|
||||||
 |
After a very long and exceptional upward run, the assessed value of taxable real property in the Coachella Valley underwent a substantial decrease during the past year as the effects of the global recession continue to impact local real estate markets. According to the Riverside County Tax Assessor/County Clerk, taxable real property values declined in Coachella Valley cities from $66.7 billion in 2008-09 to $62.2 billion in 2009-10 – a decrease of $4.5 billion. A similar decline occurred in the unincorporated territory in the Valley, with assessed values dropping by $859 million in the past year. Overall, the Valley went from an assessed value of $75 billion last year to $69.6 billion this year, a 7.1% decline. While the short-term impact of the recession has clearly had a major effect on property values, it remains unclear how long the bad economy will derail the Valley’s steady growth over the past ten years. Every city in the Coachella Valley experienced declines in property values over the past year but some have weathered the recession much better than others. Rancho Mirage experienced a slight decline of 2.3%, dropping from $8.5 billion to $8.3 billion in assessed property values. Similarly, Indian Wells fell only 3.5%, from $5.1 billion to $4.9 billion, and Palm Desert fell 3.6%, from $13.9 billion to end at $13.6 billion. These cities have experienced slower development and housing growth over the past five years than other cities in the Valley, but their property values appear to have withstood the recession better than other communities with many new housing developments. Palm Springs experienced a sharper drop in real property values, falling from $10.4 billion to $9.8 billion, a decline of 5.5%. La Quinta saw a similar decrease, falling 5.3% from $12.5 billion to $11.9 billion. Several Coachella Valley cities suffered major declines in their assessed property values, however, with Desert Hot Springs hit hardest as assessed values fell from $2.1 billion to $1.4 billion – a precipitous 33.3% decline. Coachella property values fell by $300 million, down 14.2% at $1.8 billion. Likewise, property values in Cathedral City were down by 12%, falling from $4.5 billion to $3.9 billion, while property in Indio fell from $7.5 billion to $6.7 billion, a decrease of 11.1%. Overall, property values in the Valley’s incorporated areas fell by 6.7%, a decrease from $66.7 billion to $62.3 billion. Property values in the unincorporated areas of the Valley fell even more sharply, from $8.3 billion to $7.4 billion, a 10.4% decrease. With the country still mired in recession, it remains unclear how soon property values will recover. Some signs of recovery are occurring such as a new report (week of Aug. 24) citing an increase in housing prices in Los Angeles County for the first time in more than two years. Cities that had previously experienced rapid growth in new housing developments will struggle with foreclosures for the foreseeable future as the next round of sub-prime mortgages come due. Yet the strong growth in Coachella Valley property values over the past five to ten years suggest that generally the market should bounce back strongly. On average, property values in the Valley have increased by 177% over the past decade, and in Coachella, La Quinta, and Indio, they have more than tripled. Such strong, steady growth suggests that while property values may have taken a hard hit during this recession, they will likely regain much of their value when the overall economy begins to improve. Let’s hope to see movement in the right direction soon! Best regards, Bob The California Department of Finance recently released population estimates for the state, the counties, and each city as of January 1, 2009. California added 409,000 new residents during the year 2008 – a 1.1% increase – bringing the total population to 38.29 million people. The rate of growth is much less than during 2007, but still higher than the national average of 0.8% growth. By far the most populous state, California now represents 12.6% of the national population – about 1 out of every 8 Americans. Since the national census in 2000, the state has added 4.3 million people, growing by 12.6%. The rate of population growth in the Coachella Valley slowed to 1.5% in 2008 when 5,256 new residents were added to the region bringing the total population to 448,040 people across the nine cities and the unincorporated areas. For many years my company, Wheeler’s Market Intelligence, has been measuring the growth in the valley by community as well as by district – western, central and eastern – to provide a more in-depth analysis. The highlights of growth are as follows: The most notable news in 2008 was in the eastern part of the valley, where growth in Indio and Coachella decreased from 5.6% and 5.2%, respectively, to 1.6% and 1.7%. Indio continues to be the largest city in the valley with 82,230 residents. Indio had the largest numerical increase in population, with 1,268 new residents. Coachella, now totaling 41,000 residents has nearly doubled in size since the 2000 census, growing 80.4%. The eastern district has been the largest and fastest growing over the previous decade, and witnessed the most dramatic slowdown in population growth during 2008. Falling from a 4.3% growth rate in 2007, the area only grew 1.4% during 2008 to finish the year with a total of 180,492 residents. The region has grown 58.1% since the 2000 census, more than double the rate of the western valley. The western part of the Coachella Valley has experienced the smallest change in growth because the area is the oldest and did not have as much new residential development as the other parts of the Valley during 2005 and 2006. The western valley grew 1.3% during 2008. Since the census in 2000, the western valley has added 27,007 residents, growing by 24.2% to its current size of 138,685. The western valley is currently home to 30.9% of the population of the valley, a figure that is falling as the eastern valley continues to expand. Cathedral City, currently the second most populous city in the valley grew by 0.9%, bringing its total to 52,447. Palm Springs’ growth rate increased to 1.2% from 0.8% in 2007, adding 582 residents for a total of 47,601 people. While Desert Hot Springs is still by far the fastest growing city in the western valley, at 2.6%, its growth has slowed down substantially from the 4.7% growth rate in 2007. The central valley – the least populated part of the valley with only 28.8% of its residents – experienced a more notable decline in growth, falling from 2.7% in 2007 to 1.8% in 2008. This area, containing four cities and the unincorporated communities of Thousand Palms and the western part of Bermuda