The Front Steps Price Per Square Foot Debate revisited
I remember seeing a comment on the Front Steps - (great real estate blog too I must say), regarding a listing at 23 Belmont in which one commenter stated, per the tax records, that listing was a ridiculous price per square foot for the location.
Well, apparently the market did not think so because it recently closed (sale price is at the bottom fyi) for $300,000 over its ‘insane’ list price in 12 days on the market with 3 offers.
For what it’s worth I loved the unit and thought it was well priced. My only question was how much were my clients going to have to bid over to win it, and would it be well priced if they did win? These are questions that keep good agents up at night. (As it turns out my clients had to bid zero as they were out of town while the entire process started and finished).
Here’s my trouble with price per square foot totals – and to some extent people who rely solely on numbers to try to determine market value – it is only worth a third of what actual market values are, at least for residential, commercial is a different animal. In residential, where people are going to actually live, the emotional quotient is huge.
Alan Greenspan stated on his interview with Jon Stewart that forecasting hasn’t improved in the past 50 years…if he could figure a way to predict consumer confidence then he would have been way ahead of the curve.
That to me was brilliant because it’s what I’ve been watching for the past 14 years in real estate. If the market responded solely based on facts and numbers prices would never have increased – at least the way they did the past 7 years.
Not that a price per square foot totals should be ignored, simply that they should only be relied upon as part of a bigger picture that takes location, location within the building (if it’s a condo) and rarity of whatever type of property you are bidding on (or selling) into account.
So… what do you guys think about this article on San Francisco’s real estate market?
JadeEJF at October 22nd, 2007 at 10:17 pm ( )Humm, I think lots of things actually, but I don’t fully have time to research the links that would speak to the other side of that story. Apparently the population of SF stayed consistent at around 8 million for the last 50 years or so – don’t have time to look that up either, but I’m sure it’s somewhere. That didn’t stop prices from increasing…
Here’s what I can tell you from a gal on the street…my clients that have office space are running out of it in the city and are suddenly being swamped with people looking for more space to expand. ‘Facebook and Wikipedia just announced they are moving to SF for their HQ’s as the best developers for software are in the SF area, and Facebook bought property for their HQ near the ball park.’
That I am fully disclosing I have not independently verified (I assume it’s somewhere on the web) but was given to me. Also I am inundated right now with Baby Boomers closing up shop in Hillsborough, Moss Beach, Sonoma, Marin…and buying luxury condo’s because they’re getting older and need an elevator and don’t want to be taking care of a house with all it’s maintenance.
So I dunno, you do the math on that one. I just run the hard numbers that are facts and let people draw their own conclusions. I’m not saying the article is not fact, I just don’t think it would be correct to pull a leg off a flea one at a time then conclude at the end, when the flea had no more legs that the flea cant jump because it has a virus…
Meredith Martin at October 23rd, 2007 at 12:36 am ( )Doh! Third time I’ve done that, the population of Sf hovers closer to 800k, rather than 8m. Matt always said ‘dont post when you’re in a hurry’…good thing no one ever reads the comments on Blogs because I realized what I did as soon as I finished my last appt.
Now I’m going to have to look up that damn fact.
Meredith at October 23rd, 2007 at 4:59 am ( )1980 678,974
1970 715,674
1960 740,316
1950 775,357
1990 Census Data for Bay Area
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Then from Wikipedia The City and County of San Francisco is the fourth most populous city in California and the fourteenth-most populous in the United States, with a 2006 estimated population of 744,041.[4]
You get my point, it’s consistent more or less.
Damn I had a good friend tease me mercilessly for misrepresenting the population as the same as NY…think I’d learn.
Meredith at October 23rd, 2007 at 5:04 am ( )Facebook’s moving here huh?
http://www.gregorygarver.com
Anonymous at November 7th, 2007 at 8:37 am ( )I cannot confirm that Gregory…I was told that by a very reliable friend who saw it originally on CNBC.
The only thing I can find to verify that story solely pertains to Wikipedia’s move here next year. Which in and of itself is nice and verify’s half the story I heard.
http://in.reuters.com/article/technologyNews/idINIndia-29959220071011
Meredith Martin at November 7th, 2007 at 3:33 pm ( )Hey Meredith,
Another part of the big picture people miss often are the legal infrastructure in a specific locale as it relates to the price. Just looking at it from one perspective (price per sq ft in this case) will always have pitfalls. I agree!
I noted on my own blog about a recent house I looked at that had some property code issues in the near future.
http://www.yourmortgageworld.com/blog/8/belmont-property-codes/
Robert at November 19th, 2007 at 8:22 am ( )Great information, This can be very usefull….
baton rouge real estate at July 5th, 2008 at 5:32 am ( )Homes are not strictly investment decisions – but when they are not based on facts and sq ft then they can become irrational….bubbles are not usually far behind
Howard
Howard at February 13th, 2009 at 1:25 am ( )