The Agua Caliente Band of Cahuilla Indians plans to build a 10,000-seat arena in the heart of Palm Springs for ice hockey and live entertainment.
The new facility will be north of the tribe’s downtown casino and two blocks from the desert city’s main drag. The arena project will be developed on the tribal property north of the Agua Caliente Casino Palm Springs, generally between Amado Road on the south, Alejo Road on the north, Calle Encilia on the west, and Calle El Segundo on the east.
Tribal Chairman Jeff L. Grubbe said in a phone interview that the partnership was more than a year in the works and came about because Oak View Group was looking for a home for the expansion team. The Coachella Valley’s large number of winter residents from Canada made it a natural fit.
Tim Leiweke, CEO and co-founder of Oak View Group, said the projected cost of the arena, training center and hockey team is $250 million. Tribal Chairman Jeff L. Grubbe said the arena will be privately funded, exclusively by the tribe and Oak View Group.
Live Nation Entertainment also has signed on as a strategic partner with the project and will “supply the new arena with its large stable of top touring artists and premium live events,” according to a news release.
Grubbe said he doesn’t have details on what the arena would look like yet, and not to expect renderings any time soon. He did say that the arena would be state of the art and would fit in with the overall look of downtown Palm Springs.
Groundbreaking and construction is scheduled to begin in February 2020, according to the tribe. The arena is expected to open by fall 2021 in time for the hockey season.
The Coachella Valley Real Estate Market is Strong.
When we look at prices now compared to one year ago, we see that detached home prices are up 4.6% and attached home prices are up 7.3% from last year. Eight of Nine Valley cities saw a price increase.
The total number of sales have slowed a bit from last year, down about 5.3%. Detached homes were down about 4% while Attached homes, which saw a bigger price increase, has had a bigger dip in the number of sales, down about 7.6%.
When we look at the number of sales by Price Range, we see that the majority of the sales are between $200,000 – $500,000. The largest dip in number of sales is in the $800,000 – $1m price range, then picking up again over $1m. However, when we compare the number of sales year over year by price bracket, we see that the largest dip in the number of sales in 2019 was below $400,000. From $500,000 and up the number of sales were at about par over last year.
Currently there are about 3,600 homes listed for sale in the Valley, about the same as this time last year. This is a seasonal market; you can see the pattern on the chart below. We reach our lowest inventory levels in September every year and gradually increase to an annual peak in February and March.
Breaking down the inventory levels; it’s no surprise that the lowest inventory levels are in the $200,000 – $400,000 price range. The month’s supply starts climbing over $500,000. Based on the current number of homes listed for sale divided by the number of sales each month, if no new inventory entered the market, we see there is a 6 month supply in the $500,000 – $600,000 range. About a 7 month supply for homes priced between $700,000 – $900,000 and a 13 month supply for homes priced over $1m.
Based on price trends, the number of sales, inventory levels and low interest rates, we can say the Coachella Valley Real Estate Market is Strong. The trends we see suggest that we will continue to see a strong real estate market throughout 2019 and into 2020.
If you would like more detailed market information about your city, your community, or your home specifically, give us a ring – we’re on standby to help. (760) 218 – 5752
Palm Springs Modernism Week 2019 returns for another year to revel in the beautiful, simplistic Mid-Century Modern movement. Modernism Week 2019 is a 10-day celebration of all things Modern in the mecca of “MCM,” Palm Springs. This signature event happens every February, gathering tens-of-thousands of Modernism enthusiasts from around the world to celebrate the form in all its glory, from sleek architecture to iconic furniture and fashions. Over the week-plus, participants can check out a variety of home tours, the Modernism Show and Sale, lectures from prominent figures within Modernism, films on the subject, and more.
Palm Springs boasts one of the largest concentrations of Mid-Century Modern architecture in the world and is the perfect setting for Modernism Week each year. With the creative fingerprints of legendary names etched throughout the Valley, including Wexler, Neutra, Frey, and Schindler, Palm Springs has an embarrassment of riches when it comes to highly-coveted Mid-Century Modern homes and structures. Modernism Week 2019 embraces the form and celebrates its unique characteristics, and is a local event everyone should check out.
