Indian Wells Crossing gets added muscle

Great Article From The Desert Sun

Developers of Indian Wells Crossing have added a new partner to help speed along progress on their long-anticipated restaurants and shops - now slated for 2009.

The deal with real estate firm Weingarten Realty was completed after receiving approval from the city of Indian Wells during the last few weeks, said Michael Kiner, a co-developer of the project.
Indian Wells Crossing, formerly called Miles Crossing, is a mixed-use commercial and residential project slated for Miles Avenue and Highway 111. It is also expected to feature a hotel and 22-unit housing track.
As part of the deal, Weingarten Realty, which owns more than 400 properties in 29 states, will finance Indian Wells Crossing's retail wing at an estimated cost of $40 million, said regional director Robert McSparran.
The company also plans to use its own funds instead of borrowing, McSparran added.
The deal would not only provide financing, but also a national network of contractors and retail tenants, Kiner said.
Weingarten, McSparren said, could draw from its pool of 5,300 tenants to find the right restaurant and retailers for Indian Wells.
"We needed a fit of someone who could come in and take over the actual construction and leasing arm," Kiner said.
He partnered with Chicago-based developer Gerald Fogelson to form Miles Crossing Retail, LLC. The pair worked on the design and entitlements, and Kiner said they likely would have borrowed to finance the project.
Weingarten will now steer the project through construction and leasing. The financing is an added bonus, Kiner said.
The company opened a new L.A.-based office last year and was looking for area investments.
Indian Wells Crossing was originally scheduled to open shops and restaurants by fall 2007, but technical issues have bumped that back to fall 2009, officials said.
The project will be built into the Whitewater River Wash slope, and the developers were mired in engineering studies and approvals from both the Coachella Valley Water District and the U.S. Army Corps of Engineers, which have jurisdiction on parts of the wash.
McSparran said he doesn't expect more delays, and construction should begin this summer.
Indian Wells Crossing "has been on the books for four or five years now," he said. "It really needs someone to take the bull by the horns and drive it across the finish line."
So far, the project has six confirmed eateries, including the Chop House and LePaon. McSparran said he's negotiating with two more "high-end" restaurants, plus a day spa, an eyewear shop and several banks.
But even as Indian Wells Crossing's retail segment sees progress, there haven't been any new developments on its proposed hotel across the street and the market slowdown has put the houses "on the back burner," Kiner said.
The hotel was originally supposed to be managed by Fairmont Hotels & Resorts, but talks fell through in summer 2007.
Indian Wells Crossing developers then approached Marriott, which operates nearby Renaissance Esmeralda Resort & Spa, but a change of ownership has complicated the talks.
Now they're negotiating with several hotel companies. The goal is a hotel, but there's a chance it could turn into something else, Kiner said.
Indian Wells Crossing will be Weingarten's first Coachella Valley property. The company also has an Indio commercial project early in the works.

Pacific Life Open Fun Facts

• Estimated valley economic impact: More than $220 million
• Officials book on average 11,000 hotel rooms each year for players
• About 10,000 glossy programs are printed
• 2008 anticipated attendance: 320,000
• The tennis garden gets an electric bill of $60,000 to $90,000 from Edison to power the tournament, according to Director of Operations Bill Clarke. The main stadium has 144 overhead lights at 1,500 watts each "to brighten like daylight," Clarke said.
• The Pacific Life uses 250 ball kids and they're mostly local
• About 400 journalists from across the globe arrive to cover the Pacific Life Open.
• Van Tuinen estimates the 3,000-member paid staff racks up more than a half-million hours preparing, working and cleaning up after the Pacific Life Open. Department directors typically work 15- to 20-hour days during the event.
• : About 7,500 parking spots are available around the tennis garden
• The tournament is broadcast to 70 million homes worldwide

