Dear Homeowner:

This is the latest addition of the Indian Wells Real Estate Minute newsletter by Grand Luxury Properties.  We look forward to a great 2012 Season, and having you here in the beautiful Desert! I hope you enjoy reading the 2011 Total Home Sales Report for Indian Wells and the Indian Wells Country Club, along with Historical facts about our great city. Also, included is an interesting and positive news article published by the Washington Post Bloomberg in Business section on December 20, 2011 titled Is the Housing Market on the Rebound?

All the Best in the New Year,

Sue Ellen and Bob Ross
Brokers/ Owner Grand Luxury Properties
Sue Ellen’s cell: 760.612.7236               Bob’s cell:760.409.1595
SueEllen@grandluxuryproperties.info" data-mce-href="mailto:SueEllen@grandluxuryproperties.info">SueEllen@grandluxuryproperties.info Bob@grandluxuryproperties.info" data-mce-href="mailto:Bob@grandluxuryproperties.info">Bob@grandluxuryproperties.info

Indian Wells Real Estate Minute
Indian Wells Yearly Sales Report
January 1 - December 31, 2011

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales

These sales figures are deemed reliable, but not guaranteed from the Desert Area Multiple Listing System

Did you know?

The former Cavanagh Adobe home that you see on Cook Street south of Hwy 111 is currently undergoing restoration by owners Michael and Diane Burch, architects. They purchased the home a few years back from Don Hutton who lived there with his wife for over 20 years. There were several owners before this period of time. Two smaller homes behind the main home were also Mr. Cavanagh’s dwellings and they had fallen to disrepair and were demolished. The developers who bought this parcel eventually built the beautiful residential community which is now The Province. There are only a few of the original date trees on Cook Street. Anything left of the Cook family buildings were demolished many years ago for residential and commercial use…..

To be continued…Courtesy of Indian Wells Historic Preservation Foundation and Coachella Valley History Museum

Is Housing Bouncing Back?

December 20th, 2011 By Neil Irwin

The deeply depressed housing sector finally seems to have found its bottom — and may even be starting to bounce back.

A wide range of housing indicators — construction, home sales, prices — have stabilized in the past few months, although they remain at historically very low levels. And it looks as if construction activity in particular will pick up in 2012.

Housing starts showing some strength

The latest evidence of the momentum — new-housing starts for November — was released Tuesday. The surprising 9.3 percent gain bumped the rate of new-housing construction to its highest level in 19 months, to a rate of 685,000 new units a year. The number of building permits issued for new houses and apartments also rose, to 5.7 percent in November.

“The good news is that housing has switched from being a drag on overall growth, to modest positive contributions,” said Brian Bethune, chief economist of Alpha Macroeconomic Foresights.

Behind this improvement was a combination of powerful demographic trends, differences in the job and housing markets in various local economies, and the half-decade in which very few homes were built or renovated.

In normal times, about 1.2 million new households are created in the United States each year, because of rising population. That number falls during bad economic times as more young adults live with their parents, retirees move in with their children and immigration declines. But it doesn’t fall as dramatically as has home construction amid the housing bust and recession.

Housing starts peaked in January 2006, and for the past five years the United States has been building considerably fewer new houses each year than demographics would seem to demand — 554,000 units were started in 2009, for example, and 587,000 in 2010.

Part of that gap is attributable to the excess built during the housing bubble, when more houses went up than demographics would support. More than 2 million units were started in 2005 alone. With so many homes to fill, there has been little need for more.

But the construction boom was not uniform. While far too many houses were built in markets such as Miami, Las Vegas and Phoenix, other regions experienced only a moderate oversupply. And many of those other markets have seen improved job growth this year.

A house in Las Vegas isn’t much use for someone who has a new job in Dallas or Washington. So even as the housing-bubble cities are still hobbled with a glut of vacant homes, building activity is rising rapidly in some of the stronger local economies.

