I commonly hear realtors and homeowners use price per square foot calculations when assessing the value of a home. But using price per square foot as a shortcut to determining the value of a home is flawed. Price per square foot is not a reliable indicator of market value because when you only calculate the relationship between size and sales price you are ignoring all the other variables of a home that a potential home buyer analyzes like view, lot size, level of finish, location, and much more.
Blog Category: house prices
Who doesn’t want something cheaper? But who doesn’t want it faster, better and delivered on time as well? It is life’s constant struggle. We work very hard for our money and want to be judicious in spending it. We want the $5 hamburger for $4. We want the $35,000 car for $32,000. We want the $500,000 house for $485,000, and if the same house were priced at $485,000 we’d arbitrarily want it for $470,000. We always want a deal! But are we just creating our own problems? And should we be shopping for the best price or the best value? There is a big difference between price and value when it comes to mortgages.
To determine whether it is more financially sound to rent or buy economists generally use a rule of thumb: divide the purchase price of a home by the annual rent of a similar property. Anything over a 15, and you should rent because it will cost you less over a period of time. Below 15? Start looking for homes. This takes into account
When is a 2 unit a 2 unit? A 2 unit home, sometimes referred to as a duplex, is a home where there is a rental unit, usually in the basement. Over the years I have seen much confusion surrounding what officially defines a home as a 2 unit. I can tell you that an appraiser, banks and Fannie Mae (all the people that count when you need mortgage financing) will be looking for the following:
Alexandria Virginia was hoping that Verizon would bring its high speed internet and video service called “Fios” to the area, and Verizon chose not to. Now Alexandria Virginia is hoping to be a test site for a new high-speed internet service being developed by Google. And anyone that owns real estate in Alexandria should hope this happens!
What affects real estate prices? Perception. The macro-economy. The city. The neighborhood. The street. The curb appeal. The house. The square footage. The bedroom count. The view. The neighbors. The local economy. The condition of the house. Local zoning issues, if any. Access to transportation. Marketing. Government. Tax breaks. Interest rates. Rents. The weather. The landscaping. The Realtors involved. The sellers. The buyers. Emotion. Local income patterns. Local employment. Competition. Supply. Demand. Chocolate chip cookies…and more?
Does traffic affect real estate in Washington DC, of course it does! We plan our lives around traffic, we look for the best routes to get where we are going, we think about the best times to come and go, we telecommute to beat traffic, we move into the city to beat traffic, and we work late to avoid rush hour. We do anything we can to avoid traffic!
I could tell you how Washington DC had an influx of population in 2009. I could tell you how strong the job market is in Washington DC. Or I could even tell you how real estate prices were up 2.9% in Washington DC last year. Instead I am going to regale you with some anecdotal stories to illustrate what is going on here in the real estate market.