Has new trends and products in your market thrown a wrench in Average and Median Prices?
What I mean by this is that Las Vegas has several new trends in their resale market: condo conversions and patio homes. The highrises have not yet had an impact on our resale statistics - and probably will not for another 2-3 years.
Las Vegas has a land scarcity issue which has forced builders to get creative and build a little differently.
- Condo conversions (apartment complexes converted to condominiums). Over 14000 apartments were converted to condominiums in 2004 & 2005. This introduces a twist to our resale market that did not exist prior.
- Patio Homes. A patio home is on a very small lot, sometimes sharing driveways and sideyards. These started popping up like crazy in 2003/2004.
Both of these styles of homes have produced "affordable housing" in our market which I think has had a direct impact on median and average prices as of late as we are seeing these new products enter the resale market. They are also appealing to many types of buyers which is the reason why the below $250K priced market remains hot: entry level (inexpensive), retiring boomers (inexpensive and low maintanence), vacation & second property owners(inexpensive and low maintenance), investors (inexpensive). Many of these neighborhoods are gated which gives the homeowner a sense of security whether false or not.
We will soon see the single family residence on a decent sized lot disappear from the new construction market in the valley as the land disappears faster than money on a blackjack table.
What's going on with trends/products in your market?
Michael: I like how the MLS monthly data is broken down in your area. Salestraq does that for new construction and when you see the growth and appreciation for different types of homes it is much better than looking at as an all in one solution! Our MLS does break it up by SFR and Condo/Townhome. The patio homes are considered SFR and the condo conversions are considered condos. Therefore, they could be watering down the prices in both of those categories!
Jeff: I think different areas call things differently. I do think in areas where we are seeing more high density housing being built QUICKLY to accomodate growth that the high density/lower priced housing is skewing prices
Colleen..... where is my crown? lol Renee..... you do make a good point that those properties that you mentioned do lower the prices...... especially condo conversions... why? The foundation is already up... a large part of costs... Great Point in regards to costs...
Renee that is why it is good to break down averages as much as you can. You can do it by subdivision, size of house, type of housing.... the point is the more narrow the focus the more accurate you will be.
We have seen some towns have a huge increase in average price (30+%), but the reality is existing had maybe a 8% increase. The overall average went up big time, but it was due to a high end new construction site and nothing to do with the true increase of existing homes. At the same time there are some towns that the average sales price has gone down due to low end condo conversions and hundreds of cheap units closing all at once.
These are easy to exclude if you keep your focus narrow and then the number mean something.
Great Post, thanks.
I actually grew up in a 'patio home' - a Hollywood Bungalow - we shared a common drivewy with our neighbor. We both had a dtached 1 car garage with a common wall in the middle.
In Hemet, the market has traditionally been older homes from the 30's to the 70's with a few 80' and a even fewer 90's era homes - then all of a sudden, it's like everything was built this decade - how do you figure a medium on that???
JOHN OCCHI, HEMET REALTOR
www.JohnOcchi.Com
We have all of the home styles / types in my area, Maryland and Northern Virginia. What is built is determined by land costs. As land becomes more expensive, the lots get smaller. Cost of construction is still the same, so the prices of the smaller lot construction is lower.
We have all of them. Mmmmm, inspiration for an article.
Lenn
Renee,
Thanks for the post. We still focus on the median price since we have such radical swings within a given town.
HAHAHHA! I just say that because I am from Omaha and people always ask me if I had a "pick em up truck with a gun rack"
Then I gotta tell them, no I was not born in a barn, no I have never milked a cow, now I didn't live on a farm people...
I just gotta roll those eyes and make em realize that Omaha metro is as big as Las Vegas metro.
Renee, here was my trip to Nebraska:
http://activerain.com/blogsview/My-Trip-to-Auburn-Nebraska?10262
My husband's family is all from there. We're going up next month to say "good bye" to his grandfather. I really think they were all born in barns. They were definitely all raised on farms!! I got a framed picture of me driving the combine for xmas from his mom!!