What is the average cost of a home in your area?

Question

I watch Flip this House and am amazed how much these home cost to start with. Like a 1200sqft home will cost 235,000.00. Where I live you can buy homes like the ones they do for around 25,000 to 40,000. I'm from Southeast Kansas

WOW I think I'll stay right where I'm at...Thanks for sharing.
PS. I bought a 3000sq ft home 20 years old, with 120 acres and paid 90,000.00

Answer 1

I have an 1100 square foot row home in Baltimore, and it was $265K. Much more expensive than back home in Louisiana. My sister just bought a nice house there, much larger than mine, and it has a great pool. It cost $155K.

Answer 2

$500,000 for two bedroom condo, Sunnyvale California, the heart of Silicon Valley (1 hours south of San Francisco).

How to value a property during market downturn?

Housing market continues to slump. Now we can calculate true value of a property easily. As price decline, we don't need to guess and factor in the potential price appreciation while calculating home value. Without the guesswork, figures are more accurate.

Let's use following example:

Today, a typical 15 years old, two bedrooms condo/townhouse is priced around $500,000 and $550,000 in Sunnyvale, California. Rent for similar condo/townhouse is $2000/month.

If you are a home owner, $2,000/month in rent means $20,000 a year in profit ($24,000 per year in rent, minus $4,000 maintenance costs). A $20,000 income is equilevant of owning $400,000 bonds or CDs, because current yield of 30 Years U.S. treasuries are 5% (5% of $400,000 is $20,000). Bank CDs have similiar yields.

In our example, the two bedrooms condo/townhouse is 20% to 25% overpriced. They should be priced at $400,000.

It is interesting to note that if we redo the calculation from buyer's perspective instead of seller's perspective, the figures are even more shocking.

Mortgage payment consists of two parts: mortgage interests and mortgage principal. The interests portion is similar to rent. If you pay interest, it disappears and doesn't add equity to the property. To fully simulate characteristics of renting, we assume buyer will apply for a zero down, interest-only loan.

It turns out that rent of $2000/month is equivelant to mortgage payment of a $340,000 loan at 7.0% APR. And comparing $340,000 loan to $500,000 or $550,000 price tag, from buyer's view, the two bedrooms condo/townhouse is 30% to 35% overpriced.

One may ask, why is there a discrepancy between two perspectives of the buyer and owner?

The discrepancy is a result of 2% differences in interest rate that buyer borrow comparing to yields of bonds and CDs that owners would get. We understand that buyer would always pay more. That is the premium of buying to own. However, looking from home owner's perspective, current housing market is probably 20% to 25% overpriced. We recommand investors to wait for a better entry point.

Answer 3

Flroida Near Orlando. Around 500,000 up to 800,000 Depends on what part. The house i am in is 600,000 I'm away from a lake so the lake would be more.

Answer 4

While flipping isn't illegal, it is risky. You have to know the market, you have to have some idea of the cost of repairs and products. It's quite involved. I'm a realtor and that's way beyond what I'd spend my money on, especially right now.

Answer 5

That same 1200 sq' hse might cost you well over $600,000 in Orange County California.

Answer 6

A little over $700,000, Central California

Answer 7

Where i live in Parma, OH the homes were built in the 1950's and sell for 119,000$ to around 140,000$.

Answer 8

Anywhere from 40K to 225K in Batavia NY. I have a rental I would like them to flip. I'd sell it for 45K

Answer 9

MD - 200k won;t even get you a condo
DC (where I work) minimum for a house is the 1.5 million. condos here are 900k minimum.

Answer 10

$300,000 Orlando, Fl