In the first 10 months of 2011, the number of permits for new-housing units rose 36 percent in the Los Angeles metropolitan area over the corresponding period in 2010. The gain was 31 percent in Dallas, 32 percent in Washington and 35 percent in San Francisco.

In some of the housing-bubble markets such as Phoenix and Riverside, Calif., there was little or no increase.

The strongest gains in housing activity in November, as in recent months, were in apartments and other buildings that contain more than five units. That reflects a shift away from home ownership toward renting.

Even after a 50 percent rise in multi-family housing starts this year, “we expect a similar pace of growth next year,” Bank of America-Merrill Lynch senior economist Michelle Meyer said in a research note. It has its roots in a shift toward renting among Americans buffeted by foreclosures, a weak job market and tight credit.

The rising demand for apartments has driven up rent prices. Nationwide, there was a 3.4 percent gain in rents over the past 12 months, according to Labor Department data, compared with a 2.4 percent rise in all consumer prices. Some individual markets saw much larger gains. And those higher rents are coaxing developers to see opportunity.

“We have been and expect to continue to be very active in all aspects of our investment activity,” Bryce Blair, chief executive of AvalonBay Communities, said in a conference call with analysts last month. The Arlington-based company owns about 50,000 housing units across the country and has $1 billion worth of development underway. Blair noted rising rents and the dearth of new-building projects.

It’s hard to know how much of that shift is by choice — people avoiding the risk of buying a house that could decline in value — and how much is driven by the difficulty in getting a mortgage loan. But the reasons don’t matter much for the broader U.S. economy. If the gains in new permits and housing starts keep up, they could put construction workers back on the job.

Dear Homeowner:

This is the latest addition of the Indian Wells Real Estate Minute newsletter by Grand Luxury Properties. We hope that you enjoy reading the July 1 through September 30, 2011 home sales report for Indian Wells and the Indian Wells Country Club, along with some historical facts about our great city. If you would like to see homes currently being offered for sale in Indian Wells, Indian Wells CC, and all other IW Country Clubs, please view them on our informative website www.grandluxuryproperties.info.

Grand Luxury Properties Sales Office is located at  Highway 111 at the Manitou gate entrance to Indian Wells Country Club and is Open Daily. We are in the Roemer Harnik Building, 45-025 Manitou Drive, Suite 16. Office Phone 760-360-4422 and Receptionist is on duty Monday –Friday 8:30 – 5:00 PM to direct your calls.

Thank You,

Sue Ellen and Bob Ross
Brokers/ Owner Grand Luxury Properties
Sue Ellen’s cell: 760.612.7236               Bob’s cell:760.409.1595
SueEllen@grandluxuryproperties.info Bob@grandluxuryproperties.info

Indian Wells Real Estate Minute
Indian Wells Real Estate Sales Report
3^rd Quarter Sales, July 1 - September 30, 2011

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales

These sales figures are deemed reliable, but not guaranteed from the Desert Area Multiple Listing System

Did you know?

By 1917 Will Hayhurst, the muleskinner from Twentynine Palms began developing the Rancho Palm Springs (now Eldorado CC) and he also took it upon himself to string some wire on fences, posts and trees to have a 10 party phone line from Indian Wells to Indio. The end of the phone line was the Caleb E. Cook Ranch at Cook and Highway 111. Cook moved his family to Indian Wells and immediately started planting offshoots on his desert claim of date palms.  Cook leveled 10 acres, had the well drilled and the house almost completed when his family joined him.  Mr. Cook had run out of money so the second story was canvas and awnings. Cook went on to create a showplace ranch of Deglet Noor date palms. Bert Cavanaugh brought 20 acres close by in Indian Wells and also became a successful date rancher developing new techniques. Bert was later one of the first City Councilmen for Indian Wells. Date Palm newspaper reported in 1922 that no section in the Coachella Valley had undergone more rapid improvement than Indian Wells.

To be continued…Courtesy of Indian Wells Historic Preservation Foundation

In America, it's starting to feel as if there are two housing markets. One for the rich and one for everyone else.

Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 -- about what a buyer would have paid during the Great Depression.

Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multimillion-dollar mansions are selling quickly. Sales in August were up 21 percent from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street's retail storefronts are full.

"We're getting more showings, more offers and more sales," says Ronni Keating, a real estate agent with Sotheby's International.

Think of this housing market as bipolar. In the luxury sector, the recession is a memory and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.

But then there is the other housing market, occupied by 1.5 percent of the U.S. population, according to Zillow.com. The one with outdoor kitchens and in-home spas; with his-and-her boudoirs and closets the size of starter houses. The one that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.

In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7 percent since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5 percent.

Normally, these two segments of the housing market rise and fall together. But now, they're moving in opposite directions.

"Luxury is the best performing segment of the housing market right now," says Zillow.com chief economist Stan Humphries.

After every recession since World War II, housing has led the economic recovery. Not this time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery. This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is "increasingly downbeat."

The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks versus Walmart. Pay on Wall Street versus Main Street. Corporate profits versus family balance sheets.

The divide is also making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can't get a mortgage? The banks aren't granting credit to anyone "who even has a smudge on their application," says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages languish at 10-year lows.

Across the country, prices on high-end homes fell after the subprime crash in the fall of 2008. The price on the $25 million mansion became $20 million, then $15 million. Such "bargains" are pushing more luxury buyers to commit to more deals.

There are other factors, too. In Detroit, a recovering auto industry is helping propel high-end sales. All those car executives who have helped turnaround the American auto industry used to rent. Now they are using their performance bonuses to buy homes.

Wall Street's recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.

But in the other housing market, an apartment tower built in 2007 in San Jose recently converted to all-rental. The building had not sold a single unit. In Miami, a city that exemplifies the foreclosure epidemic, idled cranes dot the skyline. Unemployment shot up again this summer from 12 percent to 14 percent, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and rustic jogging paths that you can pick one up for $25,000, 66 percent off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.

"In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not," says Peter Zalewski, founder of the real estate firm Condo Vultures.

One big factor in the divide is foreign cash, at least in the world of property. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10 percent in 2007.

"Luxury properties are drawing buyers from all over the world," says CoreLogic's chief economist, Mark Fleming.

Dear Homeowner:

This is the latest addition of the Indian Wells Real Estate Minute newsletter by Grand Luxury Properties. For all of us who live here year around, you have to admit it has been extremely warm this past month. Sandals are a must to reach the pool, and then you can count on your pool to be like the warm Caribbean waters. We do love to swim and night or day, it is great!

We hope that you enjoy reading the January 1^st – June 30^th, 2011 Home Sales Report for Indian Wells and the Indian Wells Country Club, along with Historical facts about our great city. If you would like to see the homes currently being offered for sale in Indian Wells, please view them on our informative website www.grandluxuryproperties.info.

Grand Luxury Properties Sales Office is located at  Highway 111 at the Manito gate entrance to Indian Wells Country Club and is Open Daily. We are in the new Roemer Harnik Building, 45-025 Manitou Drive, Suite 16. Office Phone 760-360-4422 and Receptionist is on duty Monday –Friday 8:30 – 5:00 PM to direct your calls.

Follow Grand Luxury Properties on:

Thank You,

Sue Ellen and Bob Ross
Brokers/ Owner Grand Luxury Properties
Sue Ellen’s cell: 760.612.7236               Bob’s cell:760.409.1595
SueEllen@grandluxuryproperties.info Bob@grandluxuryproperties.info

Indian Wells Real Estate Minute
Indian Wells Real Estate Sales Report
1^st Half 2011 Sales, January 1^st -June 30^th, 2011

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales

These sales figures are deemed reliable, but not guaranteed from the Desert Area Multiple Listing System

Did you know?

