Palm Springs View Estates

Market Data for Year 2011

Current MH Market Analysis in the Coachella Valley (Greater Palm Springs Area)

How is the overall mobilehome market in the greater Palm Springs area fairing in today’s economic climate? What is the outlook for the future?

The data show that the number of sales increased again after last year's turnaround. However, this is probably due to the continued decrease in prices. The number of days it took to sell decreased significantly, indicating a favorable market trend. Overall, it would seem the downward price adjustment will end in the near future, but, until the economy improves, prices and the number of sales will likely remain close to present levels.

The table below summarizes mobilehome market activity in total and for several selected parks for 2010.

MLS MHP Market Summary 1-1-11 to 12-29-11 (Selected Parks and Total for All Parks)

		Rent		Total	12/29/2011	1-01-11 to 12-29-211
MH Park	Type	Control	Location	Units	Active	Expired	Sold
Palm Springs View Estates(1)	Rent space	city	Palm Springs	183	7	4	5
Indian Springs(1)	Rent space	city	Palm Desert	191	9	16	8
El Dorado	Own/rent	state	Palm Springs	376	7	11	5
Palm Desert Greens	Own space	na	Palm Desert	1922	101	79	70
Tri-Palm Estates	Own space	na	000 Palms	1800	63	71	46
Coachella Valley Total			All MLS Areas	(2)	535	590	423

	Average	Median	Average	Median	Average Days on Market
MH Park	List Price	List Price	Sale Price	Sale Price	Active	Expired	Sold
Palm Springs View Estates(1)	56957	49999	25300	22000	244	92	58
Indian Springs(1)	72922	77500	58417	64000	117	80	45
El Dorado	117614	115000	99799	95000	74	0	61
Palm Desert Greens	193002	170000	134000	177000	193	84	45
Tri-Palm Estates	98595	89900	80978	74750	147	38	24
Coachella Valley Total	95526	75000	69449	54750	169	75	48

(1) Mobilehomes on rental spaces are not considered real property, thus some sales are made by non- MLS members and are not included in the MLS statistics.
(2) Total mobilehome units estimated to be 25,000 to 30,000.

One of the factors that may prevent a market rebound, even after the residential real estate market improves, is the fact that the prices of homes and condos have adjusted to a level that allows potential mobilehome buyers to afford the more traditional residences.

In resort areas, many buyers purchase vacation homes with discretionary funds, which continue to diminish along with the faltering economy. This decreases demand and places further downward pressure on sales and prices.

The general real estate market will improve as the economy improves, but it may take some time to see a robust recovery in a real estate market area consisting of a large percentage of vacation and second, homes.

What is the story on the El Dorado mobilehome park that paved the way for park owner conversions in California? Can the initial success be repeated?

The El Dorado conversion project in Palm Springs was conducted during the unprecedented real estate market of the early to mid 2000’s. To date, approximately 60 percent of the spaces have been sold to residents. The initial acclaimed success of this project for the park owner has inspired many others to plan similar subdivision projects across the state. Lawsuits are underway throughout the state where residents, cities and counties are trying to prevent or regulate such conversions.

At present at the El Dorado park, there are more than 72 vacant spaces where former owners liquidated or abandoned their homes. The MLS data in the table above show that current sales activity has been extremely slow with average and median sales prices (for the home and land) both dipping below $100,000, which is close to the low range of what the owners paid for their spaces.

The original space prices offered to residents at the time of the conversion of the El Dorado park to condominium ownership in 2002 ranged from $83,600 to $105,660. As of the most recent price list, space prices to buyers of existing mobile homes on rental spaces and approximately 72 plus vacant spaces ranged from $132,000 to $167,000.

With this pricing structure, it is pretty clear why so few owners have been able to sell their mobilehomes and receive a reasonable portion of the sale price for themselves. It also would appear the vacant spaces are not priced to attract any new installations even though the manufacturers of new mobilehomes have priced them very competitively today.

Mobilehome buyers are obviously getting better deals at the other parks where the land is included in the price.

In the short term, the El Dorado park owner does not suffer from the lack of sales (except for the vacant spaces where no rental income is produced to cover the HOA fees and taxes). Unfortunately, the residents that need to sell will suffer because they must reduce the value of their mobilehomes to cover the high cost of the land in order to compete in the marketplace.

Considering the big picture, low demand could have a very negative outcome for the park owner as well as the residents.

What happens to a park that converts to condominium ownership and sets prices and rents that the majority of existing residents cannot afford, or will not pay, and also are rejected by potential new residents?

Although the initial thrust of the El Dorado sales campaign produced great profits for the park owner, today, with a fairly large number of vacant spaces and so few sales of existing homes, one wonders what the future holds for the El Dorado landmark forced-conversion project. With the value of existing mobilehomes decreasing, the lack of new homes being placed on the vacant lots and the eyesores created by the large number of vacant spaces, existing residents could lose the motivation to maintain and improve their homes, and, should the HOA not have the resources to properly manage and maintain the park infrastructure and amenities, the potential for a deteriorating park could be on the horizon. This would impact value for the residents as well as the previous park owner's remaining investment (over 150 spaces).

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