The Modernism Week Show House: The Christopher Kennedy Compound will showcase a refurbished midcentury home in the Indian Canyons neighborhood of Palm Springs, with 12 leading interior designers undertaking the redesign. Tours of the home will be offered daily.
On February 15, Modernism Week will host a special dedication ceremony on the Palm Springs Walk of Stars for acclaimed interior designer Arthur Elrod (1924-1974). Elrod’s former home will also be open for a home tour and evening cocktail party on Thursday, February 21.
One of Albert Frey’s most intact residential works, the Cree House in Cathedral City, has been meticulously preserved and restored to nearly its original 1955 condition. The home, never before seen by the public, will be available for daily tours during Modernism Week.
DESERT REAL ESTATE MARKET REPORT
2018 Year in Review
As we start 2019, it’s time to take look back at how the Desert Real Estate Market performed last year and look for developing trends.
In 2018, there were 5,836 single family home sales throughout the Coachella Valley. Those homes sold at an average of $610,300 and an average of $260. / Sq Ft. Homes that were priced correctly for the market, sold on average in 89 days. The highest sale price in 2018 was $12,000,000 for a home located in The Madison in La Quinta.
With those statistics, we compared 2018 sales to the previous year and found that while the number of sales were down slightly overall, (2%), Selling Prices were up 10% and the price / sq ft was up 8%. The time it took to sell was down 10% from the year prior. The highest priced home sale in 2017 was $8,700,000. for a home located in The Vintage Country Club in Indian Wells.
While prices are up, inventories remain low as compared to this time of season in years past. Historically when the inventory of homes for sale is low, prices tend to rise due to the pressures of supply and demand.
Interest rates also play an important role in how markets perform; rates are still low despite the fact that the Fed gave us 4 rate increases in 2018. As rates increase, buyers can afford less house for the same mortgage payment, which ultimately puts downward pressure on home prices.
But good news, rates pulled back a bit this week. Conforming loans, (up to $484,350) for a 30 year fixed rate is still just 4.47%.
The Coachella Valley has long been viewed as a destination for the soon to retire and already retired home buyers looking for an active lifestyle, but with the increase in mobile commuting, people can work from anywhere. We’re also seeing more young home buyers who are looking for a quality lifestyle, moving to the Desert full time. Easy Freeway and International Airport access makes that possible.
Combine the Lifestyle that only the Coachella Valley offers along with affordable home prices – the Valley is and will continue to be a destination for both full time residents, second home buyers and
We have a strong and steady real estate market here in the Coachella Valley.
If you would like more detailed information about your neighborhood specifically, drop me a line – we just finished our 2018 “Year in Review” Market Report, I’m happy to send you a copy.
Broker Associate with Bennion Deville Homes
The Real Estate Corner Desert Market Update
NUMBER OF SALES
Home sales are up Valley-wide. The total three-month sales are up 2.9%. On a city by city basis, six cities show higher sales, with three; Palm Desert, Desert Hot Springs and Palm Springs showing the largest increase in sales.
The three cities with the largest sales declines are Indio, Indian Wells and Cathedral City.
INVENTORY OF HOMES FOR SALE
While home sales are up, inventories are down. Typically our inventories dip to to their lowest point every year toward the end of September, but this year inventories are even lower.
Low inventory acts as both a positive and negative; it’s positive for sellers and future home sellers as it tends to move home prices higher. But, it’s also a negative in that low inventory puts the brakes on the number of sales. If interest rates continue to increase, that can put a damper on sales as the cost of borrowing money for a mortgage becomes more expensive.
MONTHS SUPPLY OF HOMES FOR SALE BY CITY
The month’s of supply ratio is down valley-wide compared to one year ago in every city. Most have less than 4 month supply except two; La Quinta which currently has a 4.5 month supply and Indian Wells with a 6 month supply of homes to sell.
MONTHS SUPPLY OF HOMES FOR SALE BY PRICE BRACKETS
When we look at the supply of homes by price category, we see the supply is lower across all price brackets compared to one year ago. The biggest change is homes priced above $800,000. Last year the higher price points were taking 7.5 months – 1 year to sell. Now, it’s taking on average 5.3 – 8 months
The tipping point when using this metric is 6 month’s. 6 months is considered a “Balanced Market”, not particularly favoring either Home Buyers or Home Sellers. Less than 6 months, the market is tipped in the Sellers favor, otherwise known as a “Sellers Market”. More than 6 month supply is viewed as a “Buyers Market”.