Dunes, added 2,268 new people, growing 39.7% since the 2000 census to a total of 128,863 residents. In the central valley’s two larger cities, growth has slowed significantly, while in the two smaller cities, growth has actually increased. Population increase in La Quinta, typically a strong city for growth, slowed from 4.5% in 2007 to 2.4% in 2008, but the city still reported the second largest numerical increase. La Quinta has grown 84.8% since the 2000 Census, almost doubling in size from 23,694 to 43,778. A total of 1,118 new residents were added to Palm Desert, making it the third largest city in the Coachella Valley and the largest in the central district, with 51,509 residents. Indian Wells grew by 93 people or 1.9% and continues to be the smallest city in the valley. With 1.2% growth in 2008, double the rate from 2007, Rancho Mirage grew to 17,180 and is the second smallest city in the valley. The two fastest growing communities in the desert, La Quinta and Desert Hot Springs were the 43rd and 44th fastest growing cities in the state, a sharp change from 2007 when four Coachella Valley cities were in the top 25. In addition to the permanent residents, the valley is home to a substantial seasonal population which Wheeler’s estimates internally based on a variety of factors, including the second home inventory in the region. Based on these calculations, the seasonal population is estimated to total roughly 146,000 and combined with the permanent population of 448,040, the number of people residing in the valley during the “peak season” months is about 608,000. There are lots of facts and figures here to consider, but I hope you find them useful. Best regards, Bob Marra One creased page in the U.S. Airways magazine I was reading on a flight to the east coast this past weekend made my day. A creased page makes his day you ask? Yes, it did so because the page with the top right corner folded down as a place marker was a full-page ad for Cape Coral, Florida placed by their economic development agency to try get the attention of business people possibly thinking of “greener pastures” and or opportunities to relocate or expand their operations. The headline read, “If your business could be anywhere, why not here?” It’s a good question – one I think should garner attention, especially by weary, road warrior business owners that might be traveling home to a place that’s not very special except perhaps that it’s where headquarters is located. As a founding board member and past chairman of the Coachella Valley Economic Partnership, I simply enjoy knowing that this kind of message resonated with the person who decided to mark it for later reading. Right, I know: If they were so interested then why did they leave the magazine on the plane? I’m just going to assume that the mover and shaker business executive captured the contact information into a PDA and checked it out while waiting for a connecting flight. Please work with me on this one. In the Coachella Valley, where we have a permanent population of 448,000 with a workforce of more than 250,000, we have almost the same message from top to bottom as the Cape Coral ad beginning with the headline. I like the tagline that goes along with their logo too, “Growth Engine of Southwest Florida.” I think “Growth Engine of Southern California” sounds pretty compelling for the Coachella Valley. In fact the Valley has grown tremendously in many ways, especially looking at the period from 2000 to now. You want to see job growth? How about roughly 32,000 new jobs for a 28% increase during the period? If you’re into real estate to lease, buy and/or sell you should know that the assessed valuation of real property in the Coachella Valley has grown 166.8% since 2000, adding $40.7 billion in value during the period. What business wouldn’t want to be located in a “growth engine” type of region? Some other copy points in the ad meant to answer the great question in the headline ring close to our desert home, such as “Where there are tens of thousands of square feet of new office space and light industrial buildings ready for occupancy.” Hey business owner/crease maker, we have at least ten times more space ready to go in the desert and we’re making deals big time. There is more than 1,000,000 square feet of available commercial space in the Coachella Valley right now. More than half of the space is new generation that can be ready for occupancy within 30 – 60 days and much built out as spec space ready immediately. Other points included, “Where robust broadband connects you to customers around the globe.” Last time I checked the Coachella Valley has a direct fiber link running along I-10 through the Palm Desert campuses of UCR and Cal State San Bernardino and tied in to the Wilshire One POP giving the valley essentially the most potent Internet connectivity possible. There’s basically unlimited capacity, so business owner/crease maker come climb aboard our broadband express in your brand new desert office. What else were these Cape Coral folks bragging about? Oh, the old “Where after a day at work, you can be ‘on vacation’ in your own tropical retreat…” Tropical is nice but the humidity, bugs and thunderstorms will wreak havoc on just about any given day. Did I mention hurricanes (what’s hurricane insurance running these days?) How about the sound of being on vacation after work every day in your own desert paradise where it’s sunny 350 or so days per year and a handful of world class golf courses are within a 10 minute drive no matter where you’re at in the valley? Yes, my fellow locals it is July and we’re not too excited right now, but it’s a dry heat and many people really like it warm. Let’s just keep this our little secret for now. And now for some things I didn’t see in Cape Coral’s ad that could be in the Coachella Valley’s version. No Enterprise Zone; no Empowerment Zone; no mention of 22.5 million potential customers within a two-hour drive; no community college and university systems working closely with businesses to train the next generation workforce in precisely the industries we have now and seek to grow and nurture; no award winning Career Pathways Program, and no region wide Economic Blueprint crafted from an intensive, exhaustive community wide effort led by local public and private sector leaders and a nationally recognized economic development consultancy (we almost have this last one completed). Now if I could just find a way to pull fingerprints off this page and find the crease maker somehow. Not to worry, though, I’ll bet there are thousands more potential crease makers out there flying around the country and even landing at PSP on a regular basis. Let’s go get them! Best regards, Bob Marra |
  |
||||
|
|
||||||
