Although we typically talk a lot about commercial real estate on this blog, I would be remiss if we didn't occasionally talk about the single family home market in our region. The reason why it is important is because, single family home sales can help us check the pulse on economics and consumer sentiment that drives other facets of the real estate market in our area. For instance, when home prices go up, home owners feel wealthier. Their home equity goes up and they tap that home equity to fund home improvement projects, or to send their kid to college, or go on a big vacation, etc. Increasing home values also give lift to the economics of new home construction, which has a whole myriad of different economic affects for a given area. On the other side of the coin, rising home prices can also place homeownership or upgrading to a larger house out of reach for many people as well. Below is a recent report of home price performance that has been sorted by each school district in Monroe county. The findings were interesting to say the least and also provided some confirmation of things that I have seen first hand as a REALTOR and heard second hand, anecdotally from my real estate colleagues.
The above chart is sorted by order of percentage change in the MEDIAN home sale price. "New - GR" means new construction greater Rochester. "Existing - GR" means existing construction greater Rochester. I decided to also provide analysis of the price per square foot pricing trends as well. The time line of this analysis was a snapshot of September 2021 and September 2022. All of the data from this chart was sourced from InfoSparks, a data aggregation service which scraped their data from the Greater Rochester Association Of Realtors Multiple Listing Service.
One peculiarity that I noticed across the board was the fact that the median price per square foot rose appreciably more than the median sale price in most areas. The most plausible explanation for that is that there was a greater sales volume for homes that are on the smaller side of the home size range. In effect, there was more volume of smaller home sales in September 2022 than in September 2021. Are more home buyers competing for smaller homes? Or is this just some coincidence? If buyers are more desirous of smaller houses, why?
If I can draw from my own recent experience, I have noticed that buyers have needed to settle for buying less house due to a couple of factors:
Where do we go from here...
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