By 1919 Indian Wells had several settlers. William P. Blair and his family homesteaded the mesquite forest south of what is now Palm Desert Country Club.  Ernie Chapin, Sr.’s family had moved to the area to be near Mr. and Mrs. James O’Neil.  The O’Neil’s had arrived in 1908 opened a store “Dan’s Market and by 1915 a post office opened in their store.  The Harmon’s also homesteaded in Indian Wells in 1910. Melvin Harmon brought his 3 children and ailing wife to the rural community. He raised turkeys, chickens and alfalfa.  Melvin’s father soon followed and exercised his civil war grant to homestead a section, now called Indian Wells Country Club. Close by, Will Hayhurst, a muleskinner from Twentynine Palms was beginning to develop Rancho Palm Springs in 1914 which is now the Eldorado Country Club.
To be continued…Courtesy of Indian Wells Historic Preservation Foundation

Wall Street Journal - April 25 2011

Buyers' Market? Stressed Sellers Say Not So Fast

Falling home prices should give aspiring homeowners the upper hand this spring, but in a growing number of locations, it doesn't feel like a buyer's market.

Blame the nearly five-year slide of home prices. Those declines, which accelerated over the past two quarters, have left many sellers unable or unwilling to lower their prices. Meanwhile, buyers remain gun shy about agreeing to any purchase without getting a deep discount.

That dynamic has fueled buyers' appetites for bank-owned foreclosures. Those homes often hit the market at bargain prices, but they are being snapped up by investors who are paying in cash.

At a focus group earlier this month, the mood among buyers was "nasty," says Glenn Kelman, chief executive of Redfin Corp., a Seattle-based brokerage that operates in nine states. "There's a shortage of attractive inventory," he says. "Customers just keep getting outbid on the houses that they want."

It took Susan Hunter just one month to unload her home in Redondo Beach, Calif., last fall. But she has been outbid on four homes at a lower price point in Eagle Rock, an emerging neighborhood in northeast Los Angeles. Some sold to investors who paid cash. Other listings, she says, are being resold by investors at prices that she says are too high.

"It's the Wild West out here. It's a daily, tireless search," says Ms. Hunter, who works in television production and marketing. Demand is up because "we haven't been able to find homes here below $500,000 since the 1990s."

Last year, software engineer Young Hammack gave up looking to buy after being outbid on three properties. This year, he has his eye on a four-bedroom foreclosed house with a pool in Citrus Heights, Calif., that hasn't yet hit the market. He hopes to pay about half the $492,000 it fetched six years ago.

But the 32-year-old, who is relying on a 3.5% down-payment mortgage backed by the government, is at a disadvantage against buyers who can pay cash. "It's a false buyer's market," he says. "If you think prices are cheap, wait until you start putting offers in."

Many buyers are looking for discounts because they lack confidence that prices have reached a bottom, and sellers won't have much pricing power as long as buyers such as Mr. Hammack and Ms. Hunter are in no hurry. "It may take some time, but I'm willing to wait," Ms. Hunter says.

The Wall Street Journal's quarterly survey of housing-market conditions in 28 major metro areas shows inventories of unsold homes remain high but fell during the first quarter. Listings were down by nearly 25% from one year ago in Miami and Orlando, and by 12% in Phoenix and Portland, Ore., according to figures compiled by John Burns Real Estate Consulting.

Other markets, including New York's Long Island and Charlotte, N.C., still face imbalances. At the current sales pace, it would take more than 16 months to sell all homes listed for sale in each market. A balanced market typically has a six-month supply.

Meanwhile, home values fell in every metro area for the second straight quarter, according to data from Zillow Inc. Prices were down by more than 5% in Chicago and Detroit, the largest quarterly drops, to levels not seen in more than a decade.

Values have fallen so far that many sellers with equity aren't willing to drop their prices. Those without equity can't cut the prices unless the bank agrees to take a loss in what is known as a short sale. Such sales can take months to complete and fall through at the last minute, deterring some buyers. Still, short sales hit a new high, accounting for 9% of all transactions in January, according to CoreLogic Inc.

"Frankly, until we start building some equity, the market is just going to sit here and do pretty much nothing for the next few years," says Christopher Thornberg, a housing economist at Beacon Economics in Los Angeles.

