Land Value is Important
Same House, Different Site Values
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Site values can vary tremendously. Site values are, by far, the most important portion of the cost of a home.
Here are portions of a report that originally appeared at CBS.Marketwatch.com. |
by Steve Kerch
Suppose a middle manager is transferred from one region to another and buys the same house.
The typical home that a transferred middle manager might buy varies in cost by more than $1.1 million depending on its neighborhood -- of the country.
The most expensive market for relocating managers is Palo Alto, Calif., with an average price of $1.26 million. The least expensive is Yankton, S.D., at just $101,062.
On average, a typical transferee home costs $291,097, up 8 percent from 2001, according to the Coldwell Banker Real Estate Corp.'s annual Home Price Comparison Index.
The index compares matched sold listings in typical, mid-management transferee neighborhoods in 317 markets across the U.S. and Canada.
Of the markets studied, 206 saw home-prices rise from 2001 and 114 posted double-digit gains.
"Residential real estate has been one of the only bright spots in the U.S. economy," Coldwell Banker Chief Executive Alex Perriello said. "The sector should stay fundamentally strong because of attractive mortgage rates and the increase of home ownership rates among key demographics such as single-parent families, the baby-boom and echo-boom generations, minorities and immigrants."
Following Palo Alto, the most expensive markets were Beverly Hills, Calif., at $1.05 million; La Jolla, Calif., $920,500; San Francisco, $891,000; Newport Beach, Calif., $858,750; Westport, Conn., $843,000; San Mateo, Calif., $821,800; Manhattan Beach, Calif., $813,125; Wellesley, Mass., $795,000; and New Canaan, Conn., $793,750.
The most affordable markets behind Yankton were Minot, N.D., with an average price of $114,000; Oklahoma City, $114,875; Billings, Mont., $124,433; Topeka/Shawnee County, Kansas, $124,475; Chattanooga, Tenn., $124,975; Parkersburg, W.V., $127,166; Fayetteville, N.C., $129,625; Pensacola, Fla., $130,875; and Omaha, $131,975.
Among other highlights of the study:
- American markets closest to the national average sales prices are Conshohocken/Montgomery County, Penn., at $291,250, and Naperville, Ill., at $289,937.
- Idaho has the least price variance among intrastate cities, with just $3,200 separating the most expensive, Boise at $173,500, and the most affordable, Coeur d'Alene at $170,300.
- California has the greatest variance, $1,049,125, between Palo Alto $1,263,250 and Fresno $214,125.
Consumers can use the automated indexing formula to calculate what their own home could be worth in another market by clicking here, then clicking on the Resource Center. [The Progress Report says -- try this! It is fun to see where the site values are highest and lowest.]
Funny how the Proposition 13 state, California, is by far the worst when it comes to housing affordability. Could there be a connection? If residential land was no longer attractive to speculators, what effect would that have on housing prices? Tell your views to The Progress Report:
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