The Coachella Valley's real estate market, like California's, has indeed recovered and has been in a "recovery mode" for some time, real estate economist Leslie Appleton-Young told The California Desert Association of REALTORS® April 17.
Speaking before more than 250 Realtors and industry representatives at Indian Wells Country Club, Appleton-Young, chief economist for the statewide California Association of Realtors, said the market is "rebalancing" and that correct pricing of a home for sale is critical especially since the inventory of homes for sale is low across California.
She said the slight cooling of sales and price increases is a way to "put on the brakes of our hyper frenetic market the past few months."
She noted that the median price of a home in Riverside County was $222,240 in 2012 up 10.8 percent over 2011. Sales of existing homes in Riverside County was .7 percent over the previous year.
"The sustainability of the housing market going forward depends on the strength of economic growth, household formation and job creation," Appleton-Young said.
She said the inventory of homes available for sale is 10 to 20 percent statewide but still far below normal. Appleton-Young also noted that the share of first time homebuyers statewide, at 28 percent, is the lowest since 2006. She said it should be at least 50 percent to get first-time buyers on the homeownership ladder.
The number of multiple offers in home sales statewide is the highest in at least 15 years.
""Housing 'un-affordability' is starting to impact the market," she said, but noted there is growing demand for homes, especially new homes, in California. She forecast a slight increase in mortgage rates will impact the affordability of buying a home. Appleton-Young pointed out that any tax reform of the mortgage interest deduction is "off the table for now."
"I think we will be seeing a (new) housing boom over the next three to five years," she said, because the lack of new homes has impacted the housing market over the past six years.
Leslie Appleton also noted that the number of homeowners underwater with their mortgage have dropped considerably statewide, including the Coachella Valley.
She also had tips for Realtors who need to educate buyers, especially first time buyers, on the intricacies of homeownership economics. such as:
- Financial Literacy: How to manage their finances
- What about student-loan debt?
- How to save for a down payment and how much?
- What programs are available?
- Fewer than 1% of buyers utilize down payment assistance programs
Sharon Rogers, president of CDAR, said Appleton-Young's comprehensive PowerPoint presentation is available to CDAR members now on the organization's website www.CalDesertRealtors.org