The HOA is your friend...really, it is! Part 2.

For last week's blog I started my interview with John Colen, Sunrise Alejo HOA President.  There was so much to cover that it spilled over into another interview, which starts below...

Palm Springs Condo Living: So last week, John, you were saying that people should be sure that Condo Living is for them.

John Colen: That's right, and they should also make sure that when they do choose they select a condo where the association has a reserve fund.

PSCL: What's a reserve fund?

JC: A reserve fund is a fund the home owner's association holds with money to replace things that break down or need repairs...things like pools, spas, heaters, roofs, lighting, asphalt, painting, etc.  A HOA should have a repair list with items that will need replacement in time, and these would be paid for out of the reserve fund.  Additionally, an HOA should do a reserve study to calculate the lifespan of a community feature, like a pool, and then determine how much you have to save each month to purchase a new one or make the necessary repair at some point in the future.

PSCL: What about more regular, expected expenses like pest control or lawn mowing?

JC: Regular monthly expenses would be paid via the operating fund.

PSCL: So there's a reserve fund for unexpected or more long range expenses and an operating fund for more expected or regular expenses?

JC: That's right.  When added together the operating fund and the reserve fund should equal the dues coming in each month.

PSCL: What happens when the dues don't equal (are less than) the operating fund and the reserve fund?

JC: Assessments!  If the HOA is not bringing in enough money to pay it's bills, those from operations and those in the reserve, it must charge the individual owner's an assessment to get the work done.

PSCL: Ouch, that must hurt the homeowners.  Any way assessments can be avoided?

JC: Sure.  You need a really well run HOA to eliminate or keep assessments to a minimum.  When people are considering a condo development to purchase in they need to look at the financials of the HOA.  They need to make sure there are not too many delinquencies, meaning people that are not paying their HOA dues.  They also need to check the reserve fund to make sure that it's adequate to cover the lifespan of what's on the HOA's repair list.  Finally, they should talk to other residents in the complex to get a feel for how the HOA is run.  When well run, an HOA can increase the value of your property.

PSCL: You mentioned that there shouldn't be too many delinquencies.  What does an HOA do when a homeowner isn't paying their dues?

JC: Well, each HOA is different, but after a certain number of months of non-payment, maybe 6 months, the HOA needs to put a lien on the property of the non-payer.

PSCL: A lien?  That sounds pretty serious.

JC: It is, and it's expensive too because the lien will include lawyers fees to be paid in addition to the non-paid monthly dues.  But the HOA must do it for the sake of the other residents that are paying their dues every month.  If dues were not paid the HOA would be in big trouble very soon, so receipt of monthly dues is a key in the proper functioning of an HOA.

PSCL: In terms of expenses, it seems like the cost of everything is going up, what do you think is going to be the big expense item as we move forward?

JC: That's easy...water.  Water rates are increasing dramatically.  The Desert Water Agency (DWA) now has a five-tiered rate plan for us here in Palm Springs.  Tier 1 is the cheapest and it includes desert landscaping which doesn't use much water.  Tier 5 is the most expensive and it's basically an all grass yard which requires a lot of water given that this is a desert.  In the future, anyone that wants an all grass yard is going to pay big money to maintain it.  At Sunrise Alejo, we have a large grassy yard area, but we're making a lot of changes to try to lower our water usage.  First of all, we've changed some of our grass area for more desert landscaping.  Second, we're currently replacing a lot of our older water sprinklers with newer models that use less water or use it more efficiently.

PSCL: One final question, John...what do you think residents can do to help an HOA run smoothly.

JC: Go to meetings.  Participate.  Don't just complain, come up with ideas or solutions that will help everybody.

PSCL: Thanks for your insightful answers today, John.  I'm sure we all appreciate your help.

JC: My pleasure.

If you have any questions, concerns, or comments about Palm Springs Condo Living please contact me...I welcome your input!

Alan Wilke
condos@PalmSpringsCondoLiving.Com
760-464-6693

The HOA is your friend...really, it is! Part 1.

