The uncertainty in the financial markets and the ongoing foreclosure problems have continued to drive housing prices down. Any increase in homes sold is a direct result of home buyers taking advantage of low prices. Los Angeles and Orange counties are now experiencing the double digit decrease in home prices experienced by other Southern California counties. A great deal is riding on the success of the economic recovery package proposed by the new administration.
Sun City Palm Desert SCPD homes have held their values when compared to the rest of the Coachella Valley. While valley home prices decreased 46% in the 4th quarter, SCPD only experienced a 18% decrease. Even in affluent towns the median prices were down significantly. La Quinta median prices were down 46% and Rancho Mirage 29%*. Foreclosures have been minimal in SCPD. Only two bank owned homes were sold during the 4th quarter and only 8 of the 186 active listings are distressed properties. Values on many of the distressed properties are not as good as some from the regular inventory.
Sun City Shadow Hills Sellers of smaller homes have to contend with a very aggressive Pulte Corp. which now has six new models, some under $200,000. They are also dealing on existing inventory of smaller models well under $200,000. In the new models Pulte has removed some of the costly upgrades in order to get the asking price as low as possible. They anticipate the buyers will put in the upgrades once they have seen the other models. Compared to the rest of the valley, foreclosures represent a smaller portion of homes sold in the 4th quarter as well as homes for sale. In other parts of the valley, foreclosures represent more than 50% of the sales and 25% of the inventory. We have seen an increase in the number of buyers in January ready to buy in Sun City —very encouraging!
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