Comments on: REO sold for $246 per sq. ft. http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/ Tracking the Arcadia and San Gabriel Valley Housing Market Thu, 08 Jan 2009 21:55:47 +0000 http://wordpress.org/?v=2.5.1 By: TheArcadian http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3036 TheArcadian Fri, 27 Jun 2008 16:52:42 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3036 Kerin, Custom homes can very well cost up to $250+/sf to build. From what I understand, it entirely depends on the materials used. I think a large home that skips on the marble, excessive use of granite, high-end fixtures and exotic landscaping can be built starting at $150/sf. I hear from contractors that their labor costs have been dropping due to lower demand. This also plays a significant part in replacement cost. As you alluded to, land plays a large role in the valuation of real estate. Of course, all that went out the window during our housing bubble. But as you probably know, property is appraised using 4 methods: Home Sales Comparison Land Sales Comparison Cost Approach (replacement cost) Income Approach (for multi-family & other commercial RE) Assuming you have plenty of current data, these 3-4 steps will give you the most accurate "market value" of any property. Since I run these types of numbers all day at work, I guess it's time to write a post about it instead of a long comment. Kerin,

Custom homes can very well cost up to $250+/sf to build. From what I understand, it entirely depends on the materials used. I think a large home that skips on the marble, excessive use of granite, high-end fixtures and exotic landscaping can be built starting at $150/sf.

I hear from contractors that their labor costs have been dropping due to lower demand. This also plays a significant part in replacement cost.

As you alluded to, land plays a large role in the valuation of real estate. Of course, all that went out the window during our housing bubble. But as you probably know, property is appraised using 4 methods:

Home Sales Comparison
Land Sales Comparison
Cost Approach (replacement cost)
Income Approach (for multi-family & other commercial RE)

Assuming you have plenty of current data, these 3-4 steps will give you the most accurate “market value” of any property. Since I run these types of numbers all day at work, I guess it’s time to write a post about it instead of a long comment.

]]> By: Kerin Cantwell http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3030 Kerin Cantwell Fri, 27 Jun 2008 05:24:06 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3030 This is quite a deal. Most people I talk to seem to think $200-$250 per square foot is what new construction/replacement value is. What does this price say about the land value? What is your take on replacement cost? This is quite a deal. Most people I talk to seem to think $200-$250 per square foot is what new construction/replacement value is. What does this price say about the land value? What is your take on replacement cost?

]]> By: TheArcadian http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3027 TheArcadian Thu, 26 Jun 2008 23:15:46 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3027 Yea, for $1MM you get the luxury of living behind someone. Hah. Larger homes "should" have lower $/sqft but if you look at Arcadia, the majority of ~4,000sf homes are currently listing between $350-430 per sq. ft. So price it down to under $300 and it will sell. Yea, for $1MM you get the luxury of living behind someone. Hah.

Larger homes “should” have lower $/sqft but if you look at Arcadia, the majority of ~4,000sf homes are currently listing between $350-430 per sq. ft. So price it down to under $300 and it will sell.

]]> By: TheArcadian http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3026 TheArcadian Thu, 26 Jun 2008 23:11:09 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3026 Homes in Arcadia will sell if they are priced correctly. Apparently, this one was at $246/sf. Homes in Arcadia will sell if they are priced correctly. Apparently, this one was at $246/sf.

]]> By: ReluctantSideliner http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3020 ReluctantSideliner Thu, 26 Jun 2008 18:48:38 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3020 I have seen this listing before. It's a crappy 2 houses on a lot sort of deal. This house is actually the backhouse. To get to the lot, you need to drive down a narrow driveway. Check out the area view on redfin. The house seems "nice", but technically there's no curb appeal at all. This would partly explain the rather low $$/sqft. Also, it's a rather large house. Large houses tend to have lower $$/sqft. I have seen this listing before. It’s a crappy 2 houses on a lot sort of deal. This house is actually the backhouse. To get to the lot, you need to drive down a narrow driveway. Check out the area view on redfin.

The house seems “nice”, but technically there’s no curb appeal at all. This would partly explain the rather low $$/sqft. Also, it’s a rather large house. Large houses tend to have lower $$/sqft.

]]> By: T K Eng http://www.arcadiahousingblog.com/2008/06/26/reo-sold-for-246-per-sq-ft/#comment-3019 T K Eng Thu, 26 Jun 2008 18:44:26 +0000 http://www.arcadiahousingblog.com/?p=498#comment-3019 I called the agent as soon as I saw this property featured on your blog. The agent did not return my calls until a week later, only to tell me that the property has been sold. The median home price in Arcadia is still falling, but the speed at which this property had moved off the market also shows: (1) demand for housing in Arcadia is still very high and (2) there are still plenty of qualified buyers waiting on the sidelines. These factors will keep Arcadia prices high for sometime to come until other factors come into play like the early 90's-e.g. massive layoffs of high paying workers-which has not happened yet in SoCal despite all the gloom and doom news. I called the agent as soon as I saw this property featured on your blog. The agent did not return my calls until a week later, only to tell me that the property has been sold. The median home price in Arcadia is still falling, but the speed at which this property had moved off the market also shows: (1) demand for housing in Arcadia is still very high and (2) there are still plenty of qualified buyers waiting on the sidelines. These factors will keep Arcadia prices high for sometime to come until other factors come into play like the early 90’s-e.g. massive layoffs of high paying workers-which has not happened yet in SoCal despite all the gloom and doom news.

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