T H E D E S E R T ’ S B U S I N E S S & P U B L I C A F F A I R S W E E K L Y


SERVING ALL OF THE DESERT CITIES AND UNINCORPORATED AREAS OF RIVERSIDE COUNTY IN THE COACHELLA VALLEY


New home industry gears up for a comeback W


BY KENALAN


ith more than four decades of experience in the construction industry, Mickie Riley reads the Coachella Valley residential real estate market like a cardiologist interprets an EKG. While he, like most other industry experts, is not calling for a quick turnaround in the


new housing market, he sees many signs that the industry will soon be mobilizing – to various degrees – to meet what is looking like a ramped up need for new homes in the valley in the near future. “I feel that the market has started to get a


pulse going in the last six months,” says Riley, President and CEO of The Rilington Group based in La Quinta. “Looking at the extremely tight supply of existing homes, even when you include the bank-held shadow inventory, the region will soon need to produce more new homes to meet an emerging demand. I’m not saying we’ll be going full speed or will ever get back to the out-of-control pace we saw during the 2003–2006 boom, but the elements of a restart in new home construction in the Coachella Valley are starting to emerge.” Riley knows much better than most how to


assess the housing market of a given region. As a very successful homebuilder in the greater San Diego region who worked his way up through the ranks in the industry, he saw the Coachella Valley boom coming well ahead of most everyone. He began buying residentially zoned land in the desert in 2002 and amassed more than 3,000 lots from Hemet to Imperial Valley. Subsequently he sold the Hemet and Imperial County lots and focused on the Coachella Valley where at one point he had 15 new home communities going in one form or another – from the entitlement stage to ongoing marketing and sales. “The local builders create the forward momentum in new or emerging housing


At the height of the new housing boom, Mickie Riley, president and CEO of The Rilington Group had 15 communities, some like the one shown above in Indio, going in various stages from entitlement to marketing and sales of homes.


markets,” says Riley. “They get it started and then the big publicly held builders come in to compete; they are not pioneers but we are. When the publicly traded builders converged in San Diego and drove land prices through the roof at unsustainable prices I looked at several other regions and the desert came out on top as the best opportunity.” His instincts proved to be right and led to


his company, Rilington Communities, to generate sales of close to $100 million per year during the housing boom; they even won the award for Builder of the Year from the Building Industry Association in 2005. “I’m proud of what we’ve accomplished in the industry over the years as a diversified builder of a wide range of home types but we are looking forward to the next cycle ahead too.” The number of existing home sales, along


with median and average prices all increased in May 2012 over May 2011, according the latest data from California Desert Association of Realtors. As of early August, the inventory of existing single family homes in the Coachella Valley remains in the low two thousand range – similar to the number of


homes available in the mid-1990s when the local population was less than half of what it is now. The residential market is where Peggy Sue


Lane, Vice President of First American Title in Palm Desert, has seen the most traction lately in local real estate. “We’re starting to see more and more transactions with fewer short sales and REOs – we’re seeing more traditional resale transactions and we’ve got sellers coming into the market willing to list their properties because they know they won’t have someone come in and try to do a fire sale with them,” she said. Many realtors and buyers of existing homes


in the valley report a situation where there are multiple competing bids in most cases for desirable homes in good locations. Not all of the buyers are investors; many are local residents who made it through the recession with credit intact who are pouncing on incredible deals based on low prices and historically low mortgage rates. Canadians and other snowbirds from throughout the U.S. continue to buoy the local market in a major way too.


REPRINTED FROM ORIGINAL ARTICLE PUBLISHED AUGUST 7, 2012, VOL. 36, EDITION 32


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