March 6, 2014
This report provides data for homes priced above $1 million in Placer, Sacramento and El Dorado counties. It provides several charts that we hope you find interesting, along with our interpretation of them.
As you can see the number of homes for sale (201) is about 20 times the number that sold (11) in Feb 2014. Roughly 5% of the homes on the market are actually selling. This makes your choice of realtors very important. Please note this report is showing averages and the details of your specific community may be quite different.
The fundamentals of real estate are still true. Location, quality, amentias and life style are all very important decision criteria. Naturally, all of us are looking for the best possible deal, so price with respect to the market is a heavily weighted factor in a buyer’s decision criteria; especially when there are so many luxury homes available.
The literature is showing more signs of an improving market for upper end homes across the nation. The market in the bay area has become a lot more competitive, which is a good sign for our market as it tends to be a leading indicator.
The chart above shows the average percent of original asking price received by owners whose homes did sell. It is indicated by the blue line with triangular markers. It also shows how long properties that sold were on the market before they received an acceptable offer.
As you can see, luxury home owners on average received 86% of their original asking price in February of 2014 and the average varies between 84% and 96%. Pricing in the luxury market is critical, and a good luxury home agent can share their deep understanding of the market with you so you can make a wise decision on pricing your home.
You can also see the pink colored bars which show the average time to get an acceptable offer was 126 days in February of 2014 and varies between a low of 67 days and a high of 205 days. It is important to understand this refers to the time it takes to get the offer. The escrow process, including time for due diligence and funding can add considerable time. Simple transactions can move as quickly as 30 days or less, and complex ones can take much, much longer.
The chart shows the average price per square foot for luxury homes in the Tri County area. As you can see the average varied from a high of $297/sq ft to a low of $243/sq ft.
This is an interesting indicator of home values that needs to be considered with caution, especially in the luxury home arena. First, these are average and the numbers can and do vary dramatically by area. Second, many luxury homes are custom built and the features, floor plans, finishes, architectural design, lot, landscaping, appliance selection, energy efficiency and more all enter into the value of the home.
While it is tempting to look at this chart and multiply the size of your home by the average price per square foot, the answer you get is likely to be wrong, in either yielding a price that is too high or one that is too low.
There are a lot of factors and moving parts that enter into selling a luxury home. At Lotus Real Estate Services we understand them quite well and have been able to translate that understanding into sales in times much shorter than the average times and for prices higher than the average percentages reported.
If you are interested in buying or selling a luxury home, please contact us to discuss your desires so we can mutually decide if we should work together to turn your desires into reality.
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