Now that the first half of the year is over, it is time to take a look at where prices really are. DataQuick regularly publishes their statistics comparing this year to last, but they look at it a little differently than I do.
My information comes from the SoCalMLS, so my numbers don’t include the private sale transactions, new home sales, or foreclosures that go back to a lender.
I have segmented the monthly closed sales into price groups so that the comparisons should be fairly similar types of properties.
The graph below shows the combined the sales for Lake Forest, Mission Viejo, and Laguna Hills. These areas are of similar age, with low property taxes, good schools, and are mostly tract homes that were built in the 1970s. The average lot size in these communities is also fairly close. I didn’t really look at the numbers above $1.5 Million because at that point there are too many individual features and factors besides size and condition that will impact the price per square foot. Even between the $1.0 million to $1.5 million marks, there are little 30 year old 1350 square foot lake front homes on 3300 square foot lots, being compared to 4 year old 3300 square foot homes on average size lots with views. They really don’t compare on a $/square foot basis because the buyer who wants one, will not trade for the other by adjusting the price or condition.
So far, for 2007 the $/square foot is consistently lower in every price grouping, by somewhere between
7.5% 5% to 10%. With the current state of the mortgage market, with no more “sub-prime” 100% loans, and the increase in the rates for jumbo loans, buyers who can afford (or agree) to pay these prices will be harder and harder to find.
My advice to sellers today is that if you have an accepted offer on your home, do everything you can to keep the buyer moving toward the close. If the buyer walks away, it may be very difficult to find another one!