In our previous two Carmel updates we discussed the improving markets in the high demand areas. We also took a close look at internal market statistics and the clues and nuances apparent from the pattern of seller price reductions.

There are other meaningful patterns discernable in the area of a $ per square foot analysis. Different perspectives are useful to Buyers and Sellers in recognition that is not easy to value Carmel residences. New homes sit adjacent to small older cabins and just a one or two block  difference in proximity to the Carmel beach or the Village can have a profound affect on value perception by the marketplace.

A $ per square foot analysis is at best painting with a broad brush, very general in nature and not particularly useful in comparing dissimilar homes in varying locations. However, in looking closely at the closed sales from Jan 1 to April 30 we find two subtle patterns that can be isolated and used to inform our thinking on relative values.

A first pattern is apparent when we see that there were 4 sales in the Jan – April time frame each  with approximately 2100 square feet. Carmel Sold 2100 Sq Ft  These homes were all located in the high demand area  South of Ocean Avenue and on Carmel Point. By dividing the closed sales price by the sq ft we have  $1,785/sq ft  for a newly remodeled residence with ocean views on San Antonio; $1,630/ sq ft for a brand new home without ocean views on Monte Verde  near 11th; $1,404/ sq ft for an older but somewhat updated residence on Bayview with ocean views, Carmel Point and $1,166/ sq ft for an older updated home without ocean views on Carmelo near 10th.

These relative values are useful  in  making comparisons with other homes in different locations. We would expect the higher figure to be the newer remodeled home closest to Carmel beach. A cautionary note….use these numbers as guidelines and a rough test of whether a listing may be reasonably priced.

A second pattern results from Carmel’s building requirements concerning lot coverage. When Carmel was developed around 1910, the lots were laid out on a grid with the basic size being 40 x 100, or 4000 sq ft. For several decades Carmel building standards have limited lot coverage sq ft  to 40% of the lot size. This results in many homes with 1600 sq ft ( 40% of 4000 sq ft) .  These are easy to compare using the $ per sq ft approach. Again we caution, this is only one of many tools to use as a guide for valuation.

In the first 4 months of 2011 we have 8 sold  properties that meet the 4000 sq ft lot size  and 1600 sq ft of living space. Carmel Sold 1600 sq ft We limited the selection to homes that were newer, not to exceed 10-11 years,  or recently remodeled. Within these 8 homes we find two distinct value ranges. The first three homes are located on Lincoln, Dolores and Casanova in the high demand areas South of Ocean Avenue, and the $ per sq ft is remarkably consistent, $1,361, $1,321, and $1,371 respectively. However, when we look at the 5 sales in the surrounding areas of Carmel, the pattern is again relatively consistent, but dramatically lower. In these outer areas the $ per sq ft range is from  $865 to $718.

Final thoughts….Buyers and sellers can use this $ per sq ft tool to help determine values and a whether a home’s offering price appears to be within a reasonable range. This is a very subjective process but the more quality data that can be developed the better the resulting decisions.