The holidays are upon us and the New Year is just ahead. To that end, today's newsletter skips a personal anecdote and moves directly into the Piedmont Year in Review. (I'll return to embarrassing my husband and kids come January.) For a detailed look at 2017 sales, as listed on the MLS (Multiple Listing Service), click here.
Let's begin with the finding that the price per square foot on ALL 126 recorded home sales in Piedmont in 2017 averaged $823.47 (off-market sales are not reflected here) and the average sales price was $2,183,302. Days on market (DOM) averaged 14 days. Of course, home purchases are not math equations; they are, by and large, emotional purchases. Moreover, many of our homes are hardly, "average." Still, this type of analysis is where most good Agents begin when responding to their client's question: "How much is this home worth and where should we write?"
It's worth noting, with a few exceptions, when we move to larger homes, these properties actually sell for less per square foot than their much smaller counterparts. Often, the most expensive homes in Piedmont (per square foot) tend to be the smaller homes due to the fact that there IS a minimum price to get into this highly-coveted marketplace. In Piedmont, that floor is just under one million dollars. (That's a lot of mullah for a "starter" home!) Thus, a property on Dale offering only 954 square feet, sold earlier this year for $1,126.83 per square foot, and another on Greenbank at 1119 square feet, sold for $1,139.41 (both record-breaking buy-ins). That's great news if you're a Seller, less so, if you are the Buyers.
On the flip side, homes larger than 3,000 square feet traded, on average, at $740.76 per square foot and accounted for about 1/3 of all homes that sold last year here in town, but it stands to reason that once a home is priced above $3,000,000, the air thins considerably. Realistically, there are far fewer Buyers who can not only afford the price tag of these grander homes, but the price of the property taxes as well, which is why Agents advise Sellers to list below the $3,000,000 mark whenever their home is on the cusp. We know that $3,000,000 is a cut-off point for many prospective Buyers on their search engines, but once they get inside a home, they'll fall in love and their competitive natures will kick in. That's the goal; attracting Buyers to step over the threshold and then fight for the house.
So how does your house compare? Is it average, above average, or below? Quantifying a home's "market value" is no easy task. To get close, we need to objectively assess your home's scale, proportion, layout, location and condition and then do our best to "cure" anything that's going to be a major hurdle come time to sell. Even so, where your particular home will ultimately trade is still a question mark as yet to be determined by the buying public (!) (Remember, it's the market that decides the value of any given property - not the Agents.)
Absent a crystal ball, no one knows what the market will deliver at the time you go to sell. We don't know what's going to present as your nearby competition, how the tax cuts will affect the buying psyche, where interest rates will sit, or who will form the available buyer pool in 2018, 2019, or 2020! I can only give you today's analysis and I hope it helps bring good clarity moving forward.
How do 2017 sales stack up to 2016? Favorably.
We had far more units on the marketplace in 2017, despite reports that the available housing stock is shrinking year after year (126 homes transferred ownership in 2017 vs. only 97 units in 2016). Moreover, Piedmont's average selling price per square foot went from $792.30 to $823.47, so in hindsight, 2017 was a banner year to sell. BTW, similar gains were reflected in Berkeley and Oakland as well. (Did you take advantage of them?)
Will 2018 deliver the same punch? In all honesty, no one knows.
It's a given that ALL markets are cyclical and we may be overdue for a correction.Then again, we may continue to climb. (How's that for ambivalence?) With too little housing stock to meet current demand, record-setting stock market gains, continuing low interest rates, highly-paid professionals, good employment opportunities, and glorious weather, the Bay Area should continue to attract well-educated and well-heeled Buyers and that's always good for homeowners and home-ownership in general.
On the other hand, no one really knows how the new tax laws will affect the overall marketplace. It's quite possible that with the reduction in property tax deductions, the affordability index will be impacted. I gotta believe it's going to have an impact in California, New York, Florida and Hawaii. In short, if you are thinking of selling in the next few years, you may want to accelerate that process.
Staying? Leaving? On the fence?
It's never too early to prepare. I often work with Sellers who are years away from selling, as well as those who call in a panic and want their house on the market right away. Whatever your goal, I'm here to provide information and answers. I am here to be of service. (Aren't we all?)
Whatever your plans moving forward, I wish you a happy and healthy New Year. As 2017 draws to a close, I want to take a moment to thank all of you who have not only supported me this past year, but rallied around my professional move to McGuire Real Estate as well. I'm looking forward to helping you, your family, your colleagues, and your friends in 2018, and well beyond . . . I'll be here, before, during and after.
How can I help you?
Check out my home services list: juliegardner.com/our-team
P.S. My new email address is: firstname.lastname@example.org
Julie Gardner, has been writing The Perspective for 15 years and has published more than 600 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.