As a working Realtor for 16 years I have spoken to hundreds of real estate buyers. There are two common questions that always seem to be asked. First, buyers ask, “How long has this property been on the market?” Second, they ask, “What is the price per square foot?” These are not bad questions, of course, but there is so much more to it.
Here are two better questions. What are the comparable sold properties in the area? The second, what is the inventory like in that price range? Here is another one. Is this the smallest home in the tract or the largest home in the tract?
Price per square foot is one measurement but it can also be misleading. Today in Laguna Niguel there are 38 homes active on the market between $1 and $2 Million. The average price per square foot is $390. Also in Laguna Niguel today there are 49 homes active on the market between $700k and $1 Million. These homes are listed at $304 per square foot. Single story homes will always sell for a higher price per square foot than a comparable two story. Another deviation is that within any given tract the smaller homes will bring a higher price per square foot than the largest homes in the tract. Also don’t forget the all important remodeling, views and location.
The low inventory we are experiencing is causing multiple offers on some homes, which I, Ron Buck Realtor, have written about in past weeks, but why would a detached home listed in the high $400k range linger on the market when there are only 3 detached homes for sale today in Laguna Niguel under $500k? One reason is there may be some feature or location issue that is hindering buyers and the second is that it may be overpriced.
Here are some statistics that I, Ron Buck of JonRon Real Estate find fascinating. No matter what the market seems to be, the SOLD price per square foot on average is in the range of 97% to 100% of list price at time of sale. That is list price at the time of sale, not original list price. With all the short sales this year the price per square foot on average at the time of sale is more like 94% of the original list price. Why then do I, Ron Buck, occasionally suggest that my buyers offer OVER list? The reason I would, is that based on the comps and unusually great condition or location, it becomes evident that the free market will drive the price up. Don’t forget that buyers always are the determining factor on what real estate is really worth.