Why Fed Rate Cuts Do Not Equal Lower Mortgage Rates

The Federal Reserve has been on a rate cutting spree once more. Many mortgage applicants are calling their mortgage representative and expecting a lower interest rate. Others who have been waiting to refinance are puzzled as to why mortgage rates have not moved lower during the recent five Fed rate cuts. This is difficult to explain to consumers who have watched a 2.25% reduction by the Fed with very little benefit in mortgage rates.Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be in effect for 30-years while a rate set by the Fed can change from one day to another.It is often said history repeats itself. And if history is any teacher,we can learn from what happened to mortgage rates the last time the Federal Reserve was in a rate-cutting cycle.The last time the Fed was in a lengthy rate cutting cycle was back in2001 from January 3, 2001 to December 11, 2001. In the span of 11months, they cut the Fed Funds rate 11 times with eight of those cuts by50bp. This resulted in a total of 475bp or 4.75% in short-term interestrate cuts taking the Fed Funds Rate from 6.00% down to 1.75%. Now most uninformed people would naturally think because the Fed cut rates by so much during this time that mortgage rates would follow suit and trend lower as well. Not so. Mortgage rates actually moved higher during thistime of significant rate cuts because inflation, the arch enemy of bonds, gradually rose.Now let's take a look at what happened with the Fed's most recent cutting cycle, the first since 2001. On September 18, 2007 the Fed cut the Fed Funds Rate by 50bp. The mortgage bond market briefly enjoyed a"knee-jerk" reaction to the Fed move by closing higher that day, but lost 140bp over the following two sessions. Then on October 31, 2007 the Fed lowered the Fed Funds rate by 25bp. The mortgage bond market responded by losing 78bp over the following five trading days. On December 11, 2007 the Fed once again lowered rates by 25bp and the mortgage bond market lost 88bp in the next three days. So far this year,the Fed delivered a surprise 75bp rate cut on January 22, 2008 and mortgage bonds lost a whopping 144bp in just 2 days. Eight days later and as widely expected, the Fed cut rates by 50bp. Within 13 days from that 50bp cut, mortgage bonds lost 269bp.

Article written By Barry Habib.

Positve Real Estate News on the Front Page of the Desert Sun

If you didn't get a chance to pick up the Desert Sun today take a look at the great article that was on the front page.

The number of homes sold in the Coachella Valley in 2007 fell 21.4 percent compared to 2006.

Yet average sales prices are holding steady. In the desert's nine cities and two unincorporated areas, the average sales price inched up less than 1 percent, hitting $555,267 last year.
That happened despite average sales prices falling in every desert community except La Quinta.
The year-in-review data, to be released by the California Desert Association of Realtors this week, shows the local housing slump that began in the second quarter 2005 only worsened in 2007.
And while some hope the market stabilizes this year, several economists and real estate experts point to 2009 and even 2010 before the critical residential real estate market begins an upswing.
"I've never seen (sales) plunge this fast," said Patrick Veling, president and founder of Real Data Strategies.
The Brea consultant company compiled the 2007 data based on the Desert Area Multiple Listing Service, which includes sales of existing homes, new residences and condos. Real Data Strategies also provided additional analysis of the immediate Coachella Valley to The Desert Sun.
The new figures show:
A total of 5,860 homes were sold in the nine desert cities, Bermuda Dunes and Thousand Palms.
That's roughly 1,600 fewer homes than were sold during 2006. And it's a 46 percent tumble since 2005.
Average prices for the immediate Coachella Valley increased $5,269 from the average price of $549,998 in 2006.
When comparing 2006 to 2007, the average sales price dropped in every community except La Quinta.
The year actually marked the second consecutive year La Quinta's average sales price increased: from $771,747 in 2006 to $797,201 in 2007.
The implications of the real estate market are far-reaching.
Housing sales have a direct impact on the valley's entire economy, touching countless other industries - notably construction and retail.
"That affects a whole variety of sectors and different parts of the economy," said John Husing, a Redlands-based economist and consultant for the Coachella Valley Economic Partnership.
"It all affects retail, consumer services, banking - all those are impacted."
Dramatic changes
Experts say the first red flags of of the valley's market problems came with the 2005-06 data:
Sales slowed. Prices leveled. It quickly transformed from a seller's dream to a buyer's market.
It only got worse in 2007, the numbers show.
"We have not seen sales activity at this pace," Veling said.
The figures also reveal a first in recent memory: Luxury homes that sell for more than $1 million continue to fare well, while the entry-level home market struggles.
It indicates that people looking to invest in second or third homes are being more selective about when they're buying.
And sellers aren't budging on prices because they're not motivated by need as much as their intent to get top price.
It's "absolutely opposite" of traditional housing shifts, says Greg Berkemer, executive vice president of the California Desert Association of Realtors.
Previous market corrections, triggered by economic recessions started at the top with high-priced homes. Entry-level purchases generally were not affected.
This time, "the high-end kept selling and the low-end collapsed," Berkemer said.
That's a big reason average sales prices have not dipped, and even gone up slightly.
But until the sales prices go down, experts say the desert's large inventory won't diminish.
The valley ended 2007 with 9,186 homes on the market. That is 11.5 percent - or 950 more homes - than at the end of 2006.
It's also about three times greater than the end of 2004 when the housing market was booming.
And as more adjustable rate mortgages are about to reset, Veling said "one could argue" that it will be late 2009 to early 2010 "before this begins to level off and improve."
"The quicker we (stabilize the market)," Berkemer said, "the better off we are all going to be."