As home prices or the cost of buying a home, (rising interest rates), increase – sales will start to slow putting downward pressure on pricing. Markets are always in a state of flux, moving from one market to another and rarely stopping at “balanced” for long.
While there is typically a lag period between market shifts, the lag time is shorter as the number of sales are increasing. Home sellers quickly see an improving market and strive to maximize the price they can ask. When prices increase too fast or too far ahead of sales, potential home buyer’s become reluctant to make offers, fearing they could be buying at the peak.
DISCOUNT FROM ASKING PRICE
In 2018, when negotiating a sale price with buyers; home sellers are discounting their listed price an average of 2%. One year ago, sellers needed to discount an average 2.4% off their asking price to close a sale.
For example, this ratio means if a home is listed at $400,000 it’s selling at an average of 98% of their asking price, or $392,000. a discount of $8,000. This metric also shows a strong and improving real estate market here in the Desert.
When we look at the story each of these metrics are showing for the Desert Real Estate Market, we can see an improving but pretty balanced market. In addition, we can see that the market has had and continues to show sustained growth. Making now the right time to be a participant in the market.
The Desert Lifestyle is unlike any other, as we head into our season now is a great time see what the Desert has to offer. Check out these FAB Desert Homes!
Palm Springs Aerial Tram Road Challenge
October 27, 2018 starting at 7:00 a.m.
If you’re looking for a challenge, then this event is for you! The Palm Springs Aerial Tram Road Challenge 6K run / walk starts at 400 ft elevation and climbs to over 2,600 ft elevation. This is not your typical weekend 5k. This is the 32nd annual event with more than 1,500 participants from around the world come together each year to take the challenge.
Nestled at the base of the San Jacinto Mountains, Palm Springs is known for its crystal blue skies, year-round sunshine, palm tree lined streets and starry nights. Home to the Annual Palm Springs International Film Festival & Modernism Week, Palm Springs has fun & entertainment for all ages. Be a part of what makes Palm Springs the place to be, check out these FAB Homes for sale in Palm Springs
Halloween Chili Cook Off and Car Show at the Palm Springs Air Museum
October 27 from 11:00 – 2:00
Join the fun at the Palm Springs Air Museum’s 11th Annual Chili Cook-Off and Car Show. Volunteers from the Museum cook up their favorite recipes and you decide who’s is the best. It’s a goolish feast for the eyes and the tummy.
Palm Springs is known for its crystal blue skies, year-round sunshine, palm tree lined streets and starry nights. Home to the Annual Palm Springs International Film Festival & Modernism Week, Shopping, Fun and Entertainment for all ages. Be a part of the Palm Springs Lifestyle, check out these FAB homes in Palm Springs
Summer Desert Market Report – Median home prices rose for the 8th straight month. Up 9.6% from last year. The hottest cities for sales by volume were Palm Desert (233), Palm Springs (213), La Quinta (156), Indio (131), Rancho Mirage (97). Each city and each community has its own story some communities have seen huge growth, while others are relatively flat. The cities that had the largest price increases, have seen the number of sales flatten, which tells us that prices were getting ahead of the market.
Inventories are down again putting upward pressure on pricing. Overall the desert has seen a decline in the time it’s taking to sell, nicely presented homes in a good location and priced well are selling quickly. Currently there is a 3 month supply of homes for sale in the desert, which puts us in a “Sellers Market” as we head into season.
The Fed has indicated there will likely be two more interest rate increases before the end of the year, which could start to weigh on the market and slow sales until the shock is absorbed.
Southern California and specifically, the Coachella Valley continues to be a sought after destination for a second home get a way.
As we head into our “Season”, we expect to see continued strong home sales and price appreciation valley-wide.
How’s your neighborhood doing? Send me an email, I’ve got the details!
What is a 1031 Exchange and can it work for you?
Thanks to IRC Section 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property, and to defer capital gain taxes.