Homes that don't need much repair work and that are located in choice neighborhoods near transit hubs or with good schools are in demand. "What's selling is the cream of the crop, and they sell fast," says Steve Capen, a real-estate agent with Keller Williams Realty in St. Petersburg, Fla. "If it's not cream of the crop, it's getting hammered."

Mike Morea and his family have outgrown the 800-square-foot, two-bedroom home he bought eight years ago in Seminole, Fla. He hopes the bank will approve a short sale for about $85,000 for a $50,000 loss. In December, Mr. Morea saw first-hand why buyers are more attracted to foreclosures: he bought one for himself, a $200,000 three-bedroom home in a nicer neighborhood 10 minutes away.

"That's what every seller is running into," says the 31-year-old police officer. "Nobody is going to buy your home at retail price if there are 30 foreclosures available."

While foreclosures are in demand, mortgage companies' processing problems have sharply curtailed the flow of bank-owned properties onto the market in states such as Florida, New Jersey and New York, where courts must process foreclosures.

To be sure, some of the challenges facing the housing market are easing as the economy adds jobs, boosting demand and easing mortgage delinquencies.Depressed prices coupled with low interest rates have made housing more affordable than at any time since 1975, according to Zillow.

But the legacy of the housing market's collapse has left two big structural problems. First, the huge erosion in homeowners' equity has deprived housing markets of the all-important "trade up" buyer. Even those with equity often aren't willing to sell at current market prices, exacerbating what housing analyst Ivy Zelman calls the "stuck factor."

Second, foreclosures are still weighing on housing markets. While mortgage delinquencies are down from their 2009 peak, an all-time high of 2.2 million loans were in foreclosure at the end of March, according to LPS Applied Analytics.

Economists say the "shadow inventory" of another 4 million potential foreclosures will keep a lid on prices for years. Even in markets with rising demand and falling inventory, prices won't go up because "there's too much on the horizon, so nobody's in a hurry," says Ron Leis, a broker in Sacramento, Calif.

Tighter credit standards have also left markets with fewer buyers at a time when more would help. When he needed to move into a bigger home four years ago, Todd Loewenstein sold his Redondo Beach home and began renting. "Now, we want to get back in, but it hasn't happened," says the 44-year-old technology entrepreneur.

He fell out of escrow one week before closing on an $850,000, three-bedroom home in October after the lender turned down his loan. Mr. Loewenstein, who was prepared to make a 20% down payment, says he has never missed a payment in his life and has enough savings to last several years.

But he wasn't able to meet the bank's tight income-documentation requirements. The home, which sold for $1.25 million in 2005, is still on the market. Mr. Loewenstein says he scans listings every day and is still looking to buy.

Dear Homeowner:

This is the latest addition of the Indian Wells Real Estate Minute newsletter by Grand Luxury Properties. If you are here in our beautiful Desert you know how wonderful the weather has been! Indian Wells Home Sales have actually exceeded Sales from this same time period last year.

We hope that you enjoy reading the January – March, 2011 Home Sales Report for Indian Wells and the Indian Wells Country Club, along with Historical facts about our great city. If you would like to see the homes being offered for sale in Indian Wells, please view them on our informative website www.grandluxuryproperties.info.

Grand Luxury Properties Sales Office is located at Highway 111 at the Manitou gate entrance to Indian Wells Country Club and is Open Daily. We are in the new Roemer Harnik Building, 45-025 Manitou Drive, Suite 16.

Follow Grand Luxury Properties on:

Thank You,

Sue Ellen and Bob Ross
Brokers/ Owner Grand Luxury Properties
Sue Ellen’s cell: 760.612.7236 Bob’s cell:760.409.1595
SueEllen@grandluxuryproperties.info Bob@grandluxuryproperties.info

Indian Wells Real Estate Minute
Indian Wells Real Estate Sales Report
1^st Quarter January 1- March 31, 2011

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales

These sales figures are deemed reliable, but not guaranteed from the Desert Area Multiple Listing System

Did you know?

