A few comments and questions from readers of my previous 2012 lakefront market update post had me running numbers in a few ways I had never considered. Some of these inquiries didn't leave me with decisive conclusions, but I thought I would share them nonetheless.
One reader saw that the median price per square foot measures had risen slightly on a year to year comparison, but asked if there was any trend as far as if the price per square foot of lakefront homes increased throughout the 2012 year. The reader made the point that perhaps the lakefronts that sold earlier in the year sold at a higher price per square foot than later in the year. This would suggest that although the price per square foot went up overall compared to the previous year, that in reality, the price per square foot may have started high and then tapered off as the year went on. Great point! Someone paid attention in statistics class.
Since each lakefront is so unique, I knew that there would be significant ups and downs in price per square foot across the year. But by using the trendline feature in the spreadsheet program we might find a direction. Here is the graph I came up with:
As you can see, I ordered the sales chronologically from left to right from the first lakefront sale of the year to the last and noted their price per square foot. You can see from the black trendline that price per square foot of lakefront homes did in fact rise throughout the 2012 year. This is more eveidence that the Big Bear lakefront real estate market is heading in the right direction.
Next, a reader asked about the relationship between size of a lakefront home and price per square foot. The conventional wisdom is that if two homes are for all intents and purposes the same, but one is larger than the other, that the larger the home gets, the less the price per square foot will be. This belief is widely held and been proven throughout our real estate industry, but why not take a look at this concept in regards to 2012 lakefront sales.
So I ordered the sales from the smallest home to the largest home by price per square foot and then again used a trendline to see if the price per square foot would decrease as the sold lakefronts got larger in overall size. Surprisingly, they did not. The values stayed relatively the same regardless of the size of the home. The reason I believe that lakefronts bucked the trend of decreasing values with increasing size is that in looking at some of the specific sales of the larger properties, some of the larger homes that sold this year were newer, in pristine condition, and had very high-end amenities. It would then stand to reason that these higher end homes which were newer and nicer would retain an equivalent price per square foot to smaller homes that were older and dated.
Thanks for the questions, readers! The more you ask, the more we all learn about the intricacies of the Big Bear real estate market. If anyone has any additional comments, feel free to use the comments link below.