There is no shortage of news stories about trends in residential real estate, but they are always macro-snapshots of what’s going on with property values nationally, in Florida, or all or part of Palm Beach County. 

The data that most affects homeowner values in our community, however, is what’s going on in the Lakes.  The information below provides a local snapshot that is Lakes-specific.
 

Single Family Home Sales – 2010 vs. 2011 through June 30

In the first six months of 2010, there were nine sales of single family homes – seven were non-distress sales and two were foreclosures.

For the same period in 2011, there were 12 such sales – but this year six were distress sales.

Average $ Per Square Foot Under A/C -- 2010

$144 for 7 non-distress sales
$132 for 2 distress sales (both foreclosures)
$141 overall average for all sales

Average $ Per Square Foot Under A/C – 2011

$129 for 6 non-distress sales
$95 for 6 distress sales (5 foreclosures, 1 short sale)
$112 overall average for all 12 sales

Non-Distress Sale Analysis

The $15 per square foot drop in non-distress sales for 2011 vs. 2010 is only partially due to declining property values.  All seven sales in 2010 were pool homes, four of which were also on lakefront lots.  The six sales in 2011 had only four pools and two lakefront lots. 

Two of the non-distress homes sold in 2010 had been thoroughly updated and sold for an average of $165 per square foot.  Three more were considerably updated and sold for an average of $147 per square foot.  The two that were minimally or not at all updated sold for $121 per square foot.  These numbers clearly show the affect of updating on sale price.

By contrast, only two of the six non-distress homes sold in 2011 were considerably updated and the other four hardly at all.

As pools, lakefront lots and updated interiors are the three factors that most affect the $ per square foot number, a good portion of the $15 per square foot drop in 2011 was probably due to the inherently higher value of these three factors.

Additionally, the number of distress sales jumped to 50% of all sales in 2011 vs. only 22% in 2010.  When the percentage of distress sales gets that high, such sales are more likely to be used as comps by appraisers, buyers and buyer agents, which would also contribute to a lower $ per square foot number for non-distress properties.

It’s hard to quantify each contributing cause of the $15 per square foot drop from 2010 to 2011, but declining property values per se may well account for only about a third of this decline.

Distress Sale Analysis

The two distress sales in 2010 averaged $132 per square foot.  Each had been extensively updated, both had pools, and one is on a lakefront lot.  Both sold quickly.

By contrast, the six distress sales in 2011 averaged only $95 per square foot.  All six were updated only minimally or not at all, only two had a pool, and none were on lakefront lots.  The average sale time was much longer than in 2010. Three of the six ended up selling for an average of $54,000 less than the initial asking price.