It’s no secret that the housing crisis that began to recover five years ago is slowly but surely fading into the background along with the nightmare that was the U.S. economic recession. Home prices are rebounding, real estate activity is up, and homeowners across the country are finally climbing out from underneath the burden of their upside-down mortgages. But is Coachella Valley breathing a sigh of relief, too?
Taking a Page Out of Orange County’s Book
People have began to benefit from the increase in Orange County home prices since the downturn with soaring increased competition and plummeting inventory – the dream scenario for area sellers. Median home prices have increased 73% in the last five years and were up $30,000 just in the past year, yet the number of new listings have fallen 13.9 percent over the past two years.
Selling a home is no longer the chore it once was. Move-in ready properties are now typically on the market for just a few weeks, and many of them snagging multiple offers before a deal is done. Real estate agents are even suggesting that their buyers be ready to make quick decisions or prepare for a bidding war, as their dream home may be off the market tomorrow.
What Does the Increase in Orange County Home Prices Mean for Coachella Valley?
Baby boomers, empty nesters and retired couples in Orange County and other major markets are beginning to explore the options that come with a rebounding market. No longer are they tied to depreciating property investments. The market is back on their side and they are exploring alternatives like the Coachella Valley.
The current median Orange County home prices are hovering around $675,000 (second highest in 11 years). Meanwhile, median home prices in Coachella Valley are right around $257,000. It’s a bargain, right? This leaves Orange County residents, or buyers from other high-priced markets, a huge opportunity to cash out their expensive homes, make a smaller investment (on a similar property) in the Coachella Valley and have a nice nest egg left over for the future.
Retirement trends are also favoring the Coachella Valley real estate market. Americans aged 65 or older leaving the labor force is on the rise – 800,000 in the fourth quarter of 2016 to be exact. This upward trend was a new development at the end of last year following a plateau attributed to people of retirement age staying in their jobs beyond age 65. Now that retirement is back on the rise, 65+ buyers will likely be looking to downsize and move away from larger markets as they won’t be restricted by job locations. Good news for Coachella Valley.
On the flip side, some homeowners just don’t need all that space after their kids moved out and some would rather cash out their increased home value and rent to avoid exposure to the next market down turn. Regardless of the motivation, Coachella Valley can benefit from the changing market in Orange County and other major markets with increased home values and a higher demand from buyers looking for more reasonably priced properties.
It is Not Just About The Numbers For Buyers Coming From Major Markets Like Orange County
Not only does Coachella Valley offer attractive home prices compared to its surrounding markets, it offers a similar active resort lifestyle that families and retirees have become accustomed to in Orange County. Whether it’s a love for the quirky music scene, iconic Palm Springs architecture, old Hollywood charm, 100+ golf courses, or the abundance of artistic events and delicious food, Coachella Valley has a little something for everyone while still offering the Southern California pace of life and amenities that Orange County residents have always loved and appreciated.
Why Investors are Interested in Coachella Valley
While home prices in Coachella are on the rise and listings on a downward trend, prices are still fairly low compared to area counterparts. The median cost per square foot in the Coachella Valley is an attractive $179 compared to the $241 California median.
Investors looking to maximize their return on investment see the Coachella Valley as an excellent financial opportunity, with the combination of the influx of buyers looking to downsize from major markets and the area’s proximity to these more expensive areas of California. Couple this with the valley’s lower price points, there is a unique and lucrative opportunity for investors. Investors can benefit by purchasing properties to flip, sit on as the market grows, or rent out to those new residents that have cashed out their properties and are now scared off by the ever-changing real estate market.
Short term rentals are also an excellent option for investors. This market has boomed as the Coachella Valley continues to draw large groups of tourists throughout the year with the Palm Springs International Film Festival, the annual Coachella Valley Music and Arts Festival, the BNP Paribas Open tennis tournament, the ANA Inspiration LPGA event, and various golf events at PGA WEST in La Quinta. This offers investors not only exposure that draws new residents to the area, but an influx of visitors at consistent times during the year.
An abundance of newer condominiums and smaller single-family homes in great areas of Coachella Valley will appeal to the baby boomers and empty nesters. Retirees will appreciate properties that offer low maintenance community living while investors can seek out properties that won’t require ongoing upkeep like landscaping or exterior building maintenance. Anadlusia at Coral Mountain is a perfect example of a community in which there is minimal upkeep on homes within the community.
Buyers are finding it pays to look a little outside the major markets and to be a bit more creative with their investment choices. Remember – it’s all about buyer behavior and right now, all signs point to Coachella Valley.
If you are interested in purchasing a home in the Coachella Valley the Desert Luxury insider recommend you find a real estate professional with the local knowlege to find your ideal home.
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