The more you know…
From our beginning, Capstone has been a research based firm. The real estate industry deals with large financial transactions on a daily basis and research is key to making these transactions successful for all the parties involved! When you are shopping for shoes there is no problem with picking a pair based on your favorite color or style. I don’t recommend this strategy when looking for a half-a-million-dollar-plus house or investment property. For that matter, I don’t recommend it when looking for a $50,000 property. Our investor clients naturally warm to our research-based approach, but this is something our owner occupant buyers and sellers benefit from as well.
The real estate market is ever-changing. We have clients that like to keep up on the statistics by watching online reports and articles. While I think this is beneficial in certain regards, these are normally based on national statistics and have little to do with any specific market. The national statistics are based on averages; they don’t apply to any one area and they can be very misleading for consumers. You wouldn’t rely on a national average temperature to determine how cold it was outside, correct? Let’s be real here; if you live in Carlsbad, you wouldn’t rely on a temperature report for Escondido! Referring to national average sales prices or trends does not give you the appropriate data to base your personal real estate decisions on.
For example, the National Association of Realtors reported a 12.2% increase in sales, year-over-over, in September 2011. They reported a 3.90% decline in median home value over that same period (comparing September 2010 to September 2011). When comparing September 2010 to September 2011, San Diego County reported an 8.10% increase in sales (lower than the national average) and a 7.69% decrease in median home value (almost double the national average). When we look into things further, we can see that while San Diego County had an average 7.69% decline in median sales price, there is a LARGE range in how the individual cities and zip codes performed over that period. For instance, in Carlsbad, the 92010 zip code saw a 9.25% decline (well above the national and county averages) while the 92011 zip code saw a 2.7% decline (less than national and county averages). Over this same period, the 92054 zip code of Oceanside saw a 4.9% increase in median sales price (yes, that’s correct… an increase). Cardiff and Solana Beach also showed positive increases in median sales price over this period. These are just a few, random examples to give you an idea of the range in statistics based on cities and zip codes. When looking to buy or sell a property, it’s important to take the VERY local market into account!
We believe that tracking and analyzing the local market is vital to success in our industry. The first step to successful negotiations is understanding the true value of the item in question. As a buyer or a seller, knowing the true value of a property comes down to understanding it’s marketability, the competition, the recent comparable sales, the other party’s situation, the trends in the property’s specific market and being aware of anticipated changes in that market. I’m a big fan of the phrase, “Knowledge is power” and we’ve made that the cornerstone of our business.
If you are interested in getting monthly updates on the real estate statistics in your area, let me know. If you have a particular neighborhood or property you would like evaluated, we can do that too!
