What Your Money Buys Now

Hint: The real estate market is a gold mine for deals

PGA West, La Quinta


With Palm Springs house prices down 30 to 50 percent across the Coachella Valley, savvy buyers with hard cash and platinum credit have been snapping up prime properties that were likely beyond their price range four years ago. Calgary car dealer Gary Sartorio and his wife, Barbara, for example, scored a great deal at Mirada in Rancho Mirage. The sprawling-view house in 2006 would have sold for well above $3 million. Sartorio bought it furnished for a million less.

“We heard about the buying power here combined with our strong Canadian dollar,” Gary says. “We saw 12 homes in a day and a half and fell in love with this. We didn’t think it was within our budget, but then put the pencil to it and got a great deal.”    

Deals span as wide as the stunning views — from moderately priced houses in La Quinta Cove to luxurious Las Palmas estates. And the best values are in short sales, says Harvey Katofsky, president and CEO of HK Lane Real Estate in La Quinta.

Historically, short sales take months to close — a deal-breaker for some buyers. Now, Katofsky says, “Lenders are holding back on foreclosing and doing short sales where they don’t have to own the properties. We are actually dealing with a lender who has a new program for short sales where they are closing them in 60 days. A few banks now have a dedicated employee go to the property once an offer is submitted and verify that it’s an acceptable price. The goal is to get these properties sold and off the market.”

Attractive foreclosures garner multiple offers, driving sale prices higher than listing prices. That’s good news; it signals market movement.   

“According to the California Association of Realtors, we are entering the fifth year of this market shift,” says Greg Berkemer, the association’s executive director. “Prices started to drop in the second quarter of 2005. This market fallout was different from any in history. It collapsed from the bottom up when the cheapest homes stopped selling.”

Similarly, fixing the market starts from the bottom. “Eight-five percent of all sales are in the $350,000-and-below range right now,” Katofsky says.

Harry Sterling, an agent with Coldwell Banker in Palm Springs, sees many
Canadian buyers with cash. “They account for about 50 percent of the sales in my office,” he says. “Also over the last few months, investors are coming back into the market, buying second homes.”  

El Paseo Bank recently launched a mortgage division. “The mortgage market has returned to the traditional standards of lending from 15 years ago,” says Andy Montgomery, chairman and CEO. Like the “old” days, borrowers must show they can pay back the loan. “To obtain a mortgage today, it takes an excellent FICO score, cash flow or income, and a down payment, depending on the amount of financing needed,” Montgomery explains.

$250,000 and Less
Indian Creek, on Highway 74 in Palm Desert, is an   older, no-frills condominium. A recent sale there hit a low of $62,500. At the market peak, prices topped $215,000. “These are short sales, and investors are coming in with cash,” Katofsky says.

For $250,000, Ron Lindemann of Windermere in Palm Desert finds good value in Palm Springs’ foreclosures. “You can actually get a midcentury modern home that needs work in this price range. They went for twice as much during the peak.”

There are deals also in new construction. A one-bedroom condo at Biltmore Colony in Palm Springs is listed for $167,000. The price was twice that three years ago when the project was first marketed. Head over to Mesquite Country Club and a two-bedroom, furnished unit listed at $199,000 would have fetched more than $300,000 in 2005.

According to Gene Darr, managing broker of HK Lane, $250,000 will buy you a 1,500- to 2,000-square-foot home in La Quinta Cove. During the height of the market, you would have easily paid another $100,000.

$350,000 to $750,000
One recent Rancho Mirage buyer saw a lakefront unit at Lake Mirage listed for $500,000. “We offered $320,000 — all cash with a 30-day escrow,” he says. He also sold a home in south Palm Desert’s The Summit for $540,000. Four years before, he listed it for $799,000. “We have all learned you can’t look at a home as an investment any longer, but as a place to live for years.” 

Beverly Bell, a veteran desert broker at HK Lane, has seen it all. “The hardest message to deliver to my sellers who bought from me several years ago is how little equity, if any, they have in their home and what the listing price should be if they need to sell.” Bell recently sold a remodeled three-bedroom house with a pool in south Palm Desert’s desirable Silver Spur Ranch for $360,000. “I know it would have gone for a few hundred thousand more before,” says Bell, who also recently closed “the buy of the century” in south Palm Springs. She sold a bank foreclosure in the Canyon Country Club area. Totally remodeled with $5,000 toilets and a $150,000 kitchen, it sat for several years at $1.65 million. Bell’s client offered $750,000, and the bank accepted.

“There’s great value throughout La Quinta. If you like a particular area, you can now get in at various price points,” Darr says. Take Santa Rosa Cove, an older, gated community of freestanding bungalows and tennis villas adjacent to La Quinta Resort & Club. Prices in 2006 averaged around $650,000. Today, sellers are having trouble selling for $450,000. Hidden Canyon, tucked against the mountains near La Quinta Resort, offers several short sales. When built during the market heyday, these large family homes hit the high $900,000s. Today, you can buy in the low $700,000s.

$750,000 to $999,000
According to Bell, in the 242-acre luxury equestrian community of Griffin Ranch in La Quinta, one estate house that originally listed at $875,000 re-cently sold for $615,000. Palmilla, also in La Quinta, features a seven-acre lake. Prices for these contem-poraries are down about 30 percent from 2006. Make a deal for between $750,000 to $1 million, depending on size, view, and on- or off-water location. In Palm Springs’ rugged Chino Canyon on the north side of town, a two-bedroom, two-bath house that cost $800,000 in 2005 and was recently remodeled and expanded sold for $700,000.

Because of the cachet of an Old Las Palmas address in Palm Springs, prices dropped less dramatically there. However, a 4,951-square-foot house that went for $1,660,000 in 2005 sold in late 2009 for $1,205,000.

As we move forward, let’s hope that liar loans and the insanity that contributed to the market plunging is a thing of the past. Meanwhile, grab your cash and good credit rating and take advantage of the values before the market turns again.

Comments to this website are moderated by staff. While all comments are welcome, we encourage all to be polite and please do use this system for advertising or business promotions. Any complaint towards a business or service should be directed directly to that business and not posted here. If anyone has a complaint that a comment is defamatory, please contact me at tmay@palmspringslife.com and I will take appropriate action promptly. Thank You

Add your comment:
Palm Springs Life

Related Articles

Modernism Week's Fall Preview Tickets on Sale Starting Aug. 1

Tickets go on sale Aug. 1 for Modernism Week's Fall Preview, Oct. 10-13, in Palm Springs over the Columbus Day holiday weekend.

Color Play

In the tony Thunderbird Heights neighborhood of Rancho Mirage — which has counted Gerald Ford, Anne Rice, and Michael S. Smith among its residents — sits a decidedly down-to-earth classic 1960s ranch house.

Home of the Month: Palatial Retreat

Sitting on 1.23 acres in The Renaissance at Clancy Lane in Rancho Mirage, the 9,500-square-foot home boasts picturesque, 360-degree mountain views.

Getting Back on Track

Housing prices continued to inch up in May for the seventh consecutive month, even as sales continued on a year-over-year decline.

Escena Golf Club Offers Room With a View, Combined Living Space

The Panorama Home at Escena Golf Club in Palm Springs combines the living, dining, and kitchen space with breath-taking views of the San Jacinto Mountains.

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.