Last week, my blog asked residents of condo communities why they LOVE Condo Living.  I got a lot of great answers and it was fun talking with people about something they really like.  Of course, there's a flip side to any situation, and for many people that live in a condo it has to do with the home owner's association (HOA).  Many people who do live or have lived in a condo community have had issues with the HOA or its board of directors.  There's a variety of reasons for this, so for this week's blog I decided to go to the source and find out what the typical HOA is doing and why it is often disliked.  The following is an interview I had with John Colen, Sunrise Alejo HOA President.

Palm Springs Condo Living: Hi John, How long have you been the President of the board at Sunrise Alejo?
John Colen: Since January.

PSCL: I talk with a lot of people about purchasing condos and for some people the issue of monthly dues is a real stumbling block.  They feel the expense is too great for what you get back.  What's your take on that?
JC: I've owned houses in the desert before and I can tell you that the expenses with a house are much greater than with a condo.  For example, let's take a look at two typical expenses - the pool and landscaping.  At most houses these two expenses alone are going to equal about $300 per month just for maintenance, not including repairs.  That's a lot of money in comparison with what you get with an HOA.

PSCL: I would say the average HOA dues in Palm Springs are about $400 a month, so I'd have to agree that HOA dues are less than the same services you'd receive at a house.
JC: And that was just for two expenses.  When you include all the other things an HOA covers - sprinklers, lighting, roofing, painting, driveways, streets, pest maintenance, common area electricity, etc. - the HOA dues are a bargain!

PSCL: Another issue people seem to have with an HOA is that they can't do whatever they want outside of their units.
JC: I've never turned down a request for anything.

PSCL: But I think for many people even the fact that they have to make a request to do something on a property they own is a problem.
JC: Then maybe they should buy a house and paint it pink!

PSCL: Exactly!
JC: There's not a lot of room for individuality on the outside of your condo.  Inside...do what you want.

PSCL: So what I think I hear you saying is that Condo Living may not be for everyone.
JC: Probably not.  Condos are perfect if you like people and want a social atmosphere.  People come together from all over...it's a good way to meet people.  But if you're looking to be a hermit there are probably other places you should consider.

PSCL:  Fair enough.  That's about all we have time for this week, John.  Can you join me again for more conversation next week?
JC:  Definitely.  See you then.

Please check in to the blog next week for a continuation of my conversation with John Colen.  If you have any questions or comments about PalmSpringsCondoLiving.Com feel free to contact me.

Alan Wilke
Condos@PalmSpringsCondoLiving.Com
760-464-6693

Why do you LOVE Condo Living?

Often, when I'm speaking with people about their condos and about living in condos, I can hear in their voices how much they really like the Condo Living lifestyle.  So for this week's blog I decided to ask a few folks what it is that they really LOVE about living in their condo and condo community.  The answers I got were not unexpected, but I was surprised by how strongly many people feel about the lifestyle.  I walked away with a number of different reasons why people LOVE Condo Living.

Community Appearance

The issue that I kept hearing time and time again is how proud people feel about their community's appearance, particulary the landscaping.  As Tom Goodrich of Canyon Sands put it, "The grounds are kept nice, our place always looks good."  And Art Quinones of Sundial agreed, "It's beautifully landscaped and has nice greenbelt areas."  We don't always think about it, but given that we are living in the desert it takes a lot of work to keep our beautiful environments.  John Colen of Sunrise Alejo said it well, "We have lush green grass and lots of trees which makes living in the desert pleasant."

Community

Another common element for people was the sense of community they feel in their condo developments.  John Colen says he, "enjoys socializing with all the neighbors and the snowbirds.  My condo is the hangout for all my friends...it's a great gathering place as we have many friends that live in the complex."  Tom Goodrich agreed, "You can feel a sense of community, you know many of your neighbors." 

