Fewer Coachella Valley homes for sale
As inventory shrinks, prices may rise
6:29 PM, Oct. 22, 2011 | Mike Perrault- The Desert Sun
Inventory declines
The supply of homes for sale in the Coachella Valley has steadily dropped this year — particularly lower-priced houses that bargain hunters are buying up.
“The inventory levels are some of the lowest we've seen in quite some time,” said Patrick Jordan, broker associate with Patrick Stewart Properties, Windermere Real Estate in Palm Springs.
Although inventory levels vary based on various databases, a TrendVision snapshot from the Desert Area MLS shows there were 2,888 single-family homes and 1,295 condos for sale as of Oct. 20.
When a new listing popped up this week on the Desert Area Multiple Listing Service for $503,000 in the Deepwell neighborhood of Palm Springs, real estate agents flocked to the house, in part, because of its attractive price compared to other homes in the area.
“It will sell, probably over asking price,” and there will likely be multiple offers, Jordan said.
The residential active inventory has dropped by more than 1,000 listings in four months, excluding mobile homes, Jordan calculated.
An MLS report showed the valley's inventory of homes fell 22 percent to 4,418 in September from 5,681 in September 2010. That compares to the peak months of 2007 and 2008, when home sales were booming and monthly inventories regularly topped 9,200, according to the California Desert Association of Realtors.
In September 2008 there were 8,117 homes listed, for instance, and 9,742 in March 2008, according to the MLS.
Realtors, brokers and analysts say several reasons exist for the inventory decline.
Some sellers pull homes off the market in the hottest months, often waiting for cooler temperatures and snowbirds to return, said Patti Rollins, branch manager for Coldwell Banker Residential Brokerage's Palm Desert office.
Other sellers have pulled their homes off the market rather than settling for today's lower prices.
“It's still a bitter pill to swallow for the sellers,” Rollins said.
Homeowners who are able to hold off selling often are waiting for prices to rise, and dwindling inventories could begin to make that happen, said Jim Franklin, broker associate with Prudential California Realty and president of the Palm Springs Regional Association of Realtors.
At the same time, banks and other lenders scrutinized since last fall for foreclosure-processing issues have been slower to take back properties. That has at least temporarily reduced the supply of distressed properties.
“The banks are not exposing their inventory to us as quickly as they were in the past,” Rollins said.
Bank changes
About 424 of the homes for sale in September were bank-owned properties, with another 596 sold or pending during the month. That was a 39 percent drop compared to the same month a year ago.
The valley's shrinking for-sale inventory parallels a trend in California and throughout the nation.
There were 2.19 million homes listed for sale nationwide at the end of September, down 20 percent from a year earlier, according to a report from the real estate website Realtor.com. That was the lowest level since 2007, when the company began its count.
The California Association of Realtors reported the unsold inventory for single-family homes across California was 5.1 months in September, down from 5.9 months in September 2010.
The monthly index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Realtors said a shrinking supply of homes typically begins to drive up prices, but so far, that hasn't happened largely because demand remains soft.
The median price in the Coachella Valley fell 8 percent to $167,500 in August, San Diego-based real estate information provider DataQuick reported.
Home sales across the valley have held up relatively well in recent months despite the decline in inventories, real estate professionals and analysts said.
Buyers' market
Low prices, coupled with historically low interest rates, are among reasons buyers are signing deals.
Steve and Geri Downs with Coldwell Banker Residential Brokerage said more homes are selling in cities such as Rancho Mirage and Indian Wells, where buyers often seek gated communities and country clubs.
Mike and Barbara Kline anticipated it would take longer than it did to sell their custom-built, 5-year-old home in Orange County. They worked with Geri and Steve Downs to find another, smaller home where they plan to retire in the valley.
A key strategy that worked for the Klines when selling is pricing it right.
“You can't have this overinflated idea of what you thought you might get five years ago,” Mike Kline said.
Despite the lower inventories, the Klines were able to look at nearly 50 homes near their price range and narrow it down to about 10 options.
“You get more bang for your back (than in Orange County), no doubt about it,” Kline said.
Nancy Beard also relied on Steve and Geri Downs to find her a house in Mission Hills in Rancho Mirage when she retired and sold her home in Long Beach.
There were plenty of homes to choose from in gated communities with access to golf courses, Beard said.
Steve Downs said for home prices to eventually recover, home inventory must continue to drop and sales volume must remain healthy.
“It appears this is a continuing but very slowly evolving trend,” he said. “Don't look for price recovery for at least 12 months.”
Improving economic conditions, particularly job growth, is another factor necessary to drive recovery, Realtors said.
“Once job numbers kick in and America goes back to work, we will be back on our way,” Jordan said.
One factor that could affect the valley's market is an existing, but undetermined, “shadow” supply of foreclosures — distressed homes that banks have yet to put on the market.
When those properties hit the market, the typically lower foreclosure prices could push down any price gains.
Greg Berkemer, executive vice president of the California Desert Association of Realtors, said lower-priced homes are selling, and those inventories are being depleted initially.
“One distinguishing difference about this housing shift is that the market collapsed from the bottom,” Berkemer said.
“In 2005 and 2006, the lowest-priced homes stopped selling — and the more expensive ones kept selling. The market is healing itself in the same way.”
