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Category Archives: Coachella/Imperial Valleys
California Division: 2012 Year in Review
Source: Tom Reimers, President, (949) 852-8288 x28
Greener Fairways In Coachella Valley’s Future!
What does a $20M pledge for a new medical school, the opening of a privately-funded law school, and a new four-year undergraduate degree program all have in common?
Answer: The Coachella Valley – All of these bright new developments are occurring NOW within the Coachella Valley!
The Coachella Valley can also boast:
- Two new private homebuilders have entered the sub-market;
- Several public homebuilders have closed on multiple finished lot opportunities; and
- A 25-year real estate veteran backed by “New York money” has closed on and currently entitling a 7,800 unit community
Home Sales Activity
New home sales: Toll Brothers experienced five sales at its new Alta project, located in South Palm Springs, within the first month of its opening! By selling homes with a price point range from the mid-$700,000’s to the mid-$800,000’s, Toll Brothers is demonstrating how the high-end home market is returning to the Coachella Valley.
Home Resales: According to MarketWatch, resale home prices have risen 13% since September 2011. For the first time in years, resale inventory is below 4,000 homes and number of months supply is under four months. Last year in April, over 5,700 homes were on the market (approximately 5.7 months of inventory). While prices are still low, both sales pricing and absorption are heading in the right direction!
Noteworthy Permit Activity
The City of Rancho Mirage has issued more new home permits so far this year than all new home permits issued in the City in 2010 and 2011 combined!
In case you missed it:
Stone James led a panel discussion on land in April at the Desert Valleys Building Association’s economic update, “Cut to the Chase for 2012: Our Economic Future.” The topics and insight generated from the panel discussion are well-summarized and quoted in an article by Mike Perrault at The Desert Sun (via MyDesert.com). Read the article to see what Stone and his fellow real estate experts had to say: Panel: Housing the Best Bet for New Growth.
Source: Stone James, Marketing Consultant, (760) 219-7227
Coachella/Imperial Team Sells ±1,700 Residential Lots in El Centro
Land Advisors Organization – California Division is pleased to announce the closing of “Lerno Verhagen,” a ±516-acre planned community within the City of El Centro, County of Imperial. The property was sold in its current condition as active farmland, with an approved specific plan for ±1,700 dwelling units.
Land Advisors’ Coachella/Imperial Team, which is based out of the firm’s Palm Desert office, represented the buyer (private investor) and the seller (lender) in the transaction.
With several other sizable Imperial Valley transactions already under its belt, the Coachella/Imperial Team was able to drive value for the seller by leveraging its knowledge of the submarket and access its extensive yet focused network of key industry relationships.
“Given the prime location of this asset, this transaction was a tremendous ‘win/win’ for both buyer and seller,” stated Land Advisors Marketing Consultant, Stone James. “Imperial County is a terrific submarket for farmers and long-term land developers.” He explained how the region is home to significant farming operations as well as several critical governmental organizations such as U.S. Border Patrol, U.S. Immigration and Customs Enforcement (I.C.E.), and the California Department of Corrections.
Coachella Valley: 1, 2, 3… Cha Cha Cha…
Some impressive numbers are driving growth within the Coachella Valley. 10,000… 300,000… and 3,600,000… According to the Social Security Administration, these are the numbers of Baby Boomers who are turning 65 years old each day, each month and each year, respectively, for the next 19 years!
Ranked by CNN Money.com as the second Best Retirement Destination in the United States, Palm Springs (and the rest of the Coachella Valley) is experiencing growth and demand today not seen in many other markets across the US.
From a land investment perspective, demand and activity within the Coachella Valley and Imperial Valley is decidedly picking up.
- Toll Brothers is demonstrating that selling new homes in the Coachella Valley for $740,000 IS possible. The Nation’s top luxury homebuilder sold FIVE homes in its first month of sales at their new Alta project in Palm Springs.
- With the majority of the finished lot opportunities spoken for within the Valley, interest in entitled but undeveloped land is picking up.
- D.R. Horton is having success finding qualified home buyers for Renaissance at the Gallery in Palm Desert. With homes ranging from $269,990 to $355,000 the community is at about 50% build-out and is seeing increased interest from potential buyers.
- In 2011 the volume of resale home transactions within the Coachella Valley was 96% of the 2004 market peak (7,275 vs. 7,574). Conversely, 2011 new home building permits are at the lowest levels since before 1983 according to Marketwatch, LLC.
CLOSED DEAL IN IMPERIAL CO.! The Coachella/Imperial Team (Stone James & David Landes) represented the buyer (investor) and the seller (lender) in the sale of 222 acres of prime farmland located within Brawley city limits. This Imperial County buy-and-hold asset has an approved Specific Plan for 1,149 residential units. Contact Stone or David for more details on the deal.
Source: Stone James, Marketing Consultant, (760) 219-7227
Has “Winter” Gone Missing In The Imperial Valley?
