Coachella Valley's Home Buyer Number at All-Time High

Market Watch LLC forecast shows 'positive kiss' to median price as distressed market evaporates



Mike McDonald of Market Watch LLC said as the number of foreclosed homes disappears, the Coachella Valley will see a 14 percent bump in housing values during the Jan. 24 seminar at the Toscana Country Club in Indian Wells.

Gregg Felsen

There has never been a better time to buy a home than now in the Coachella Valley, and the number of people who can afford to be buyers has never been higher, according to a real estate forecast by Market Watch LLC during its Jan. 24 seminar in conjunction with Palm Springs Life at the Toscana Country Club in Indian Wells.

Mike McDonald, partner in Market Watch LLC, said the combination of continued low interest rates (under 4 percent) and data that indicates an all-time high of more than 60 percent of Riverside County residents can afford to buy a house have created favorable market conditions.

“The fact that interest rates are so low, more people can buy the average home than at any other time in history,” McDonald said. “That’s demand. That’s a constant thing. They are going to be looking. Demand will be constantly high.”

However, the supply of available housing has conversely begun to shrink. Two years ago, McDonald said, 60 percent of house sales were from distressed homes (foreclosures). That number fell to 50 percent last year and currently it’s near 30 percent.

“The projection is that it will be below 10 percent by the end of this year,” McDonald said. “This foreclosure issue will be gone by the end of this year.”

Current homeowners will be happy to know that the lack of foreclosures on the market will generate a “positive kiss” to the value of their home, McDonald said.

“If we get rid of all distressed sales this year given no change in anybody’s home price, you’re going to get a 14 percent rise in the median price,” McDonald said.

In addition, Market Watch LLC’s forecast shows an 80 percent gain in home prices over a three-year period from 2012-14, noting 1,320 home sales in 2013 followed by 2,800 in 2014.

“We think the demand will be there, but will the supply be there?” McDonald said.

New home sales fell dramatically during the recession, peaking at 34 percent of home sales in 2004 before starting to slide in 2007 to 24 percent and bottoming out at 5 percent to 6 percent the last two years.

“Builders couldn’t produce new homes at a price that was competitive with the distressed and resale markets,” said Vic Cooper, partner with McDonald at Market Watch LLC. “The prices of new homes that were built went into foreclosure, so someone could come in and buy a foreclosed home at much less than building a new home. It can’t stay there forever.”

Market Watch LLC expects the new home market to bounce back to 20 percent by 2014.

“That’s when builders will see the foreclosure market is gone, the median price of housing has risen and finance companies will start giving up the money easier,” McDonald said.

Add your comment:
Desert Guide

Related Articles

H3K Design Restores Midcentury Splendor to Palm Springs Home

Howard Hawkes and Kevin Kemper of H3K Design have restored a Palm Springs home in the Twin Palms neighborhood back to its original midcentury splendor, but in a very 21st-century fashion.

Watch Our Top 10 Palm Springs Hotel Videos

Watch our videos to discover what the hotel options are in the Greater Palm Springs area from well-known big names to small, boutique hotels.

The Palm Springs Hotel Continues Boutique Resurgence

The Palm Springs Hotel, set to open this fall, will bring an industrial take on midcentury modern design in North Palm Springs.

10 Things to Do in Greater Palm Springs This Weekend

Palm Springs Life helps plan out your weekend in Palm Springs and the desert resort cities with concerts, events, restaurants, nightlife, clubs and the world of entertainment only found in the desert.

Cool Jazz on a Hot Summer Day at Mission Hills Country Club

A hot summer day was the perfect time for more than 150 supporters of ACT for Multiple Sclerosis to gather at Mission Hills Country Club for cool jazz.

Promotions + Contests

90 Days of Summer Romantic Palm Springs Getaway 2014

90 Days of Summer Romantic Palm Springs Getaway 2014

Experience the beauty, romance and excitement of the Palm Springs area when you enter to be the lucky winner of this romantic couple’s getaway
90 DAYS OF SUMMER Instagram Contest 2014

90 DAYS OF SUMMER Instagram Contest 2014

Win a fabulous Palm Springs weekend!

Win a fabulous Palm Springs weekend!

Each month, a first place winner will be selected to win a fabulous Palm Springs weekend!And, each month, three additional runners up will be selected to win a wonderful Palm Springs area Dining certificate!
2013/14 Best of the Best

2013/14 Best of the Best

Palm Springs Life’s annual Best of the Best. Readers tell us who their choice is for the “Best of the Best” of the Coachella Valley in over 40 categories.
Cartoon Caption Contest

Cartoon Caption Contest

Each month, we provide a vintage 1950’s cartoon illustrated by Alice Rovinsky. You are invited to submit a caption or vote for your favorite caption.
Pets on Parade 2014 Photo Contest

Pets on Parade 2014 Photo Contest

Enter your “Cutest Pet” photo in the Pets on Parade 2014 Photo Contest. Online users will be able to like the Cutest Pet photos from six (6) categories.