The Caleb Cook family came to the Coachella Valley in 1912. Caleb had been a professor at Whittier College but was told by his doctor he needed outdoor work. Thanks to the water, Indian Wells became the site of the first date farm in Riverside County when Caleb Cook planted his ranch on the corner of Cook Street and Highway 111. He lived on property south of Indio but owned and farmed considerable acreage in Indian Wells. Caleb met an untimely work related death in 1927, but his sons Robert and William continued to be involved. William became the president of the Coachella Valley Date Growers Association until 1950. The name Cook became well known and a main street named in Indian Wells. Indian Wells, CA was the real beginning of serious date growing in the Coachella Valley!

To be continued…Courtesy of Indian Wells Historic Preservation Foundation and Coachella Valley History Museum

CNN Money

Should you pay off the house?
An increasing number of homeowners are considering paying off their mortgage early. While paying off debt generally is a sound strategy, homeowners also are aware that mortgage interest is tax-deductible, so paying off a mortgage early may not be in the best interest for all homeowners.

MAKING SENSE OF THE STORY

• Homeowners with credit card debt, and those who aren’t contributing the maximum amount to a 401(k), are advised to make those the first priority. It is also important that homeowners have at least six months’ worth of living expenses in cash.
  
  
• Retirees, and those close to retirement, who are contemplating a lump-sum payoff, need to ensure they have enough liquid savings to handle emergencies and unexpected medical expenses.
  
  
• Homeowners planning to move to a larger home or downsize to a smaller one within five years are not advised to put extra money toward a mortgage.
  
  
• Those who itemize deductions on a tax return can figure out the amount of money saved on mortgage interest by multiplying the mortgage interest paid last year by their tax rate (federal plus state). For example, a couple in the 28 percent tax bracket, with a $200,000 loan at 5 percent, will save $2,781 in taxes the first year of a loan. It’s important to remember that tax savings decline further into the life of the loan, as more money is applied toward the principal.
  
  
• For many retirees, and those nearing retirement, who are close to the end of the mortgage, the interest deduction may not be considerable enough to avoid paying off the loan, especially since retirees often end up in a lower tax bracket.

Read the Full Story

Dear Homeowner:

This is the latest addition of the Indian Wells Real Estate Minute newsletter by Grand Luxury Properties.  We look forward to a great 2011 Season, and having you here in the beautiful Desert!  I hope you enjoy reading the 2010 Total Home Sales Report for Indian Wells and the Indian Wells Country Club, along with Historical facts about our great city. Also, included is an interesting article published by CNNMoney.com on 2011 Housing predictions from the Bulls versus the Bears perspective.

If you would like to see the homes being offered for sale in Indian Wells, please view them on our informative website www.grandluxuryproperties.info.

Grand Luxury Properties is the only Onsite Real Estate Sales Office at the Indian Wells Country Club and is Open Daily. Please come by, or call us for any of your real estate needs.

Thank You,

Sue Ellen and Bob Ross
Brokers/ Owner Grand Luxury Properties
Sue Ellen’s cell: 760.612.7236               Bob’s cell:760.409.1595
SueEllen@grandluxuryproperties.info Bob@grandluxuryproperties.info

Indian Wells Real Estate Minute
Indian Wells Real Estate Report
January 1 - December 31, 2010

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales

These sales figures are deemed reliable, but not guaranteed from the Desert Area Multiple Listing System

Did you know?

The site of a once heavily populated Native American Village, Indian Wells was put on the map in the 1860’s after the discovery of gold in the Colorado River. It became a stop along the Jack Bradshaw stagecoach trail used by prospectors heading west to make their gold fortunes!  The future site of the City of Indian Wells found itself 10 years later along the new Southern Pacific Railroad line that traveled through the Coachella Valley.  As stage and rail traffic grew, a water well was constructed by the County in 1870.  It was located 100 feet south of the abandoned Native American Village.  Through the early 20^th century, this well served thousands of travelers, plus the area’s first permanent residents.

