Despite High Home Costs in State, It Still Attracts
In the past, I’ve made some bantering remarks from this corner about how relatively inexpensive it is to buy a home outside of California.
But the follow-up suggestion, in jest, to move east, north or south and take advantage of such bargains, had few takers. On the contrary, and even in the wake of a major earthquake, people keep moving here, not there, from abroad and from all sectors of the United States.
To use a most exaggerated example, there is almost a $570,000 difference between a 2,000-square-foot house in Oklahoma City and one in Beverly Hills. A study just released by the Coldwell Banker Residential Group notes that the Oklahoma dwelling sold for $66,833; its local counterpart went for $636,667.
But the average sale price nationwide for the typical 2,000-square-foot home was $160,000, a very attractive price in any Southland market.
Rents for the same typical unit ranged from an average of $500 a month in Charleston, W.Va., to $4,883 in Beverly Hills.
And renewing faith in the shopkeeper’s theory that raising prices can enhance sales, the study shows that on the West and East coasts, the more that homes increased in price last year, the faster they sold.
Called a home price comparison index, the Coldwell Banker report is a national study of similar homes in 168 U.S. and 4 Canadian markets. It draws data from more than 2,000 owned and franchised residential realty offices to indicate sale price, average days on market, estimated monthly rent and annual taxes.
The subject used is a single-family house of about 2,000 square feet with 3 bedrooms, 2 baths, family room or equivalent and a 2-car garage. Changes in value are measured from December to December, and the homes are of an average age, condition, curb appeal and in a location suitable for a typical corporate transferee.
Home prices increased from December of 1986 to December of last year in almost 86% of the market studied, with 28% experiencing double-digit appreciaton.
On each coast, in 19 upscale areas, the average home price was $293,932. Prices in this group increased an average of 12% over the previous year, with an average of 66 days on the market.
Another group, labeled “California Elite Areas,” was made up of five cities with an average home price of $427,600. This group paid the highest annual taxes, averaging $4,896, ranging from $4,058 in San Marino to $5,500 in Los Altos. Rent averaged $2,345 a month.
Then, in a category called “Super Elite Areas,” home prices were pegged at $599,667 in Greenwich, Conn., and $636,667 in Beverly Hills. These dwellings appreciated 3.8% on an average and sold in l43 days on an average. In the monthly rental category, the highest was $4,883 in Beverly Hills.
Joe Hanauer, chairman and president of Coldwell Banker Residential Group, said current mortgage rates and “the varied selection of mortgages available” enabled more people to become homeowners.
“Confidence in real estate as a sound investment continues to fuel an energetic home-buying market in economically active areas,” he said.
But don’t forget those bargain-priced areas of Oklahoma City, Charleston, Fairbanks, Alaska; Boise, Ida., St. Louis. . . .
