The three parts of Wilton Manors
Indeed, just as Caesar wrote of Gaul, Wilton Manors can be divided into three parts.
The “traditional” three part division, as I discussed in my previous article, comes from the city of Wilton Manors itself, organized by the city’s three neighborhood associations.
But let's talk pricing and value. What can we tease out of the single family home sales data that would suggest what people are willing to pay to live in certain areas of Wilton Manors, and under what circumstances?
Divining the answer to that question requires quite a bit of Geekery. We can construct a database of arm's length sales from the Multiple Listing Service data that includes the statistical variables typically used in describing homes. These would be things like the number of bedrooms/baths, the age and square footage of the home, the size of the lot, whether there is a pool, and whether it is a waterfront home.
Then we use a technique called multivariate regression to determine what weights to give each factor (assuming the factor is statistically significant). We can see from the numbers, which attributes matter most to buyers, and how much each of them count.
From a valuation perspective Wilton Manors can be divided into three parts, just not the three official ones:
On a normalized basis (no difference in features or size), the northern half of West Wilton Manors (west of Andrews) can be considered the baseline. The southern half of West Wilton Manors and the northern part of East Wilton Manors are valued the same as the central area, and that whole area commands a 25-percent premium to the far northwestern segment. The southeast corner (east of the train tracks and south of 26th Street) commands a 50-percent premium versus the far northwest.
Again, this is before we consider water frontage, a pool, or house size.
Wilton Manors is a high demand area. It is recognized as an LGBT Mecca, and probably only West Hollywood and Provincetown come close on a percentage of population that is LGBT. Thus there is a “price of entry” for the city as a whole, in excess of most other parts of Broward County.
Next, location within Wilton Manors is a consideration for buyers. People are definitely willing to pay handsomely to live in the southeast corner, and relatively less in the northwest corner. Is this rational, or does this suggest under-valuation in the northwest and over-valuation in the southeast?
Additionally, homes with river or canal frontage, and homes with pools, carry large premiums – larger than most people realize.
Only after all these factors are considered does square footage enter the equation, or in other words:
Size does indeed matter in Wilton Manors. Just not as much as you would expect.
So, how do the asking prices of homes currently on the market in Wilton Manors compare with the multivariate estimates?
Roughly half the homes are fairly priced, even perhaps a bit underpriced. These represent good values in the market at this time. However, roughly half the homes are overpriced at current levels, and in my opinion are unlikely to sell near the current ask price.
Clearly there are owners who have been under water for a long time testing the waters, perhaps telling their Realtor that if they could get a certain price they would sell. People remember 2005-2006, when their homes would have sold for more than they would today. And sometimes that is a hard thing to accept.
But as I said in my last article: At the right price, homes sell quickly. At the wrong price… results may be variable, to be polite.