What does real estate cost in the US?Real Estate Thursday, October 24th, 2013
Last issue’s column was dedicated to a discussion of the cyclical nature of real estate values and how those cycles come about and relate to the general economy. We are currently coming off a serious devaluation of real estate and are now in an expansion phase where inventory (supply) has diminished and buyer confidence (demand) has begun to increase.
As a follow-up to that discussion, this week we are just going to look at the numbers, and compare the median prices of homes in the four areas of the U.S., and then focus on our California market. First of all let’s have a definition. The median price is the midway point of all the properties sold over a given period. If 101 houses were sold in a month, the median would be the price of the house at number 50. This is not the same as the average or mean price which you would arrive at by adding the sales prices of the 101 homes together and then dividing by 101. The median is a more accurate indicator than the average as a few very high or very low prices can skew the sample.
OK, so now that we know what the median is, let’s look at the U.S. as a whole. The National Association of Realtors gives the current median price in the Northeast as approx. $271,000; the West at $287,000; the Midwest at $168,000 and the South at $183,000. The Northeast and West are faring better than the Midwest and South. These numbers are very current, tallied in late September 2013.
Turning now to our fair state, I looked up the median prices for California every decade starting in 1973 when the median price for a home was just $31,000. In 1983, the median was $114,000; in 1993, it had jumped to more than $188,000. The ’90s saw a tripling and in ’03 the median was more than $371,000. We then slumped but the 2013 median came in at almost $379,000.
Looking at the California numbers today, these attributed to the California Association of Realtors, we find our star to be the Bay area, with the median in San Francisco coming in at more than $636,000. The highest number was reported in San Mateo at $912,000 and the lowest in Solano at $250,000. Southern California comes in with a median in Los Angeles at almost $353,000, in Orange County a high of $619,000 and San Bernardino with a low of almost $162,000. San Diego is in the middle with a median sales price of almost $437,000.
The trajectory is assuredly up with most foreclosures absorbed, and confidence on the rise. Going along with our lopsided division of wealth in the U.S., it was reported that sales of homes priced at more than $500,000 are up some 34 percent during the last year, and the priciest regions – Marin, Orange, San Diego and San Luis Obispo continue to push the statewide medians to new highs. This is surely not news, but it is interesting to have a look at the numbers just to keep things in perspective.
Del Phillips is a California Licensed Real Estate agent. He is a member of the National, California and San Diego Association of Realtors. You can reach Del at Ascent Real Estate at 619-298-6666 or at Del@DelPhillips.com DRE LIC #01267333.
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