To be continued…Courtesy of Indian Wells Historic Preservation Foundation and Coachella Valley History Museum

One of the most closely watched sectors in 2011 will continue to be real estate – a wildly emotional and divisive topic that's puzzled investors and economists since the housing bubble burst around 2007. Earlier this year, many observers thought the market would turn around in a big way as federal tax credits spurred home purchases and the economy added jobs following hundreds of billions of dollars of government stimulus spending.

As the end of the year approaches, the prospects of a real recovery look much dimmer. For one, it's become clear that we won't see a true rebound until we have job growth. With unemployment showing few signs of improvement so far, the bullish take on housing seems hard to swallow, especially when many experts say home prices still have room to fall before hitting bottom.

But a bullish take doesn't necessarily mean that prices would significantly rise. These are unprecedented times, and even the more cheery views fall short of predicting a steady surge in home values.

Here's a bullish and bearish look at real estate for 2011.

Bull: Buy real estate!

One of the most vocal bulls on housing for 2011 has been Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management. At the Value Investing Congress in November, Ackman made a bold presentation called "How To Make A Fortune," highlighting why it's the right time to invest in real estate.

Ackman laid out several reasons but some key points include: With the fall in home prices and mortgage rates still relatively low, affordability is at its highest level in decades. What's more, while there's clearly still a glut in the supply of unoccupied homes, it will start to decline given that the rate of home construction is at historic lows.

Some of Ackman's points sound similar to the reasons billionaire investor Warren Buffett gave earlier this year for his prediction that the real estate slump would end by about 2011.

Of course, this doesn't mean he thinks home prices will return to their 2007 peak. In Buffett's annual letter to shareholders of his Berkshire Hathaway (BRKA), which owns real-estate brokerage and manufacturer Clayton Homes, he predicted that demand for homes would catch up with supply following a period where the glut of unsold property caused home construction to dramatically fall.

In 2009, housing starts (the supply side) were 554,000 – by far the lowest number in the 50 years for which Berkshire could date. "Paradoxically, this is good news," Buffett wrote.

And with home prices falling, he said families who couldn't afford to buy a few years ago would finally be able to afford to do so. Buffett put it this way: "Prices will remain far below 'bubble' levels, of course, but for every seller (or lender) hurt by this there will be a buyer who benefits."

It's anyone's guess if Buffett's position on housing will change much in his letter to shareholders next year. It also remains to be seen if Ackman will continue to trump his "How to Make a Fortune" pitch with the recent rise in mortgage rates. For now, at least, both investors see promise in housing.

Bear: What bottom?

While home prices have for the most part stopped their freefall, some economists believe they haven't hit bottom yet.

Rick Sharga, a senior vice president at RealtyTrac, an online marketplace for foreclosure properties, recently told The Wall Street Journal that foreclosures for 2011 could top the estimated 1.2 million bank repossessions this year, which reflected an increase of 900,000 from 2009. This is partly due to the so-called "robosigning" mess that forced some lenders to stall a flurry of foreclosures.

While Sharga predicts that home prices nationally could still fall by about 5%, others say they could drop much more at about 10%.

Some might argue that further declines coupled with relatively low mortgage rates might just spur a flurry of home purchases, but Daryl Jones, an analysts at investment research firm Hedgeye says that's unlikely given that credit standards at virtually all major lenders are much higher and typically require larger down payments that would actually add to costs. Jones also thinks that home prices could fall another 15% to 30%, which means homes are actually still overpriced and might not attract more buyers as Ackman argues.

And while home construction is at all-time lows, Hedgeye says the trend is probably not as promising as Buffett and Ackman might think. The supply of housing is still very high – the firm estimated in November that there's still 11 months of supply on the market to absorb, which is close to levels seen in 2009.

With so many variables working against the housing market, the bearish takes becomes all the more convincing. But one can always hope they're wrong.

City of Indian Wells ~ Single Family Home Sales

City of Indian Wells ~ Condo Sales

Indian Wells Country Club ~ Single Family Home Sales

Indian Wells Country Club ~ Condo Sales