Last time, I ended the column with a teaser question: Can we apply the same scientific methods to determine the degree to which price variation in Wilton Manors and nearby neighborhoods is due to the locations themselves?
In other words: Can we look at directly competitive neighborhoods from a price perspective and estimate the “cost of entry?” That is, holding everything else constant, assessing the exact same house with the exact same characteristics (e.g., square footage of house and lot, number of baths, presence of a pool or garage, water frontage), how much more are people paying to live in different neighborhoods?
I broke my analysis into two parts.
First I included the two sections of Wilton (West and North Central, and then East and South Central), compared with the most directly competitive areas with respect to price (meaning, Poinsettia Heights, Oakland Park Corals, Coral Ridge Isles/Knoll Ridge, and Imperial Point).
And then, because so many buyers encounter “sticker shock” with respect to these neighborhoods, I included more “value conscious” neighborhoods (i.e., Middle River Terrace/Lake Ridge, South Middle River, North Andrews Gardens (separated into the areas north and south of Commercial), and Twin Lakes/Royal Palms).
First let’s consider Wilton and its competitors. My analysis found that, holding everything else constant, West/North Central Wilton, Oakland Park Corals, and Coral Ridge Isles/Knoll Ridge had pretty much the same base price of entry. For Imperial Point, add roughly $20,000 to that base. For Poinsettia Heights, you would pay about $100,000 more, and East/South Central Wilton tops it off at a roughly $125,000 premium to the base.
I say again, because it’s important: this would be a total apples to apples comparison of the exact same house, with the exact same characteristics.
Now let’s look to the more value-priced segments. Starting with a base of the Twin Lakes/Royal Palms neighborhood,The north section of North Andrews Gardens has a $10,000 premium.
South Middle River is about $10,000 over that.
The South side of North Andrews Gardens has a roughly $10,000 premium over South Middle River’s value. And, finally, Middle River Terrace/Lake Ridge comes in another $30,000 higher – and thus about $60,000 over Twin Lakes/Royal Palms.
A significant and oft-overlooked driver of the disparity in value is the age of the housing stock. People pay more for relatively-newer homes in these neighborhoods. Generally speaking, the development in this part of East Broward spread south to north, and east to west. Poinsettia Heights, Lake Ridge, Middle River Terrace and South Middle River came first, up through the mid-1950s. Wilton was next, with most homes originally built throughout the decade of the 1950s. Oakland Park Corals, Coral Ridge Isles, Knoll Ridge, and North Andrews Gardens were built up from the mid-50s through the mid-60s. Then Imperial Point came on line though the 1960s and into the early 70s. Finally, Twin Lakes/Royal Palms was built largely in the 70s.
Thus wraps up my look at scientific pricing. Where shall I turn my geekish glaze next?
James Oaksun, Florida's Real Estate Geek(SM), is Broker-Owner of New Realty Concepts in Fort Lauderdale. In addition to having degrees from Dartmouth and Cornell, he is a Graduate of the Realtor Institute (GRI).