By the end of 2008, people were paying the same price per square foot for SFRs in MB as did buyers in late 2005.
That's one finding from a new analysis of PPSF data from the MLS.
In this case, MBC wishes to thank Kaye Thomas (again!) for posting historical PPSF data for sold properties on her blog
, and a reader who volunteered to input the data to make this chart possible.(Click the graph to enlarge.)
Monthly median PPSF data begin in Jan. 2000, and a 12-month moving average begins in Dec. 2000. (Nerdy note:
We ran both 6-month and 12-month averages, but found the 6-month average to be too noisy in the 2006-07 period.)
The storied rapid, upward trend in home prices in this decade is again plainly visible in this graph. The averaged-out median PPSF doubled in 5 years
, from $400 in June 2001 to $806 in June 2006. (To compare this to median home prices for the same period, see "How're Median Prices Doing?
The already-convincing trend toward higher prices got a shot of nitro after hitting $700 in October 2005, rocketing up 22% more
in the next 13 months to a peak of $856 in Nov. 2006.
It has been all downhill since then.
The median PPSF dropped below $800 by the end of 2007 and looks likely to drop below $700 early this year.
The price increases we see here are, no doubt, largely a reflection of the home price bubble that affected all of America during this period.
There is, also, an effect from new construction, which was rampant in MB in this decade. Smaller, older homes were replaced by big, new homes. But the effect on average PPSF can be the reverse of what's expected – small homes sold for lot value will actually have high PPSFs.
To take just one recent example, 3009 Poinsettia
was recently sold and scraped. The 2br/1ba, 925 sq. ft. home sold for $1.190m
, a PPSF of nearly $1,300
Countering that kind of upward-pushing effect from lot sales is the fact that many lots are sold off the MLS and prices are never reported in that database.
You have to imagine that these two effects have more or less offset each other at about the same rate from year to year. However, these days, as spec construction is a sport in steep decline, if more lots go up on public offer, you could actually expect PPSFs to increase a bit in response.What about the fact that more and more new construction means bigger average homes in MB?
At the suggestion of our reader/volunteer, we ran another analysis. This one takes median home prices and divides them by the median price per square foot. (In this case, we used the 6-month moving averages.)
The result is an inferred
median square footage for homes sold in MB during this period.
As you'll see (click graph to enlarge),
the median square footage of homes sold in our town has stuck pretty consistently within the range of 2000-2500 square feet
. There is no clear trend in either direction.
We guessed that this graph would suggest that a home at or near the median size for a given month would also sell at or near the median price for that month. However, trying a couple of specific examples, that hypothesis did not seem to hold true. So we're curious what else MBC readers might make of this information.
Looking ahead a bit, MBC is preparing to publish year-end sales figures for MB. We might look at median PPSF by region in that analysis. However, be warned, sales were so anemic in 2008 – a new historic low – that we may not have big enough sample sizes to draw from.