Foreclosure activity plummets in valley for 2nd consecutive month
Experts say that new numbers show market is headed toward recovery
10:22 PM, Jun. 24, 2011 | Written by MIKE PERRAULT -
The Desert Sun
Foreclosure activity in the Coachella Valley plummeted by more than one-third in May compared to the same month a year ago, marking the second straight month with a significant decline, a new report shows.
The number of foreclosure filings — default notices, auctions and bank repossessions — fell 35 percent to 1,034 in May from 1,592 in May 2010 across the valley, Irvine-based real estate data provider RealtyTrac Inc. reported.
In April, foreclosure filings fell 27percent to 1,151 compared to April 2010.
It's an encouraging sign, economists and area real estate professionals said, but it will still take years for lenders to unload all of the homes and condominiums remaining in the valley's foreclosure pipeline.
“It isn't over by any means, but I think we've reached the peak of foreclosures and now we're headed the other way,” said Jim Franklin, a broker with Prudential California Realty and president of the Palm Springs Regional Association of Realtors.
He and other Realtors said they're seeing fewer short sales, transactions in which homeowners in financial distress sell their properties for less than they owe on the mortgage.
Among the reasons foreclosure activity has dropped off is because mortgage lenders have faced increasing legal challenges from homeowners and regulators, said economist John Husing with Economics & Politics, Inc.
Since last fall, state attorneys general across the country have been investigating many banks' foreclosure practices.
Banking regulators signed consent orders with 14 major banks in April requiring changes in how they deal with foreclosures and requiring them to work more diligently with borrowers who are at risk of default.
Some banks are struggling to fix their foreclosure processes, including having to bolster staff to handle mounting foreclosure backlogs and ensure they have property documented ownership of mortgages to show a clean change of title, bank analysts said.
May's decline in foreclosure activity parallels a drop in the number of short sales and bank-owned sales during the month, said Greg Berkemer, executive vice president of the California Desert Association of Realtors.
“Of equal, if not greater, importance, is the percentage of bank-owned and short sales that have declined,” Berkemer said. “A declining percentage of distressed properties coming into the market is movement in the direction of recovery.”
Forty-four percent of single- family home sales in May were distressed properties, down from 52 percent in May 2010, CDAR reported. Similarly, 30 percent of condo sales were distressed, down 6 percent from May a year ago.
Across Southern California, distressed properties and short sales accounted for 51.4 percent of resales in May, San Diego- based DataQuick Information Systems reported.
A bright spot in RealtyTrac's report on the Coachella Valley is that the number of new default notices — the first step in the foreclosure process — fell to 357 in May from 444 in May 2010.
The decline in the number of default notices in the valley is in line with national figures.
Total foreclosure filings nationwide fell 33 percent and hit a 42-month low in May, RealtyTrac reported. The number of new default notices fell 39 percent from a year ago to the lowest level since December 2006.
Still, there are more than 2 million homes nationwide in some stage of foreclosure, RealtyTrac reported, and another 2 million borrowers are more than 90 days past due or are in foreclosure.
California posted the nation's third-largest foreclosure rate with one in every 259 housing units receiving a foreclosure filing during May.
James Saccacio, chief executive of RealtyTrac, cautioned that as new foreclosure activity has declined steadily in recent months, the inventory of unsold bank-owned properties nationwide actually increased in April and May.
“That points to continued weak demand from buyers, making it tough for lenders to unload their ... inventory,” Saccacio said. “Even at a significantly lower level than a year ago, the new supply of bank-owned properties exceeds the amount being sold each month.”
There is also some concern among some housing industry analysts about the size of the “shadow inventory,” or homes ready for sale but that are being held off the market.
Santa Ana-based mortgage tracker CoreLogic, which calculates shadow inventory, said in its most recent report released Wednesday that national shadow inventory in April dropped to 1.7 million homes from 1.9 million a year ago.
CoreLogic's report said 1.7 million units represent a five months' supply of homes at the current rate of sales and that May's year-over-year decline reflects fewer newly delinquent loans.
Franklin doesn't believe the valley's shadow inventory is a major concern.
“The homes I've seen that have been foreclosed on have come back onto the market within two or three months,” about the time it takes to clean and fix them up, Franklin said.
Mike Perrault covers the real estate, financial and small business sectors. He can be reached at mike.perrault@thedesertsun.com or (760) 778-4529.
Foreclosure activity plummets
Total foreclosure activity fell in May compared to May 2010 in all communities but Indian Wells, where filings rose to 16 from 14.
92201, Indio: 129, -32.1%
92203, Indio: 89, -44.7%
92210, Indian Wells: 16, +14.3%
92211, Palm Desert: 44, -51.6%
92234, Cathedral City: 113, -38.2%
92236, Coachella: 73, -39.7%
92240, Desert Hot Springs: 125, -27.3%
92241, Desert Hot Springs: 14, -26.3%
92253, La Quinta: 112, -45.6%
92260, Palm Desert: 77, -7.2%
92262, Palm Springs: 100, -39.0%
92264, Palm Springs: 53, -29.3%
92270, Rancho Mirage: 54, -0.28%
92274, Thermal: 35, -7.9%
Coachella Valley total: 1,034, -35%