Did you know?
With 933 homes, the 92253 ZIP code in La Quinta had the most homes sold and closed in 2007 of any valley ZIP code. The 374 active agents there totaled $743.8 million in volume. Of the nine valley cities, Coachella saw the fewest home sales, with 79 sold in 2007. All but one were entry-level homes below $500,000; the other sold in the $750,000 to $999,999 range.Indian Wells tops all other desert cities when it comes to average sales price. In 2007, homes there cost $1.1 million. The 92262 ZIP code of Palm Springs had the most sales of entry-level homes at 561 homes in 2007.The valley's luxury market, where homes sell for seven figures, makes up 9 percent of all sales in 2007. Entry-market sales make up 68 percent.

Should you wait for the market bottom?

Should you wait for the market bottom?The housing market will continue its downward spiral, forecasts say, and that means opportunities for buyers. But waiting for the market bottom may not be the smartest strategy. Here are 5 reasons to buy now -- and 5 reasons you may want to wait.

By Melinda Fulmer, MSN Real Estate

The best markets in 2007's third quarterThe worst markets of 2007's third quarterForeclosures up 75% in 2007The latest housing headlines are far from encouraging: Foreclosures are up, home prices are down and new-home sales are at record lows. All this dismal news has many buyers sitting on the sidelines, afraid to make a move. But, economists say, waiting for the bottom may not be the smartest strategy.Calling the market low is a difficult task, and it's most often spotted in the rear-view mirror. For one thing, there's no agreement on when the U.S. real-estate market will officially touch bottom. If you believe the National Association of Realtors, it will happen later this year. Investment bank Merrill Lynch is much more pessimistic, predicting that U.S. home prices will drop another 15% this year and 10% in 2009, with perhaps even more depreciation in 2010.

But for many buyers, there's no real need to wait for the market as a whole to officially bottom out, says Delores Conway, director of the Casden Forecast at the University of Southern California's Lusk Center for Real Estate. "Real estate is local," Conway says, and therefore what constitutes the bottom for the country is meaningless for those looking to buy and sell homes in their own neighborhoods. Prices in many markets have not yet hit their lowest point, but they aren't that far off. And in other areas, only the pace of sales has been affected; prices have held firm or gone up. Waiting for the absolute bottom to hit before buying puts you at risk of missing it and getting caught up in a market on the upswing. Plus, for some first-time home buyers, owning simply makes better economic sense than renting.Downturn, what downturn?Of course, in some parts of the country, there's no real reason to get cold feet about buying. Prices have ticked up slowly and are expected to continue that slow march for the foreseeable future. "We have not seen a downturn in our market," says Marianne Ackerman, of The Property Shop in Glenwood Springs, Colo.

2008 Bob Hope Chrysler Classic hosted by George Lopez January 16-20

Get out your golf clubs and your camera. It's time for another Bob Hope Chrysler Classic tournament. The Pros and celebrities will be playing some of the best courses in the desert. From PGA West to the new Classic Club. Not to mention that Jimmy Schmidt and his Rattlesnake restaurant group will be taking care of all the food and catering.

For more info here is the official website

http://www.bhcc.com/

Palm Springs International Film Festival

As one of the largest film festivals in the country, the 19th annual Palm Springs International Film Festival is here. Roll out the red carpet as we get an influx of celebrities and movie aficionados. The A list of celebrities keeps growing year by year. If you have a chance make sure to check out some films.

For more info check out the official web site.

http://www.psfilmfest.org/index.aspx