What price points should I be focusing on as a Buyer in today’s market here in the Morongo Basin?
Here in the Morongo Basin prices are continuing to drop. During this time of price adjustment it would be wise to use this guideline:
$50 to $70 per square foot= great buy! Our market is selling in this range. Many foreclosures are being forced into this range. You might need to fix it up a little. This is the range to not get emotional about the house. Pillage and rape!
$70 to $90 per square foot- good buy! These will most likely be newer homes and in good shape or in good locations. This should be a turnkey purchase with little or no repairs required. This is the current average range in the Yucca Valley market.
$90 to $110 per square foot= OK buy. This should be a medium range investment (5 year). Home should be in near perfect condition and include amenities that you desire or require (like handicap accessible or a pool).
$110 to $125 per square foot= Better love it! This should be a long term investment like a retirement home.
Anything over this, in today’s market, would make for a poor financial decision. Keep in mind that when the market peaked in our area in 2005 we were between $180 and $200 per square foot. The current replacement cost for just the home is around $100 per square foot not including the land.
You can adjust these for the specific area. As an example, I would adjust down $10 per square foot for most of Joshua Tree and the Mesa area. I would go down $20 per square foot for the outlying areas like Landers, Flamingo Heights, North Joshua Tree, and Johnson Valley. Twentynine Palms has seen activity as the new Marine transfers seem to prefer to live in Twentynine Palms instead of over in Yucca Valley. You might expect to add $10 per square foot at this time in that community.
As always I would suggest you contact your lender first and find the obstacles in today’s lending market that you will have to overcome. We use our in house Allied Home Mortgage representative, Debbie Rogers (760.832.1159). Money is available and is cheap but lenders are placing all sorts of strange conditions on the loans.
Today’s market is perfect for Buyers. You can find a lot of house for your money! Armed with this guideline you can narrow your search. Use a Realtor that is active in our market and will focus on you and your needs! We at AFG Realty would be happy to help you in your search!
Bob Armstrong
Broker
AFG Realty
Great information. Thanks for the tip on square footage. There is no doubt that this is a buyers market. You never know what you may get until you ask. I appreciate the information that you shared on this blog. This is the first time I have come across your blog. I enjoyed all of the info and the comments that other readers left. Keep up the good work.
Mr. Ford,
I am not a big fan of manufactured homes. I appreciate the value that they provided for your money and the controlled construction standards at a factory. For me, the biggest problem is I can go to Hemet or Banning and find the same home. This fixes the price. If I can purchase the same home and have it set on my parcel then it is easy to place a value on the existing home.
In your example we can place the value of the land at somewhere between $50k to $75k. The detached steel garage can also be purchased today from many vendors. So with a little homework and a few phone calls, I can find the exact manufactured home with an installation price from the dealer and I can find the exact steel garage with an installation price from that dealer! This will set the value of what I am buying with an apples to apples comparison.
Bob
Hi Bob….
Great information for the unaware home buyer/seller. I do have a question on how to value a potential buy in my sights.
5-ac, Sunkist Road - Joshua Tree - 3/4 mile south of 62. 1500 sq ft 2006 Fleetwood MH perm foundation, occupied end of 2007. 20×30 steel detached garage with a 10 ft ceiling. Municipal water, Septic, Edison, Phone lines in place. Modest view. Little to no landscaping. Lot relatively flat.
Can a “per sq ft” house value, as for a stick-built, be used to evaluate the potential property value? What would you guess that value might be in today’s mid 2009 market?
Thanks
BF
Great comments Bob. These are good tips for any homebuyer or investor looking to invest or purchase in this interesting economy. I may be a tad upside down in my home now since I purchased two years ago (who isnt), but thanks to your guidance, the home is still a great fit and we are still happy in it, and in it for the long haul. Now if we could just get a little more growth in Yucca all would be good.
The information in your site is very good. I am a lawyer and real estate broker in Grand Rapids Michigan. As a Grand Rapids real estate lawyer I always tell people that with the market the way it is, old “rules” are out. Today every thing is posible and you need to ask the seller if you want something. It is definitely a buyer’s market. It is up to the buyer to get the best deal.
Thanks again
Christian G Krupp II, Real Estate Attorney
http://www.krupplaw.com