Residential Real Estate Coachella Valley Resort cities and the High Desert

Barry Noble Predicts September 2007 through March 2008.

(C) 2007 Barry Noble, all rights reserved.

September 2007: I am of the opinion there will be steady but much slower, almost the old "normal" Residential Real Estate sales here in the Coachella Valley BUT the dynamic has dramatically changed - a "Normal Market" is in the offing for 12 to 18+ months, despite dire predictions about sub-primes and foreclosures. As the current 07-08 new high season approaches, a Market of a moderate number of residential sales with a notable decline in inflationary property values is "normal" to the ever active Real Estate cycle, made somewhat tighter by the general economic downturns affected by sub-prime lending woes. This may not be what real estate sellers and their agents want to hear, after these past several years of wild sales and notably inflating values. Foreclosures will greatly increase through 2008, unless something drastic is accomplished in the lending industry to help those homeowners who might survive, with some mortgage assistance. Overall, the foreclosures debacle should not adversely affect most of the retirement and second home residential market.

So, who will be purchasing? The highest number of buyers will come from the very fast growing, middle class "boomer" second home and retirement market with, most importantly, cash to put down and good credit. They will buy primarily in Palm Springs, Palm Desert, and La Quinta and, possibly and surprisingly, Yucca Valley - one of the Top Ten California Cities touted for retirement in 2007. (Aside: Look for the next five years to be a big boost to Yucca Valley and Joshua Tree).

Also, the gay second home and retirement groups, with, again, good credit and down-payments, will continue to seek and buy homes in primarily in Palm Springs, Rancho Mirage and Cathedral City. They too will be approaching it as a "Buyer's Market" and looking for real bargains, as their primary homes to the North, South West and East will all be hurt by their own local price declines.

Another local Market to pay a lot more attention to is the Hispanic Market - throughout the Coachella Valley. They will buy in all levels of value and are Buyers to be courted and many remain very loyal to honest real estate professionals for future business and referrals.

A smaller group of buyers - but a group with much clout, is that of the high-end home buyers. They were not necessarily hurt by Sub-Prime loans, unless, perhaps, they invested in those now struggling lending companies, however, don't make the mistake of not understanding that they too will be looking at the Market as a "Buyer's Market" and shying away from inflated pricing. There will be few wealthy buyers looking for "high end fixers". The high end buyers are more and more looking for the extraordinary, the largest, and the unusual and ultimate luxury offerings. It is almost a competition now to have the biggest and the best - in a new Gilded Age for those who can afford it.

Overall, the sales will be fewer, but those sellers who realize the Market is waterlogged (in the desert?), with a flash flood of houses and condos for sale, and who bring their homes down to below neighborhoods current Market values - and who are selling retrofitted or updated homes - will find a strong Market - the others will continue to clutter the MLS with over priced offerings. It is not a good time for "fixer" homes - as the "investors" are "gun shy" and can't see inflated profits in the offing, three to six months from now for their retrofits. Offered "fixers" will have to be at an exciting low price against comparable fixers in the area, and those "fixers" should only be unusual or notably special architectural gems - of historical interest or in a highly sought after neighborhood.

Hurting will be the Orange County-like tracts, on the outskirts of most Coachella Valley wide cities - and the "Higher-End " developments in early and mid phases of development, Some foreclosures and "desperation" sales will hurt, plus many developers are going to hold back on completing later phases until the Market turns again. Some major builders have already started "selling off" final phases in notable developments - much to the chagrin of the buyers who closed within the past 6 months, as they see their home models selling up to 20% lower than they recently paid. Others are pricing their models "down" or either adding incentives in the base prices, or down grading the interior features to soften prices.

I so enjoy living in the Southern California desert resorts area and have been working here almost 18 years. I've seen the up and down Real Estate cycles first hand, both here and in the greater Los Angeles area. I predicted the current sub-prime problems, over 18 months ago, even when many didn't want to hear about it.

Caveat: These predictions assume the "San Andreas faultline" earthquake doesn't adversely affect the Coachella Valley in the next 18 months period. Unfortunately, I can't claim abilities to predict that event.

Barry Noble

Copyright 2007 Barry Noble, all rights reserved

www.FastAppraisalValue.com

barry@PalmSpringsCA.com

Office: (760) 992-9523

Fax: (760) 327-4119

Barry Noble is a Coachella Valley local State Of California Licensed Real Estate Appraiser and independent Broker, who has been appraising residential real estate in the Coachella Valley and high desert around Yucca Valley for almost 18 years. Prior to that, he appraised residential properties in the greater Los Angeles area. He lives in and works out of Palm Springs and can be reached at www.fastappraisalvalue.com.