Irvine Housing Prices Chart
I’ll never be confused for a high level economist. But my command over 5th grade mathematics is masterful. I can add and divide using a calculator better than most people I know.
Self deprecating humor aside, when I hear reports about the housing market on the news, they always speak in the broadest terms. “New home sales have declined X percent nationwide. Foreclosures are up X percent over last month.” As a buyer or seller of Orange County real estate, how can you apply that information in a meaningful way? Yeah, I’m not sure either…
I wanted to better understand housing market changes on the city level. So I decided to choose a city, choose a house type (3 bedroom, detached homes), and chart the average price per square foot based on 3 month comparable sales. Here’s the logic: if you decide to sell your home, the price will be determined by the sale of similar homes in the last 3 months. So if an appraiser came to your home on January 31st, he would be looking at sales that closed in the months of January, December, and November.
When you look at the chart, the number shown for a particular month is the average price per square foot of all the comparable 3 month sales. Let’s look at Irvine:
Here, you can see the last 2 years of sales, along with June 2006, which I included as its $469/sqft is right round the peak of the market. Over this period the average ppsf has fluctuated between $357 and $400. This also shows the seasonal midsummer price bump we’ve come to expect as most people prefer to move in the summer time before the traditional school year begins.
So there it is. Granted, it’s by no means a perfect system. A few multimillion dollar home sales, or a significant drop in the total number of homes sold in a given month could skew the numbers quite a bit. But I do think there is some real world application to the data. If nothing else, it reminds me that these grand, nation wide figures we hear in the media don’t tell much of a story. In much the same way, these city figures are still too broad.
For those considering an Orange County purchase or sale, consult with a professional real estate agent to focus on pricing in your local neighborhood and on houses that are the most comparable to your property or the property you’re looking for. If you aren’t already working with an Orange County real estate agent…well, let’s just say I know someone waiting to dazzle you with his tireless work ethic and above average calculator skills.