One of the ardent faiths I hold
in my profession is that averages in real estate are not worth much outside the
context of the data analyzed, especially when it comes to single family
residential in the Bay Area. Condos, by nature, are more uniform and thus more
likely to trade at consistent, predictable prices. Areas like Arizona which
have new neighborhoods full of uniform new homes may act similarly. Detached
homes in the Bay Area, however, are far less constricted in terms of its
inherent variation in value based on building quality and location.
Therefore, relying on the statistics
heralded but not backed by a dataset is dicey, at best.
Consider the headline offered
online in the San Francisco Chronicle barking:
“SF Values are now Lower than
this East Bay city”.
https://www.sfchronicle.com/bayarea/article/home-dublin-san-francisco-18462299.php
On the surface this sounds like
something Fox News would happily repost, albeit reworded thus:
“Suburb’s gains Proof of SF’s Imminent
Implosion”
No data is included, so I dug up
what is available on MLS using the months of August and September of this year.
As close as I could get to making the above a reality was to search for
detached homes in this period, eliminating any data points above 8 million
dollars (there were 4 in SF during this period). Once you remove those pesky
outliers and you can shave an extra quarter million off the average sales price
of a single-family home, bringing the average down to 1.970 million in SF. Comparatively,
all detached homes sold in Dublin for under 8 million dollars in the same
period is 1.983 million.
Voila!
Except – if you are removing
outliers in SF, should you also take out the lowest ones? A quick glance
reveals a few properties miscategorized as detached when they are in fact TIC
or HOA dependent. Should we proceed with that correction, we can expect our
averages to move further from par, with the average price of an SF home
creeping higher.
But assuming we let the
comparison stand and say, with a grain of confidence given the dataset at hand,
that the average sale price of a single-family home in Dublin exceeded that of
San Francisco between August and September of 2023. What, if anything, does
this reveal about said house we are purchasing for nearly 2 million?
Removing data points for homes
without listed square footage (15 of 196) the average size home sold in SF was 2032
sqft, with a low of 650 and a high of 6670.
In Dublin, all 37 listings had
square footage information, revealing an average of 2629 sqft, with a low of
1166 and a high of 4415.
The average price per square foot
in SF during this period was $980, with a low of $303 and a high of $2,131.
The average price per square foot
in Dublin during this period was $790, with a low of $545 and a high of $1187.
The average age of a home sold
during the period in San Francisco (when provided) was 1931.
The average age of a home sold
during the period in Dublin was 2000.
Apples and oranges, or harbinger
of the inexorable damnation of the America’s number one liberal freehold?
While the latter sells would
presumably sell more papers, I’m willing to throw my two cents in for the
former.
“Large New Suburban Home Sells at
Same Price as Charming 100-Year-Old Two Bedroom in City Center”
While accurate, the Doomsday punch is lacking.
https://www.realtor.com/realestateandhomes-detail/M1296275069
https://www.realtor.com/realestateandhomes-detail/M2257248813