Carefree Living

Who wouldn't like the concept of "Lock-n-Go", simply locking your door when you're gone and not worrying about who's going to take care of the pool or mow the lawn?  June Papadeas of Canyon Sands agrees 100%, "I love condo living because it allows me the freedom to be away from my home worry free.  I can just lock the front door and know the property and all facilities will be taken care of."  David Weir of Sunrise Racquet Club sums up the Condo Living lifestyle perfectly, "The prime adantage to living in a condominium is that, as a part-timer, I have far fewer worries about maintenance and upkeep.  I can leave at the end of a weekend, lock the door and know that the pool will be tacken care of, the yard will be tended, and if there's something I need, a call to the management company will generally take care of it.  And when I return, I can focus on rest and relaxation with no backed-up yardwork and chores waiting for me."

Amenities

Probably one of the greatest features of Condo Living is all of the things you can do or enjoy at your community and not do anything for its upkeep.  John Colen adds, "I really enjoy using the heated pool 365 days a year without cleaning it."  That does sound pretty nice!  Tom Goodrich agrees, "We have access to many pools/spas without having to clean and heat them."  And for Art Quinones his community provides many things that make it seem more like a house than a condo, "I enjoy the fact that there are private garages and patios, wide streets, pools and Jacuzzis, a clubhouse, tennis courts, and that it's close to the airport and downtown.  It makes it feel like a home."

Security

For most people feeling secure is an important feature in their lives and where they live, and Condo Living can provide this, if for no other reason than there are other people around.  For Tom Goodrich, living in his community he has a more secure feeling than when living in a house.  And for Art Quinones, "my complex gives me a sense of security because it is gated."

Here's to all the different reasons we may have for enjoying the Condo Living lifestyle!

Alan Wilke
Condos@PalmSpringsCondoLiving.Com
760-464-6693

June 2010 Sales Analysis

The following sales analysis compares June 2010 sales data with data from the preceding month (May 2010) and the previous year (June 2009). Data is analyzed by region in the city: South Palm Springs, Central Palm Springs, and North Palm Springs.

South Palm Springs - South of Ramon Road

	June 2010	May 2010	June 2009
Condos Sold	45	48	33
Price Range	$67,500 - $525,000	$41,500 - $410,000	$85,000 - $422,000
Average Price	$200,749	$182,127	$209,367
Median Price	$189,000	$170,000	$200,000
Price/Square Foot	$132.85	$125.78	$151.90
Average Square Feet	1486 S.F.	1405 S.F.	1430 S.F.
Days on Market	121	89	117
% Distressed Sales (REO or Short Sale)	36%	40%	21%

Year-over-year there has been a great increase in the number of condos sold in South Palm Springs...45 in 2010 vs. 33 in 2009, a 36% increase.  However, the average sales price dropped 4%, the median sales price dropped 6%, and the average price per square foot dropped 13%.  The size of the average condo sold is similar to last year and the days a property stayed on the market before selling is also mostly unchanged from last year.  It is interesting to note that distressed sales (REOs and Short Sales) have increased dramatically from 21% of all sales in June of last year to 40% in May and 36% in June of this year.

Central Palm Springs - Between Ramon Road and Vista Chino

	June 2010	May 2010	June 2009
Condos Sold	27	25	24
Price Range	$80,000 - $610,000	$64,900 - $370,000	$80,000 - $700,000
Average Price	$218,734	$159,536	$257,158
Median Price	$175,500	$143,000	$197,000
Price/Square Foot	$145.90	$127.47	$180.82
Average Square Feet	1432 S.F.	1194 S.F.	1344 S.F.
Days on Market	75	87	166
% Distressed Sales (REO or Short Sale)	44%	40%	29%

The number of condos sold year-over-year has been relatively flat in Central Palm Springs, increasing by only 3 units, or 13 %, in 2010.  Similar to South Palm Springs prices have dropped - average price dropped 15%, median price dropped 11%, and price per square foot has dropped 19%.  At the same time, the average size of a condo has increased by about 90 square feet and the days a property stayed on the market before selling has dramatically dropped by 55%.  The percent of distressed properties selling has increased 52% over June of 2009.  One explanation of this data may be that the distressed properties are finally moving through the market and actually closing and closing more quickly than they were a year ago.


