential property in the Coachella Valley are showing signs of life once again. But it doesn’t mean the marketplace is out of the woods just yet.
While there have been a respectable number of home sales during the last half of 2013 and well into the first quarter of 2014, those sales reflect a marketplace that remains in a state of flux. Buyers are certainly out there with dollars to spend but they are looking more strategically for good buys, the condition of the home and of course location, location, location.
Here is the good news and the not so good news.
The median sales price in the entire Valley rose more than 5 percent in the first three months of 2014, a sign that is encouraging. But that wasn’t the case for every desert city. While prices increased in Indio, La Quinta, Palm Desert, Desert Hot Springs and Indian Wells, home sales in Palm Springs, Cathedral City and Rancho Mirage declined.
Big Difference in High End And Low End Markets.
In data published by Market Watch, a real estate advisory firm, there are two distinct housing markets in the valley. No surprise there when locals who live, work and raise families here differ economically from those who come to the desert to retire full time or who are looking for second homes and leisure properties.
As one example, the number of property sales above $700,000 rose more than 50 percent during this last season while homes under $300,000 stumbled along and in some areas even continued to decline.
Other data clearly indicates that the higher-end market will continue to expand as people discover desert living, many who will use cash rather than loans to make their purchase. Part of the reason for the decline in the number of lower-end homes sales is that investors are just no longer finding those bargain basement prices that were the result of short sales and foreclosures. In fact, only 10 percent of recent sales were for distressed properties. That market place seems to be drying up as the economy gets back on its feet.
While some of the housing market is being held back due to a lack of jobs and in general the slowly growing economy, Market Watch continues to indicate a stable housing market for the Valley in the months and few years ahead which is certainly better news than in the past 48 months.
A Little Bit Of Advice From An Expert
So is this a good time to buy? Much depends on one’s own goals. If you want a home that is in great condition, has low maintenance and in an area that compliments your lifestyle, expect to shell out some dollars. There continue to be many nice homes in the Coachella market that are move-in ready or can be with some simple and basic updates.
But if you are willing to buy something that needs a little tender loving care, our advice to our clients is always clear.
• Take your time.
• Define your expectations.
• Plan it all out on paper before making that commitment.
With two decades of experience and dozens of remodeling projects under our belt, we have seen remodeling costs get out of control without plans in place as a control. And as a very general rule, projects can easily range from $40 to $225 per square foot depending on the scope of work. But when they exceed the top end of costs, the value can be hard to recoup at the time of resale.
Our experience also reminds that it is far better to know what kind of dollars will be necessary up front long before you sign on that purchase offer and not “over-design” for the neighborhood.
According to several sources, remodeling projects that provide the greatest returns on the dollars invested include not surprisingly, the master bathroom and kitchen since these can be disruptive undertakings yet return as much as 80% of those costs at the time of resale.
If the prospective home’s bone structure is in good shape and the layout is well designed, then something as basic as a new coat of paint or installing new floor, wall and window coverings will make the interior fresh and ready for your occupancy.
Finally, above all…. remember the old adage, location, location, and location. In other words, the area the property is located in is as important as almost anything else,… so important that everything else you could say about it hardly matters. So plan wisely now and for your future here in the desert.
By Michael A. Thomas, FASID, CAPS, CASE
Michael is a well known and established interior designer with more than 30 years in the profession. He is a Certified Aging In Place Specialist, the co-author of "Residential Design For Aging In Place" and a former National President of ASID. His work has been published and quoted in various media including Palm Springs Life, Houston Chronicle, Florida Home + Garden, Miami Herald, Dwell Magazine and extensively profiled in Interiors + Source magazine. He currently serves as the President of the Design Alliance for Accessible Sustainable Environments. From an office and studio in downtown Palm Springs, CA, his remodeling and new construction projects extend from southern California to Florida, from New York to Vancouver. Currently he is completing the design for the historic rehabilitation for the original Palm Springs library built in 1941, the Welwood Murray Memorial Library.
Michael is an award winning interior designer based in Palm Springs, CA. He is a Professional Member of the American Society of Interior Designers and a member of the ASID College of Fellows.
As a Certified Aging In Place Specialist, he creates smart looking spaces that are safe and secure and create homes for a lifetime.
And with thirty plus years in the profession, he has honed his humor, elevated his passion for design and sharpened his wit to not take anything too seriously except his design work.