By Bruce Cathcart
July is behind us and that means we are half way through the summer! Is it just me or has this been the icky sticky summer so far? What happened to “yeah it’s hot, but it’s a dry heat?” High humidity and a slow real estate market can be depressing. But this is what we have come to expect for this time of the year so we should not be surprised by this and this month’s numbers continue to support the downward trend in sales activity for the Coachella Valley.
Last month (June) according to the Desert Area MLS (as of 8/01/14) there were 698 pendings of residential properties in the Coachella Valley. There were 667 pendings in July representing a more stable level of sales activity even if it remains at a slow pace. Last month there were 764 solds and this month (as we predicted) there were only 704 solds representing an 8% drop in closings. When compared to last year we closed 786 homes in July representing a year over year decrease of approximately 11% in home sales.
Overall inventory available to buyers this month was down significantly again (approximately 6%) from 3,360 properties available for sale at the beginning of July to just 3,161 properties available for sale at the end of July. This isn’t crystal ball stuff here; these are real numbers that continue to support the trend of less sales activity, fewer closings and lower inventory. With only 667 opened escrows in July we can be pretty sure that the August report will show less than 704 solds next month continuing the declining trend! This is the new norm, at least for now, and there is nothing that I can see on the horizon to alter this course through the end of the year.
What about prices? Prices seem to vary based upon what is now popularly called “hyper-local” markets. That means that in some neighborhoods sale prices are up while in other neighborhoods they are down. Taken altogether they appear stable, but individually clearly some markets are doing better than others. There is a great example of this and what has happened in one high end market with this week’s Top Sale.
The big rumor last month was that President Obama and his family were buying the old Joseph Wambaugh estate in Rancho Mirage. Local realtors said yes, the White House officials said no, TMZ said no, White House interior designer Michael Smith said no (too close to the mountains and not enough natural light?), Democrats said I hope so and Republicans said I hope not… Well the sale did close on 7/30 and it is now old news. But it was our top sale in July at $3,500,000.00. This is a spectacular estate home with 7 bedrooms and 8 bathrooms in 8,232 square feet located on a hilltop above Thunderbird Heights on 3.29 acres. Looking at the history of this home tells quite a story. It was purchased by the seller in 2001 for $4,900,000.00. It was listed for sale in 2008 for $9,500,000.00 and reduced in 2010 to $8,000,000.00 and reduced in 2013 to $7,000,000.00, then $6,000,000.00 then $5,000,000.00 and then to the current list price of $4,250,000.00 where it finally sold for $3,500,000.00! To review, it was purchased in 2001 for $4,900.000.00 and 13 years later it sold last month for $3,500,000.00. Not exactly a good investment but a pretty strong indication of what is going on in the Rancho Mirage luxury home market. Knowing this, does anyone think that the Bob and Dolores Hope mansion stands a chance of selling at their current asking price of $34,000,000.00?
And we have a new winner for the lowest priced home sale which sold last month. It was a lovely little fixer located in the hills above Desert Hot Springs, built in 1958 with 2 bedrooms and 1 bath in approximately 864 square feet on a one half acre lot for only $8,000.00! I am guessing “needs work” might have been an understatement on this one.
Real Estate Tip of the month: Buyers take advantage of these hot ugly days by staying diligent in your search for a new home. Do your shopping early in the morning with your trusted real estate agent while most other buyers stay indoors and wait for cooler weather to do their shopping. Sellers make sure your home is cool and inviting and don’t hesitate to offer thirsty shoppers an iced cold bottle of water.
Bruce Cathcart is the Broker/Co-Owner of La Quinta Palms Realty, “Your Friendly Professionals” and can be reached by email at email@example.com or visit his website at www.laquintapalmsrealty.com.