For all homes in East County that have sold since April 2014 I found the following data on the price per square foot:
The price per square foot in 2014 was about $205 on average. The price today is about $235 per square foot today which is about a 15% appreciation in value over 2 years. Note that it is difficult to compare the sold price in an ‘apples to apples’ situation because of how vastly different the homes can be in size. It was really all over the board to compare the final sales price. I feel like the price per square foot helps break down the differences in size.
Then when we do the same graph specific to Lafayette, this is what is found:
The price started around $185 per square foot and is now hovering around $200 per square foot. This is about an 8% appreciation in value.
All of this is nice, but how do things look in Indian Peaks? I think this is important to look at because (for example) Blue Heron is notoriously behind Indian Peaks in the price per square foot (by about 25% consistently)
So for Indian Peaks specifically:
The price per square foot started around $180 in 2014. Now it is hovering around $205 per square foot. This represents almost 14% appreciation in 2 years.
For the Indian Peaks neighborhood it is easier to compare the average sales price, since the homes are overall more consistent in size and construction. The average price in 2014 appears to have been around $910,000 and now its reflecting around $1,050,000 – again, this is about a 15% increase in 2 years.
SOOOO— the big question is how does this information fare against the smaller homes in Indian Peaks. Using the data that we consistently collect for our statistics updates, I was able to compile the following graphs. These are based on all homes with <4999 sq ft on a quarterly basis.
The price per square foot on a quarterly average was about $166 in the first quarter of 2014. In the last quarter of 2016 it was about $192 per square foot. This is about 15.5% average increase in 2 years.
Looking at the quarterly average sales price for homes <4999 in Indian Peaks we can see that in the first quarter of 2014 the average linear average is showing a price of $575,000. The average sales price in the final quarter of 2016 is about $670,000. This is about a 16.5% appreciation in value since 2015.
The data suggests that over the past 2 years the larger homes have been tracking pretty closely in appreciation to the smaller homes throughout Indian Peaks.
My impression of the future of our market includes a few things:
- If interest rates go up, the pressure from Buyers will likely decrease causing the drastic appreciation in value to slow for all homes and property types.
- The marijuana money in the marketplace is having a significant impact. I am seeing and working with people who have LOTS of pot cash who are using the money to buy property outright. I don’t see an end to this in the future and believe it will have a continued effect on the accelerating prices in the marketplace.
- The Baby Boomers are retiring and transferring their wealth to their heirs. This transference of wealth has just started and I foresee it continuing for the next 5-7 years, possibly longer. I don’t see an end to this in the immediate future and believe it will have a continued effect on the accelerating prices in the marketplace.
- Google is coming… need I say more? I’m sure that you anticipate the wave of wealth this will bring to our area. I don’t think all the Google’ers will be coming and buying million dollar homes. In fact, I see them as families who earn about $100,000-$150,000 annually. Therefor, I foresee most of the Google employees moving here and buying the littler homes allowing people (like yourselves) to move up into the larger homes. This will help drive the $1m+ category of homes in a way that we have not seen over the past 10 years.
- Not just people from Google are establishing here. There is a mass migration into our state at this time that is going to continue to drive people into the smaller homes, and those of us who are established into the larger ones.
Of the 5 items driving the marketplace I foresee one of them as likely to slow the market and all the others to continue to drive the market. I don’t get the impression these things will change any time soon.