The Combs Team Presents: Danville Area Condos increase in Value 30% Per Year Since 2011
There has been so much exciting news in our Real Estate Market that I have completely overlooked our Condo and Townhome Market for quite some time. In fact the last time I reviewed this market segment was 2011, so it is definitely time to take a look.
For the purpose of this review we take a look at the combined Alamo, Blackhawk, Diablo and Danville, Condo and Townhome market, in what is essentially the Danville Area. Our Condo Market peaked out in 2006 and declined both in price and dollars per square foot until it bottomed in 2011. From that point on the Condo Market rallied and roared.
From the bottom to 2017, the price of an average condo has advanced from $394,580 to a stratospheric $719,269. That is an amazing increase of 182% in the short span of 6 years. That works out to be about 30% per year and is an incredible advance in price. Dollars paid per square foot actually advanced a little faster moving from $256 per square foot in 2011 to $478 per square foot in 2017 for an increase of 187%. If you are like me, you are wishing you had bought a couple.
In these data we see something unseen before. The price per square foot paid for a Condo or Townhome in our area is now on par with the amount being paid for a single family home. Historically Condos run well behind a single family home in price. Is this because retirees are finding Condos a better alternative to moving out of the area or is the demand for our high quality schools pushing up the values because the cost of single family homes is so terribly high? It is a really good question.
Something else comes to mind as well. If you look at the difference between the 2016 sales volume and 2017 you see a reduction in the number of sales, but the days on market have dropped significantly from 22 to16 meaning that Condos today are selling 28% faster than last year. That indicates that the Condo Market is impacted by low inventory just like the single family market. This is further reinforced by the fact that the Condos sold today are on average selling for $5,000 more than list price compared to last year, when Condos sold for $2,000 less than their list price. That is a significant directional change.
Your eye may be drawn to the apparent price decline from 2016 to 2017 displayed on the chart. With a mere 132 condos in the sample a variation of between 2 and 5% on average prices year over year would be nothing to be concerned about considering these yearly average prices are comprised of unit prices ranging from $540,000 to $1,120,000. Median price isn’t terribly helpful with our small sample, pretty much mimicking average price.
I would be more inclined to view days on market as the indicator of market direction for the Danville Area Condo Market rather than year over year sales price change so small. Also, the Condo market is averaging 14.6 sales per month. There is only one month of inventory on hand. If there were suddenly 6 months of inventory on hand, it would be a different story. That said, I think it’s safe to say that 30% per year appreciation is unlikely to persist into the future.
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Joe and Nancy Combs, The Combs Team, have a high degree of focus on Danville Real Estate Market and Alamo Real Estate Market and sell Real Estate throughout the East Bay. As always, if you have any questions about the Alamo and Danville California real estate markets, or finding that perfect home for sale in the East Bay, please let The Combs Team know! Call Joe Combs 925-989-6086 or Nancy Combs 925-351-6999.
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Data presented in this column is based in whole or in part on data supplied by the Contra Costa and Alameda MLS service and other quoted sources.
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