The average price-per-square-foot gave a mixed performance in 2016, continuing to rise in most communities, like Riverside and San Francisco, but falling off in others, namely Oakland and Marin County. Expect home prices to increase only marginally in most communities this year as the housing market adjusts to higher mortgage rates, likely to begin hindering homebuyer purchasing power and dragging prices down by the end of 2017.

Check out the price-per-square-foot history of home sales in these eight California communities.

Posted updated April 6, 2017. Original copy posted January, 2012.

San Francisco

san-francisco-price-sq-ft-2012-2017

Chart update 04/06/17

san-francisco-price-sq-ft-1988-2017

Chart update 04/06/17

Marin County

marin-county-price-sq-ft-2012-2017

Chart update 04/06/17

marin-county-price-sq-ft-1988-2017

Chart update 04/06/17

Riverside

riverside-price-sq-ft-2012-2017

Chart update 04/06/17

riverside-price-sq-ft-1988-2017

Chart update 04/06/17

Los Angeles

los-angeles-2012-2017

Chart update 04/06/17

los-angeles-1988-2017

Chart update 04/06/17

Oakland

oakland-price-sq-ft-2012-2017

Chart update 04/06/17

oakland-price-sq-ft-1988-2017

Chart update0 4/06/17

Santa Ana

santa-ana-price-sq-ft-2012-2017

Chart update 04/06/17

santa-ana-price-sq-ft-1988-2017

Chart update 04/06/17

La Jolla

la-jolla-price-sq-ft-2012-2017

Chart update 04/06/17

la-jolla-price-sq-ft-1988-2017

Chart update 04/06/17

Corona del Mar

corona-del-mar-price-sq-ft-2012-2017

Chart update 04/06/17

corona-del-mar-price-sq-ft-1988-2017

Chart update 04/06/17

Data courtesy of Redfin

These charts are updated annually

Local pricing trends: the long and short of it

Two profiles have been charted for each community:

  • a long-term profile from 1988-2017; and
  • a short-term profile from 2012-2017.

Long-term profiles indicate the market hit its bottom in 2012. Consider 1999 and 2000 as years when prices were at historical mean price levels. Adding roughly 2% of consumer price index (CPI) inflation per year, we can see the pricing in the present market was vastly inflated in 2013-2014.

Related article:

The mean price trendline: the home price anchor

Short-term profiles show that home prices are experiencing downward pressure as we start 2016. This is partially due to a depressed home sales volume in California, which, while up slightly over the previous year, lags behind what is needed to sustain the prices increases experienced in the interim. Further, with the headwind of rising mortgage rates, expect prices to fall in late-2017, to bounce back in 2018 once home sales volume picks up with fuel from the recovering jobs market.

Price per square foot analysis

The average price per square foot in each of these areas during 2016 was:

  • $1,024 in Corona del Mar, down 3% from $1,052 in 2015;
  • $987 in San Francisco, up 6% from $929 in 2015;
  • $758 in Marin County, down 1% from $768 in 2015;
  • $581 in Oakland, down 7% from $623 in 2015;
  • $747 in La Jolla, up 10% from $677 in 2015;
  • $626 in Los Angeles, up 8% from $581 in 2015;
  • $334 in Santa Ana, up 6% from $315 in 2015; and
  • $215 in Riverside, up 8% from $199 in 2015.

The bottom price areas largely consist of home sales of low-tier properties (a favorite of speculators). More low-tier property sales have the effect of dragging down the average price per square foot.

Related article:

California tiered home pricing

Of course, using average pricing has its drawbacks. Similar to using the median price, average prices give the appearance of an inaccurate collective increase as prices in a neighborhood become less volatile. In reality, neither the average price nor the median price gives an accurate representation of market direction. In fact, while most of these areas showed an increase in the average price per square foot in 2016, prices in most parts of the state began to weaken by the end of the year.

Thus, when analyzing a particular property, these charts offer no advice beyond demonstrating localized trends. When pricing a home’s value, agents and homeowners must consider:

  • the property’s fair market value (FMV) based on nearby comparable property sales; and
  • local end user demand, based on:
    • the local job market; and
    • local demographics.

Related articles:

Jobs move real estate

first tuesday Market Charts: Demographics of Ownership