Spike in Dollars Per Square Foot Number, Why?
I keep a rolling 12-month average of price per foot sale amounts for the general Arcadia area, which includes Arcadia Lite, Lower Arcadia and Biltmore Heights. This month, I noticed a large jump in the price per foot, as seen below...
We have been on a nice, steady and maintainable increase in prices, which is what people should be excited about. The gains in 2005 and 2006 were huge, not healthy and backed by loose lending practices (Watch The Big Short). When I see a jump of over $12 in one month, which is greater than the gains from the last 11 months combined, I get that weird sinking feeling in my belly. I wanted to find out why.
The answer is the mix of sales for the month of October. There were 59 sales in the general Arcadia area, which is typical. The interesting thing is that 25% of the sales were over $1 million and there were 5 sales over $2 million. Of those 5 homes, a few sold for over $400/foot, not so rare, but two sold for per foot prices over $500, the highest at $529. More of more of the new homes sold in Arcadia Proper on large with large square footage are selling for prices over $500 per foot. It will be interesting to see how this average number changes next month.