Coachella Valley's New Housing Inventory Begins to Slowly Recover

Baby Boomers expected to constitute large segment of buyers



Vic Cooper of Market Watch LLC expects the new home market to return to its 20 percent level within the next two years.

Jim Powers

You’ve probably heard the statistic.

Since 2011, 10,000 Baby Boomers, or those born from 1946 to 1965, will retire every day until 2030, according to Pew Research Center.

Currently, Baby Boomers constitute 26 percent of the U.S. population, according to Pew.

But where is this huge wave of retirees going to live?

Right now the battle to obtain new housing in the Coachella Valley is fierce because there is very little new inventory. The economic recession starting in 2007 and the housing market collapse created an economic blockade to new construction.

Sun City Shadow Hills was the only housing development in the Coachella Valley to build through the recession due to demand, according to Vic Cooper of Market Watch LLC during its April 30 seminar in conjunction with Palm Springs Life at Villa Portofino in Palm Desert.

“We can only get 900 units of new home construction this year,” Cooper said. “The Baby Boom market will put an increase demand on the new home market and there will be no supply out there to match that demand.”

But that picture is very slowly starting to change. Julie Miller, event director at Villa Portofino, reported that 23 houses in the $200,000-plus range were sold in the last 30 days at the 55-plus active adult community.

Cooper indicated the normal housing market ratio is 80 percent resale homes and 20 percent new homes. New homes fell to 6 percent over the last five years, Cooper said, but in just the first quarter of 2013, the figure jumped to 11 percent with 250 new home sales.

“That is a trend we expect to continue to happen until we get back to 20 percent, and that will take about two years because builders can’t get the supply on the market,” Cooper said.

Resale prices are also showing an increase during the first quarter as the number of foreclosures and short sales have decreased to just 3 percent of the market. The Coachella Valley’s median price per square foot rose 8.4 percent to $140 or just 6.4 percent from the 2013 projected target of $150 per square foot, Cooper said.

However, there are still cities struggling to catch up. Coachella, Indian Wells and Palm Springs are below the square footage marks of a year ago.

In addition, Cooper said the coastal market has returned to full price from where it was before the recession.

“As feeder markets to the Coachella Valley continue to return equity, some of the coastal markets like Newport Beach and parts of Los Angeles are already exceeding or past the historical highs of 2007. So the amount of fuel that can enter the market out here in terms of equity will continue to just expand hugely.”

Add your comment:
Edit Module
Desert Guide
Edit ModuleShow Tags

Related Articles

Bill Clinton Outlines Community Health Initiatives in Palm Springs

Former President Bill Clinton spoke on the importance of special initiatives to improve the health and wellness of the Coachella Valley as part of the Clinton Health Matters Initiative Blueprint for Action.

Modernism Week Peaks Interest in Palm Springs Midcentury Home Market

With Modernism Week swiftly approaching, this is the ideal time to spotlight some classic midcentury modern homes on the market starting with a 1959 home in Palm Springs designed by Charles Dubois along with William Krisel and Dan Palmer.

Wondrous Waters

Soak, relax, and rejuvenate in California's Spa City.

La Quinta Artist Creates Colorful Splash for Southwest Arts Festival Poster

Dennis Nagatani’s cascade of colors falling from different directions will be the eye-catching cover for the 29th Annual Southwest Arts Festival, Jan. 23-25, at the Empire Polo Club in Indio.

18@TWINPALMS Offers Midcentury Modern Influence with 21st Century Tech

Palm Springs Modern Homes has just broken ground on 18@TWINPALMS, which will include 18 single-family, one-story detached Modernist homes in Palm Springs.
Edit ModuleShow Tags

Promotions + Contests

Fashionista Friends

Fashionista Friends

Experience the glitz and glamour of Fashion Week El Paseo 2015.
2014/15 Best of the Best

2014/15 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.
GuestLife Magical Monterey Bay Experience

GuestLife Magical Monterey Bay Experience

Food + Wine Festival Grand Experience

Food + Wine Festival Grand Experience

Enter for a Chance to Win a Food + Wine Festival Palm Desert 2015 Grand Experience
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.
Edit ModuleShow Tags