First, let me say Thank you, Thank You, Thank You! to the many, many of you who received my re-launched newsletter last week and clicked on the “tell me what YOU’VE been up to” link, and we were able to reconnect!! It was so fun hearing from so many of you. Keep it up! You are my Real Estate clients, friends, colleagues and all the people who have helped me build my successful Real Estate business here in this Tri-Valley area. Love it!! Thank you!!
Did you notice that I changed my stats charting? I used to watch Inventory in our surrounding cities (Active, Pending and Sold), Foreclosure Activity and Short Sale Activity. When I re-launched the newsletter, I had to take a fresh look at the data, and determine if it was still relevant. I decided it wasn’t. Foreclosures and Short Sales have all but dried up (fodder for a future article!), and since no one ever commented on my inventory numbers (no one – not once!!) I determined that being the interactive crowd you are – this just didn’t matter to you.
So I broadened the areas I looked at to include most of the major areas of our Tri-Valley, and decided to look at Price Per Square Foot – $/, instead of inventory. Since Price per Square foot Active / Pending is usually quite different from that of SOLD (kinda like what you ask for a used car, compared to what you actually sell it for), I included both.
Price Per Square Foot is truly only one indicator in pricing your home. I have colleagues who refuse to even look at it because they believe it is so flawed. And there are flaws, but I still like it as a starting point and then adjust up or down accordingly.
As some of you know, I was licensed in 1990 and spent the first 13 years of my Real Estate career in Corporate Real Estate with Taco Bell and later with Dunkin’ Donuts. Price per Square Foot for corporate Real Estate was THE indicator, since we had a standard foot print (size) that didn’t change much, and we knew based on projected sales, what each lot and building could cost to make the numbers (P&L) work for the restaurant.
So Price Per Square Foot was the first and usually the most important variable in taking down Real Estate for Restaurants (location was already determined – that of course is always the #1 factor in Real Estate decisions – location, location, location!)
Location is still #1 in Residential Real Estate, but Price per Square Foot isn’t such a no brainer. Because so much of our Real Estate value in California is about the land the house sits on, big houses on smaller lots will always have a significantly lower price per square foot, while tiny little tear downs on big lots will look crazy high.
I recently read this article about a Real Estate guy in New York City who bought his first commercial building when he was 17! Can you say “everything is relative?” While our price per square foot ranges from a low of $366 to a high of $655, let’s feel good about our homes not costing the $2,000 per square foot commanded by luxury condos in Manhattan. And ever wonder why consumer goods are so expensive? That same space in Manhattan, ground floor and retail is paying a whopping $10,000 – $20,000 a square foot! WOW!
And just across the Bay in Palo Alto homes are commanding $1,046 a square foot – I still believe that our beautiful Tri-Valley, with its twelve years of great public schools is the best kept secret in the Bay Area. Makes Walnut Creek at $366 look like a deal!!
So as I was averaging prices from Orinda to Walnut Creek to San Ramon, I did recognize that things like that $42 million dollar home in Alamo (Yes, there is a home on the market in Alamo for $42,000,000!) kind of threw things off!! So this is really, really just a starting point, but it’s always fun to see what ball park Price Per Square Foot homes are selling for in YOUR area!
Stay in touch! And know that the greatest compliment you can ever give me is a referral! Thank you for your referrals!