Across the Nation, winter months usher in colder temperatures, fewer transactions and expanding waistlines. In the Coachella and Imperial Valleys, Land Advisors is keeping the heat up and pressure on by closing 240 detached condo pads, 222 acres of prime residentially-entitled “Ag” land, and placing over 500 acres of prime “path-of-growth” farm land under contract!
In 2011, the Coachella Valley and Imperial Valley sub-markets appealed to private investors looking to buy unimproved land for long-term holds. As we round the corner into 2012, the homebuilding market is beginning to show signs of recovery, and some reports indicate that housing is making a comeback. That being said, returns on long term plays for land buyers might not be as far out as initially thought.
CNBC recently reported that homebuyers are jumping back into second home purchases… Good news for the Coachella Valley sub-market, where secondary residences are a high percentage of home ownership. CNBC Video: Investing in Second Homes
Source: Stone James, Marketing Consultant, (760) 219-7227
BINGO! Improvements & Approvals Scootin’ Along in the Coachella Valley
In anticipation of the significant growth economists are projecting for the Coachella Valley in the coming years, several major infrastructure improvements within the Valley are nearing completion. These projects, which include freeway over-passes and major roadway improvements located along Interstate 10, Highway 111 and Cook Street, will finally improve traffic flow and accessibility for local residents and businesses. The side effect is that it is also improving certain property values as accessibility is improved!
Measure J passed this week in the City of Palm Springs. The controversial measure will increase the City’s sales tax by 1 percentage point to 8.75% next year, which is among the highest in Riverside County. The tax will be levied through 2037 and will bolster the City’s general fund by $200 million. The City plans to use the money to improve and “reinvent” the downtown area.
Global Investments just celebrated the sale of its final standing inventory home at its hillside project in La Quinta, Estates at Point Happy. Global achieved an average sales price of over $625,000 per home, or an average of $200 per square foot. With 29 finished view lots remaining, Global Investments is well-positioned for the foreseeable market recovery.
The City of Indio recently approved an 8-acre mixed-use senior project located along the western portion of Highway 111. With a $20 million initial investment, and an ultimate investment of over $100 million occurring over the next five years, this project is slated to generate 150 construction jobs and upwards of 250 total jobs upon completion. This western portion of Highway 111 has become a grand entrance into Indio as City leaders continue to work with developers looking to capitalize on this area’s diverse customer base, great accessibility, high traffic counts, and popular local amenities.
Source: Stone James, Marketing Consultant, (760) 219-7227
CLEAR! We have a pulse in the Coachella Valley!
The Coachella Valley, once known as the “last to arrive and the first to leave” any housing market ‘party,’ is alive and kicking again with significant investment and development from homebuilders and investors.
Toll Brothers, in its first acquisition since Stone Creek Ranch in 2005, recently purchased two partially built projects which are now going vertical! These projects are located in Palm Springs and Rancho Mirage.
Another public builder closed on some well-located lots in North Palm Desert.
Two private builders, Far West Industries and Alta Verde Group, are joining the ranks of top builders within the Coachella Valley. The folks at Far West have started construction on Luminaire in Palm Springs and have also picked up other well located assets recently. Beverly Hills-based Alta Verde Group is in the process of going vertical on lots within Escena in Palm Springs in addition to a partially built project in La Quinta.
Local Coachella Valley builders are also showing their resilience and dedication… Family Development is working through sales at the beautiful Villa Portofino active adult project in Palm Desert.
Investors who acknowledge the Coachella Valley as one of the top retirement destinations nationally are taking advantage of low land prices, and are scooping up some terrific residential land opportunities.
Quick demographic fact: The Coachella Valley is one of the fastest-growing areas in the U.S. due in part to its location in Riverside County, and also to real estate booms in the 1970s to 1990s. State projections estimate that the Coachella Valley’s population will pass 700,000 by the year 2020, and one million by 2035. Demographers believe the total population already surpassed the 500,000 mark. This number does not include the additional 100,000 temporary seasonal residents known as “snowbirds” who arrive to stay during the winter months (from the end of October to the end of April). Source: Riverside County Projects 2006 and Land Advisors Research
Source: Stone James, Marketing Consultant, (760) 219-7227
Coachella Valley: Greater than the Peak?!
Coachella Valley FAST FACTS:
- The number of resale home transactions in the Coachella Valley in 2010 was greater than the number of resale home transactions at the peak of the market in 2004. At one time in 2010, the Coachella Valley represented almost 20% of all building permit activity throughout the Inland Empire.
- A public homebuilder recently purchased 49 more single family lots within the “Gallery” development located in North Palm Desert due to the community’s growing home sales.
- In the last week, Land Advisors closed two deals in the Coachella Valley, zoned for either commercial or multi-family use.
Stone James (760) 219-7227, Land Advisors’ Marketing Consultant covering the Coachella Valley sub-market, is seeing a substantial increase in land market activity in 2011, compared with the second half of 2010. Investors are realizing that while values within the Valley are at their lowest point in close to a decade, end user demand is making a comeback!
Stone is currently marketing three unique land projects in the Coachella Valley in varying stages of development. You can read more about these featured listings in the California Division’s Quarterly Newsletter.
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