Palm Springs Real Estate Stabilization Plan
Many homeowners in Palm Springs and the surrounding Coachella Valley area are wondering when relief will come for flagging home prices.
An important first step came Tuesday, with the county's roadmap for the $48.5 million windfall from the U.S. Department of Housing & Urban Development to cap blight and stabilize neighborhoods. The real estate revitalization plan, targeting areas hardest hit, comes at a time Riverside County is reporting more than 29,107 foreclosed properties — nearly 3.8 percent of all housing — as of Oct. 31. When the pre-foreclosure properties and units at “auction” are added to the mix, the count jumps to 52,000, or nearly 7 percent of all housing units. While Palm Springs has not seen the worst of the real estate crisis, it hasn't been isolated either. Home prices in Palm Springs have dropped to near 2003 levels, with many of the recorded sales being short sales of foreclosures.
The HUD funds, directed primarily toward areas that lie within Community Development Block Grant Program boundaries, would be split according to the 51-page plan into four primary activities:
- Buying, rehabbing and reselling property to first-time home-buyers: $20 million.
- Acquiring, rehabilitating and renting to to very-low income people: $1.85 million.
- Enhanced first-time buyer program: $9.7 million.
- Acquiring and rehabilitating foreclosed, vacant multi-family properties, new construction of multi-family rental projects: $12.1 million.
The 51-page outline calls for redevelopment of vacant or demolished properties for nonresidential uses, including public facilities, or mixed residential and commercial uses. The outline also sets aside funds — up to 10 percent of the grant or just under $5 million — for the county to administer the program. Tom Freeman, spokesman for the Riverside County Economic Development Agency, called the plan an important step in the process to take out as much distressed property as possible within the 18-month timeline parameters set out by HUD.
"We lobbied heavily for the funding," said Fred Bell, executive director of the Desert Chapter of the Building Industry Association. "We knew prior to any analysis by the county that we had an area that was very hard hit." Bell said it represents a good allocation of funds, but told county officials some challenges remain: Foreclosures continue across the region. Cities will have to apply for the funds, and competition may be keen to obtain the federal dollars. Concern has been raised about administration costs borne by the county, as well as the costs borne by cities that participate in the programming.
With all the seemingly bad news out there, savvy buyers would do well to view this funding as a possible turning point in the real estate market and buy. There are many great properties out there that are now affordable and definetely fairly priced. You can never pick the bottom of the market, but you can read the signs and follow the message. Happy Hunting.
Interested in buying or selling a home in the Coachella Valley area? Contact Patrick Stewart Properties.