Property prices have soared in the City of Angels with an average year-over-year increase of 40%. It’s the housing boom all over again and I feel like I missed out….again. Crap.
So, instead of waiting five more years to see the market tank and then buy a house, I’m realizing there’s no such thing as timing the market. I might as well jump in and get my feet wet. Researching “starter” homes in okay neighborhoods, mid-to-high-$300’s get’s me a 2 or 3 bedroom house that averages around $300 per square foot. Not too shabby, but being that I want a good deal, I’d like to stick to a budget of $250 per square foot, instead. That means a smaller home or a home in a shadier neighborhood.
As a comparison, I researched what homes are selling for per square foot in a few other cities to gauge if Los Angeles was absurdly out of control. Here’s a breakdown of a select few (information from Trulia.com):
- Denver – $240/square foot
- St. Louis – $78/square foot
- Portland, OR – $210/square foot
- Seattle – $300/square foot
- Durham – $115/square foot
Obviously, it’s comparing apples to oranges looking at these cities, but it gives me somewhat of a guideline – if I could snag a house at under $300/square foot, I’d be in pretty good shape.
Of course, using online sites isn’t the most accurate place to look for houses, but it’s a start. It allows me to get an idea of what’s out there and what’s selling. Another benefit, or drawback depending on how you look at it, is some of the sites have comments from realtors. Many comments in my area mention that cash-sales are dominating the market, especially when there are multiple offers on a property. Obviously, I can’t compete with cash-only offers, but if a few more properties pop up in the next few months, I might be able to score something reasonable by early next year. I once read that December and January were good times to buy property and that might be my chance to find a bargain.
What are property prices per square foot in your area? Are properties skyrocketing?
8 Comments
Wow, 40%. That’s nuts. I think our area is up 15-20%. I’m not sure though since I’m not house shopping at the moment.
@Joe – Yes, that’s California for you – a truly bubble mentality. I think housing prices are up about 15-20% nationally, so I wouldn’t be surprised if prices were increasing by at least that much in your area.
My college town sees regular but not insane appreciation. Although prices feel high to us (and property tax rates of 3.5% or more don’t help), they’re a bargain to professors and others relocating from oh, say, Southern California.
I live in one of the most popular neighborhoods. And someone who just sold a home in Los Angeles or Boston thinks a 3 bedroom house for $250,000 is a steal. So they’re fine with a bidding war that drives prices up for those of us working for nonprofits and who don’t have a huge capital gain from selling our last house.
Good luck with your search. Christmas can be a wonderful time to find a bargain. The people who are selling over the holidays really need to sell. And most buyers aren’t interested in looking during the holidays.
@Pamela – $250K does sound like a steal coming from SoCal! However, everything is relative. The one benefit here in California is that property taxes are fairly low at 1.5%. Thanks for the confirmation that the holidays are a good time to buy.
price per square almost always depends on the location!
I’m in the Houston area. Based on our two houses in the suburbs (one 1750 sq. ft. and one McMansion pretty much at 3750 sq. ft.), the price per square foot is $68-$70. I was actually surprised to see that both homes were in that small of a range. Good to know! And now I don’t feel nearly as money-guilty on our new home splurge…
Housing prices around here are starting to recover and I do feel like I missed the boat. But I think you are right, timing the market might be a fools errand. A house is much more than just an investment, and I want make sure I don’t rush anything.
@Michael – I’m not rushing, just hoping to find a reasonable deal (or something affordable!)