1031 EXCHANGE FOR REAL ESTATE INVESTORS – THE BENEFITS
Whether an investor’s property is owned free and clear or encumbered, the benefits of a tax deferred exchange can be significant. The tax dollars saved by doing an exchange can be used to buy additional investment property.
An investor who exchanges is able to defer the capital gain tax and buy a replacement property worth more than the investor who simply sells and reinvests with after tax dollars.
1031 Exchange for real estate investors provides one of the best tax strategies for preserving the value of an investment portfolio. By using an exchange, the investor is able to defer the recognition of capital gain taxes that would otherwise be due with the sale of an investment property. To qualify as an exchange the relinquished and replacement properties must be qualified “like-kind” properties and the transaction must be structured as an exchange.
1031 EXCHANGE FOR REAL ESTATE INVESTORS – NON TAX BENEFITS
In addition to deferring the capital gain tax, tax deferred exchanges provide the investor with a wide range of non-tax opportunities that may suit an investor’s portfolio
- Reposition assets
- Change property types
- Increase leverage
- Increase depreciation deduction
- Reduce management obligations
- Provide for estate and retirement planning
- Allow for relocation
- Improve cash flow
- Achieve property consolidation or diversification
- Eliminate or create joint ownership
THE EXCHANGE PROCESS
Most exchanges, involve three parties: the investor, (exchanger), who is doing the exchange, the buyer who is buying the exchanger’s old (relinquished) property, and the seller who is selling the exchanger a new (replacement) property. To create the exchange of assets and to obtain the benefit of the “Safe Harbor” protections of the tax code, it is wise to employ an Exchange Accomodator, or Exchange Facilitator. This qualified intermediary becomes a fourth party principal in both simultaneous and delayed exchanges.
The steps for completing an exchange are relatively simple with qualified intermediary:
- The exchanger signs a contract to sell a relinquished property to the buyer.
- Exchanger enters into an exchange agreement with a Qualified Intermediary and assigns rights in the sale contract to the intermediary, including the right to receive the exchange funds.
- At the closing of the relinquished property, the exchange funds are wired to the intermediary and the intermediary instructs the settlement officer to transfer the deed directly from the exchanger to the buyer.
- The exchanger has a maximum of 180 days in the exchange period to acquire all replacement property.
- Unless the exchanger can acquire all replacement property within the first 45 days from the close of the relinquished property, the exchanger must identify possible replacement properties in writing to the intermediary within the 45 day identification period.
- The exchanger signs a contract to buy the replacement property with the seller and the exchanger assigns the exchanger’s rights in the purchase contract to the intermediary.
- At the closing of the replacement property, the intermediary wires the exchange funds to complete the exchange and the intermediary instructs the settlement officer to transfer the deed directly from the seller to the exchanger.
As a general rule of thumb, to avoid paying capital gain taxes in an exchange, the investor should always attempt to:
- Buy a property of equal or greater value, (net sales price).
- Reinvest all of the net equity in replacement property
- Obtain equal or greater debt on replacement property.
*Exceptions: A reduction in debt can be offset with additional cash from exchanger, but increasing debt cannot offset a reduction in exchange equity.
Do you own an investment property and thinking about selling it to buy another that might have more cash flow or less management headaches? We can help. Give me a call or send me an email, let’s talk about what’s possible for your situation.
Cathi and Ben Walter
(760) 218 – 5752
Ever wonder how much income you need to buy an average home in other areas of the country?
@HowMuch.net just published a map showing How much income you need to buy the average home in each state in the U.S.
They collected average home prices for every state from Zillow and then plugged that information into a mortgage calculator to figure out monthly payments. The interest rates used varied from 4 to 5% depending on the market, a 10% down payment, and total cost of housing not exceeding more than 30% of gross income. Using this rule as the benchmark, they calculated the minimum salary required to afford the average home in each state.
The Top Three Places Where You Need the Highest Salaries to Afford the Average Home 1. Hawaii: $153,520 for a house worth $610,000 2. Washington, DC: $138,440 for a house worth $549,000 3. California: $120,120 for a house worth $499,900 Here’s a quick snapshot of housing affordability across the United States.
Home much income do you need to buy the average home in each state; Check it out!