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(English) Pricing Is ALWAYS Local … Most of the Time

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5 comentarios
  1. Troy Roark
    Troy Roark Dice:

    Isn’t is interesting? In our little pocket of Real Estate nirvana (Springfield IL), we have NOT seen an overall depreciation. In fact, our median home price is up, according to our local Real Estate Association statistics.

    I encourage my clients to spend a whole lot more time concentrating on what the neighbors house sold for, instead of what the news says. Again, I know we’re a insulated market.

    I will say this: From a national point of view, if housing numbers are bad enough, the Fed seems much more likely to drop interest rate to bolster sales. A silver lining if nothing else.

    Responder
  2. David Mott
    David Mott Dice:

    Trulia and Zillow can produce a median price per square foot (ppsft) sold number for a city area, with the larger the number of samples, the more accurate the value.

    Trulia has the median ppsft for San Diego at $254. San Francisco is $500. Seattle is $277. Detroit, MI is $63. Denver, CO is $168.

    The number for Eugene, OR is $139 right now. It fluctuates. The insurance man here says that homes are insured on a rebuild rate of $130 sqft. An appraiser just appraised our house and his square foot comp adjustment value was $50 a square foot. There is no way that you could build this house for $50 a square foot.

    A previously owned home (and lot) seems to have an elastic value from many different perspectives.

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  3. Karsten Reed
    Karsten Reed Dice:

    Cost per square foot is a dangerous valuation technique. There are so many variables that influence a homes value, including location, condition, quality of construction, square footage, age, etc….

    I have seen way to many people make purchasing decisions with primary emphasis placed on a $ per square foot, rather than location or quality of construction/condition, which are factors that influence $per square foot.

    In our market there is an oversupply of homes and in many cases sellers have to practically «give them away». Some homes don’t sell and it is common to see homes selling for far less than the cost to construct.

    An insurance value is usually not going to be reflective of a market value due to differences in approach to value. The bottom line is that a bank is only going to loan what can be supported by market data, and if market data indicates that a home is worth «50 dollars per square foot» then it doesn’t matter how much it costs to build.

    The safest bet before purchasing is to call a local real estate appraiser and get their feedback on the market you are interested in purchasing property in.

    Responder

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