Interesting Statistic
Interesting statistics: A Real Estate Agent Coaching Client of mine in the Los Angeles area shared statistics with me. Get this. The average sold price is up about 3.6%. However, the average price per square foot of sold property is down over 40%. I found this really interesting. It says to me that people are still buying the same price range home. But they are getting a lot more house for the money.
In other words a person was paying $500,000 for a 2,000 square foot house last year, in 2006. The buyers are still buying for $500,000 but this year they are buying a 3,000 square foot house (that probably sold last year for $650,000) for the same price.
So when you hear the statistic that sales are down but prices are up, consider that does not mean that houses are appreciating. In fact the average price may be up but the buyers are so much more house for the money because they are buying at huge discounts.
All it means is that the buyers in the same price ranges still have the buying power. This makes complete sense. The economy is healthy. Buying power is there. It is simply too much inventory that is driving prices down.
Comments