By Bruce Cathcart
A while back I published an article titled “Location, Location, Location” in which I wrote about how lucky we all are to live in the Coachella Valley (well, at least 9 months out of the year) because of our proximity to good schools, medical services, fine dining and shopping, access to freeways and airports and, of course, our numerous entertainment venues. The main point of that article was to help potential home buyers consider the location of their next home to make sure that they would be close to these amenities, but not too close! I based my advice upon my actual experience having been a real estate agent and broker here in the Coachella Valley for the past 34 years and knowing that being in the right location can add tremendously to the value of your home. Of course the opposite is true and wouldn’t you know it, I recently read an article in REALTOR Mag that actually quantified the top 5 neighborhood features that had the biggest impact on dragging down nearby home values!
Before I share these top 5 neighborhood “features”, let’s take a look at our valley’s real estate activity and the home sales for the month of August. While some Brokers and Agents were complaining about how slow their summer sales were, others were having their best months of the year. Here’s what happened overall.
According to the Desert Area MLS (as of 09/01/16) there were 779 pendings of residential properties here in the Coachella Valley in August. That’s down from the 822 pendings in the previous month (July) but still showing good volume and representing a significant increase in pendings when compared to the same time last year. In July there were 728 solds and in August we had 702 solds showing only a small decrease in closed sales. This is huge increase over last year though when we sold only 628 homes in August 2015. In summary, we continue to surpass last year’s total sales through August with a total of 6,390 homes sold this year compared to only 6,105 homes sold through August last year (2015). Our inventory of homes for sale was slightly reduced this month with only 3,750 homes available on August 31, 2016 compared to 3,867 homes available on August 1, 2016. We have yet to see home prices recover to the pre “Great Recession” values in 2006, but the increased sales volume and reduced inventory numbers suggest that home prices will be increasing here in the fall if this trend continues. I said it last month and I will say it again, if you can stand the heat, now is a good time to be shopping for a home here in the Coachella Valley.
According to REALTORMag the top 5 negative influences on home sale prices are as follows: #5 if your home is located near a shooting range you will lose 3.7% in value. How close is too close? I’m guessing within gunshot range. We only have one outdoor shooting range here in the Coachella Valley and thankfully there are no homes located within gunshot range! #4 if your home is located near a power plant you will lose 5.3% in value. They didn’t say if windmills were considered power plants. #3 if your home is located near a high concentration of renters your home will lose 13.8% in value. This is something to consider since we do have a lot of large apartment complexes in our valley. #2 if you live near a strip club your home will lose 14.7% in value. Big mistake on my part here, I had to google it and found we have three, one in Palm Springs, Cathedral City and Coachella. Now I am getting emails and personal invites to attend. And the #1 Neighborhood feature that has the biggest impact on dragging down nearby home prices is… a bad school! If your home is located near a bad school you will lose 22.2% in value. Fortunately none of the schools here in the Coachella Valley could be considered a bad school.
After reading this article I started thinking that if I could find a home that had an apartment building on one side, a bad school on the other, located across the street from a strip club, and down range from a shooting range and power plant I should be able to buy it at a 60% discount!
Join me each month this year as we keep a close eye on our Coachella Valley real estate market. If you have a real estate question or concerns please email me at the address below.
Bruce Cathcart is the Broker/Co-Owner of La Quinta Palms Realty, “Your Friendly Professionals” and can be reached by email at firstname.lastname@example.org or visit his website at www.laquintapalmsrealty.com.