North Palm Springs - North of Vista Chino

	June 2010	May 2010	June 2009
Condos Sold	10	12	9
Price Range	$43,000 - $165,000	$43,000 - $220,000	$53,000 - $279,000
Average Price	$84,850	$101,246	$111,056
Median Price	$58,750	$87,775	$80,000
Price/Square Foot	$98.70	$107.73	$116.42
Average Square Feet	818 S.F.	917 S.F.	888 S.F.
Days on Market	53	78	169
% Distressed Sales (REO or Short Sale)	80%	67%	44%

The condo market in North Palm Springs is the smallest of any of the Palm Springs regions, with only 10 sales last month, 1 more than last year.  Similar to the other areas in Palm Springs, but even more pronounced in the north, pricing has experienced a downward trend - average price dropped 24%, median price dropped 27%, and average price per square foot dropped 15% vs. last year.  The average sold condo is 70 square feet smaller than one sold last year.  But the biggest change in the entire analysis is that the days a property stayed on the market before selling dropped by 69% to a mere 53 day average.  Add to that number the fact that the percent of distressed property sales now represents 80% of all condos sold in this region, almost double what it was a year ago.  As with Central Palm Springs a case could be made that the distressed sales are finally moving through the market more quickly than they were a year ago. 

Across the board a number, of issues stand out for the Palm Springs condo market in relation to a year ago:

• Number of condos selling has increased.
• Prices of condos selling has decreased.
• Number of days a condo stays on the market has decreased.
• Percent of all sales that are distressed properties has increased

If you have any questions or comments regarding this data please feel free to contact me.

Alan Wilke
Condos@PalmSpringsCondoLiving.Com
760-464-6693

Your #1 source for all things CONDO in sunny Palm Springs, California!

Welcome to the first blog for my Web site, PalmSpringsCondoLiving.Com!  As this blog title and the Web site name imply this site will be your #1 go-to source for anything you should want to know about living in a condominium in Palm Springs and the entire Coachella Valley.  That's a pretty broad topic that leaves me lots to talk about in my future weekly blogs.  For example, I'll certainly write about condo living vs. house living and the benefits that condo living provides. Or another week I may interview a local designer about how to design the perfect desert getaway in 1,000 square feet or less.  Another topic may have to do with having great relations with your home owners association (HOA) and condo neighbors.  Or perhaps a discussion with a local land title professional regarding the myths and realities of fee vs. lease land.  There are a world of things to talk about and I'm excited to get started!

First and foremost, though, this is a real estate site.  I am a real estate broker/agent based in Palm Springs so I have the experience and know how regarding real estate transactions to discuss the topic in depth.  In particular, I've completed a large number of condo sales so I have extensive experience in the intricacies of buying and/or selling a condo.  Once a month the weekly blog will focus on the completed condominium real estate sales we experienced in the preceding month.  In this blog I'll report sales figures for the 3 regions we in Palm Springs use to divide our market - South Palm Springs, Central Palm Springs, and North Palm Springs.  I'll analyze the number of units sold, average or median price per unit or per square foot, how many studios, one-bedrooms, two-bedrooms, or three-bedrooms have been sold, etc.  I'm most interested in the statistics that go into our real estate market and in using these figures to help buyers and sellers of real estate achieve their goals.  A less dry, but no less important feature will be discussions of various condo communities and their amenities as reported and rated by the residents.

While I am the person writing these blogs and coordinating the Web site this site is really about you.  If there's something you enjoy reading about or would enjoying learning that relates to condo living in Palm Springs please let me know.  I want this to be a site you come to often whenever you have a moment to read about what's happening in our beautiful desert community.  Please feel free to express your interests or concerns to me and I'll do my best to incorporate them into the Web site.  Thank you in advance for your support.

Here's to living the good life in fabulous Palm Springs with PalmSpringsCondoLiving.Com!

Alan Wilke
Condos@PalmSpringsCondoLiving.Com
760-464-6693