Expect Home Buying, Mortgage Demand to Pick Up in Coachella Valley
As median home prices in California drop, buyers will be more likely to make an offer on properties in the state.
Moreover, econonomist, John Husing, claims to know where these owners will end up: the Coachella Valley.
Husing says the Palm Springs region will be the next frontier for home-buying commuters. Suburban expansion will move past Beaumont, giving workers a long drive west to work as they apply for mortgages in the area and receive approval.
A fresh crop of baby boomer retirees shouldn’t be too far behind, added Husing; both these sets of owners should help stabilize the desert’s economy.
Inside this up and coming housing market: Long-characterized as a retirement community, the Palm Springs region will still rely on wealthy retirees to support the region economically. But a tourism-driven area is always at risk when a country has fewer dollars to spend for travel.
“The (Coachella) Valley is inordinately responsive to the ebbs and flows of the national economy,” more so than the rest of the Inland region, Husing said.
The economist said several factors, including the arrival of more retirees, could flatten the region’s economic volatility. The region’s population neared 400,000 in 2006. Husing expects it to reach 542,816 by 2020 and 657,464 by 2030. That’s A LOT of mortgage loan applicants.
In his report, Husing predicts during the next housing cycle that Banning will be flooded with construction, followed by North Palm Springs and Desert Hot Springs. Young people moving up in the economic ranks will also be crucial to the desert region and should be fostered, Husing said.
“They’re the ones that are going to provide the income for us to retire,” said Rick Daniels, president of the Coachella Valley Economic Partnership.
The group launched an education initiative in 2005 that promotes high school academies and training in health care, multimedia and technology. Husing pointed to rising test scores among the area’s three school districts since his last forecast that bode well for the region’s future.
What remains an issue is housing, Husing said.
“This area is vulnerable,” said Husing. But unlike the housing bubble burst in the ’90s, the Coachella Valley won’t be adversely affected by mortgage rates or jobs, but rather sky-high prices.
Consumers aren’t sure if it’s the right time to buy a $481,000 house, the median price for a new Coachella Valley home during the second quarter of this year.
“What do you do when you’re confused? Nothing,” Husing said.
Bob Marra, publisher of economic data publications Wheeler’s Desert Letter and the Public Record, said a home-buying standstill will be an overall stigma and emphasized the need for affordable housing.
“It’s our biggest problem.”