The other day I was having a discussion at a board meeting about what sales price was the benchmark in our market for the top 10% of sales prices. It had been over a year since I had calculated it, and at that time it was surprisingly low, at just under $350,000. Meaning that 90% of all home sales in our MLS were lower than $350,000.
I was curious to do the math again to find out what that number was for 2012. We have seen prices trending upwards, generally. It seemed reasonable to think that the benchmark number would rise as well. Although, I couldn't help but wonder the effect of so many sales in the entry level, affordable ranges fueled by the current investor frenzy.
In Kootenai County in 2012, there were 2,343 home sales of all types, excluding manufactured homes. Sorting them in descending order, the 234th highest priced home to sell was for $385.000. So, any home priced at $385,000 and above is in the top 10%, the upper price tier of homes for sale.
What does this mean? For practical purpose, not much. The top 10% is typically referred to as the luxury home market in the real estate industry. Luxury home web sites will have minimum prices for homes to be showcased there. Usually it will be the top 10% or a minimum of $500,000. More than anything, our relatively low top 10% illustrates that the majority of Kootenai County residents are working folk.
And more importantly, it tells us that those who have an home to sell in the higher price ranges will have a smaller pool of prospective buyers. Be sure to take this into consideration when you plan your pricing and marketing strategy.
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