Price Per Square Foot: Has Redwood City Hit Bottom?
One of themes we harp on here at Cirios is how home price trends are becoming increasingly localized as individual real estate markets grope for a bottom.
Some areas, particularly the hardest hit by foreclosures, have seen fantastic price declines. Others, mainly the high end, are only recently feeling the ill-effects of job losses and our slumping economy. And while this dynamic makes for a tricky housing market, it also breeds opportunity for those savvy enough to identify which markets will be the first to stabilize and eventually rebound.
Take a look at the 2 graphs below showing price per square foot in Redwood City, CA.
The first shows all residential sales in Redwood City. The steep declines in 94601 and 94602 not only show price declines, but help illustrate how areas with high foreclosure rates — like these 2 zip codes — are seeing steeper price declines than areas that are holding up better. (For more on this subject, read about foreclosure sales effect price data.)
The second graph shows 1 segment of the market,
homes with living areas of 1,200 - 2,500 square feet.
While a somewhat arbitrary cutoff, the idea is to pick
like homes within each area to try and compare apples
to apples.
What we see is that in the second graph, is that the “spread” between each zip code, that is, the premium you pay to live in 94063 vs. 94601 or 94602 remained essentially the same throughout the boom and into the bust. Meanwhile, the first graph shows that price per square foot in 94063 (the least desirable part of town) almost touched 94061 (the most desirable part) right around the peak of the bubble.
So what does all this mean? 2 takeaways: First, be skeptical when you look at housing market data, since very small changes in data collection can lead to quite different results. Second, real estate always has been, is, and always will be local. No national, statewide or even citywide trends can capture what’s going on at the street level.
Want to see this analysis for your town? Contact Cirios Real Estate today!