We just listed this architecturaly significant “Green” Modern House in Joshua Tree.

Seen in Variety, the LA Times, The Week and Angeleno magazines, this ‘green’ home was conceived by Beverly Hills landscape architect W Garett Carlson. The result is notably significant in uniqueness of concept, materials and execution of a structure at one with its environment. Design elements include rusted steel, concrete, glass, desert sand and indigenous landscaping. A faux boulder facade mimics the famous rock faces in nearby Joshua Tree National Park and hides the home from view. Low energy in-floor thermal warming and cooling is assisted by massively insulated walls, a desert garden on the roof, and the cooler high desert location. Disappearing 10 by 40 foot glass doors completely open the great room to the deck and desert views. Stained concrete floors, CaesarStone counters, upscale stainless appliances, glass tiles, and wood ceiling surround the furnished living spaces. Priced to market, it is well below its 2009 construction cost. Easy driving times to Palm Springs and LA.

Nearby 800,000 acre Joshua Tree National Park has granite monoliths that attract visitors and rock climbers from around the world. The town, an enclave of musicians and artists, continues to grow in popularity, with its own music festival, and an eclectic mix of art galleries, antique and curio stores, cafes and design shops. It is home to the annual Joshua Tree Music Festival. The band U2 stayed and recorded in the town to create their legendary album, ‘The Joshua Tree’. Visit www.boulder-house.com

We see a lot of news about home prices, both good and bad.  Nobody can predict the future, but we might find clues about it in the past.  The Case-Shiller Home Price Index, captured the California home price collapse in 1990, as shown in the first chart - for high-tier Los Angeles homes.  Then the prices had increased by about a factor of two, just like our last bubble, as shown in the second chart.  The scale in the first chart has been expanded to show they were very similar bubbles, even to their relative size, shape, duration and the false recoveries in 1991 and 2007.  Maybe we can use the 1990′s experience to project our current recovery. 

If so, the blue bars show that it took seven years from the peak to just get to the point where prices began a true recovery.  Our price recovery may not start until 2013, and this is a worse economic situation than in the 1990′s. In between now and 2013 we may see still lower prices.  It is difficult to tell if the small peak we see today is a false recovery or the reaction to an overshoot in the drop, but from the last bubble it is not likely the beginning of recovery.  Again historically, that increase around 2013 will be at the rate of inflation, which in the long term is around 2.5% a year.  If so, this is relative price stability and isn’t bad news – volatility in home prices is the bad news because neither sellers or buyers know what to expect.  – Wayne Longman

Case-Shiller LA High Tier 1990 Bubble

LA Case-Shiller High Tier 2006 Bubble

The most recent Case-Shiller index shows the average price of all home sales in Los Angeles from November through December increased by about 0.3%.   When you dig a little deeper,  over the last three reports it shows  a slight decrease for high tier homes (those over about $500,000), and about a 5% increase for homes below that price limit.  On the face, it means healthier low-end market activity, with supply perhaps slightly lagging demand, resulting in higher prices.

On the other hand, other and more recent-activity factoids are the national 20% drop in February consumer confidence, and an 11% drop of new home sales in January.  Freddie Mac now reports that a record 4 percent of its borrowers are at least three months delinquent on their loans and in danger of foreclosure. 

Our own Desert Area MLS shows a 20% drop in closings in January, while the inventory of bank-owned and others has remained fairly constant.  Those listed above $500,000 are significant in numbers – about 1/3 of the total, but they sold only about 1/7 of the total in January.  The number of new listings above $500,000 jumped from about 260 in January to over 400 in February.

All this may indicate a stronger Buyers’ market in the high end with more supply and less demand resulting in lower prices.   The overall lower buying activity and consumer confidence may further serve to weaken prices in all tiers.  – Wayne Longman