August 30, 2006 at 8:55 AM #7381lamoneyguyParticipant
One of the pieces of data that gets lost in the reporting of median prices is the size of the houses being sold. If increasingly larger and larger houses are being sold and then it is obvious that this is the reason that “median prices” continue to climb/not drop much. Price per square foot would even that out so some extent.
Does anyone know where you can find that data?
~lamoneyguyAugust 30, 2006 at 9:12 AM #33962justmeParticipant
There is some limited data on ziprealty:
One problem with price/area (price/sqft) data is that it
doesn’t capture the “land versus structure” areal size
impact on the total price. Hence it can also look skewed.
Do any of the resident economists have insights to share?
I suspect what we need is to bin (group) the data by lot
size and house size, and deduce a land price and a
structure price (per sqft).
Perhaps property tax data would be helpful, because
it lists the value of “land” and “improvements” separately.
PS: Has anyone noticed how realtors do not understand the
word “area” in the geometrical sense, you have to say
“square footage” or “lot size” :-). For example:
Me: What’s the area of the property?
Realtor: It’s in poway, which is a great school district,
blah, blah, blah
🙂August 30, 2006 at 9:14 AM #33963BugsParticipant
Your question is about the distribution of the data between the current batch of sales and the prior batches of sales that contributed to their respective medians.
Price/SqFt is not that useful because the “price” part of it includes the value of the site as well as the improvements, which can vary tremendously. For example, a 2,500 SqFt home on a 6,000 SqFt lot that sold at $600,000 would result in a $/SqFt indicator of $240; You’d get the same indicator off a 4,500 SqFt home on a 15,000 SqFt lot but that sold at $1,080,000. The $/SqFt indicators are the same but the effects of those sale prices on the medians would be much different.
The way I’ve been analyzing data distribution among the various zips is to separate them using age ranges as the primary and size ranges as the secondary. That works pretty well, but it’s labor intensive.August 30, 2006 at 9:55 AM #33968nlaParticipant
The LA Times report on DQNews lists the price per square foot:
On the latest report, CV has 1.215M median price for SFR and the price per sqft is $399. That would tell us that the median size is about 3,045 sqft.September 1, 2006 at 6:15 AM #34169powaysellerParticipant
The problem with $/sq ft is that the land cost is bundled in. To get a true cost per square foot, you’d have to subtract the cost of the land first.
There is a fixed cost for having an entitled lot for one house, and anything larger does not increase in price at the same rate; for example, my house that I sold was on 5.2 acres, in an area zoned for 4 acre minimums. So the additional 1.2 acres was basically useless and had little additional value. Appraisers added $20K for each additional acre, so the parcel was probably valued at $330K for the land required to build a house (in this case 4 acres), and then $20K for each additional acre.
So an accurate $/sq ft requires knowing the underlying land costs, which is linear only beyond the minimum lot size need for constructing one home.
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