A recent lunch with a banker friend got me curious about current prices per square foot in specific local subdivisions. Apparently a builder had recently told my friend that he couldn't build a house (including land acquisition costs) for as little as the current price per square foot on existing homes. If you're a builder, that's trouble!

So, I'm going to do a series of posts, not necessarily sequential, looking at several subdivisions in a local area and what the average sale price per square foot looks like.

First I should define a few things. I'm looking at specific subdivisions because they are more uniform. It's easier to make comparisons without having to factor out the amount of land. They are usually built at about the same time. All in all, they are more likely to result in more accurate comparisons.

The sale price that I'm using is the sold price as taken from the Multiple Listing Service (MLS) minus any money paid by the seller to help with closing costs. So, it's a net sales price.

The square footage information is taken from the tax records. That means that occasionally the square footage is going to be inaccurate if, say, a homeowner finished the basement without getting the proper permits.

All that said, let's take a look at three subdivisions in the Amissville and Jeffersonton area.

South Wales had the largest volume of sales of the subdivisions I looked at with five sales since 1/1/2008. The average price per square foot of the homes sold is $118.89.

Quail Ridge had four homes sold. The average price per square foot there is $110.50.

Wildwood Forest showed only two homes. That makes the data more suspect here as the two homes had enough differences that I don't view this number as very useful. But, for what it's worth, the price per square foot, on average, was $125.91.

I wanted to look at two additional subdivisions in this area, Deerfield and Erinbrook, but there weren't even two sales in either of these (at least per the MLS).

If you live in the Amissville or Jeffersonton area and have a home for sale, you might consider taking a look at how your home compares with these numbers. Is it time for a price reduction?

If your a buyer, keep these numbers in mind as you look for the house you want, then compare the listing price to these numbers.

It's been a little while since we've peeked in on the South Wales community and so I thought we'd take a look at what's happening there. Big picture numbers are interesting, but really, even at a county level they can be pretty meaningless.

When I originally pulled up the active listings for South Wales I got a pleasant surprise. The inventory volume is the lowest it's been in well over a year. There are currently 13 homes for sale.

The number of active listings here has been hovering around 18-20 pretty consistently for the past year. So 13 is definitely good news.

The next question is, what happened to the other listings?

Well, I'd like to tell you the reduction in inventory is due to all the sales happening in South Wales. But that is clearly not the case. In the last three and a half months only four homes have sold.

Interestingly, given the discussion on pricing in yesterday's blog, one sold for a net (after giving closing costs to buyers) of $365,000. Consider that the lowest sale price in there during the last quarter of 2005 was $530,000. That's a price drop of 31%! By any measure, that's substantial!

Six homes have been withdrawn from the market in the last few months and not relisted. If you add those six back in the total actives go right back to 19, about where they've stood all year.

So the real question is, have those sellers truly given up? Will they be back on the market in 2008?

The really good news for South Wales is that none of the current listings appear to be bank-owned or short sales.

There's always a silver lining!

It's time to take a close up look at the South Wales subdivision in Jeffersonton in northwest Culpeper County.

There are currently 18 homes for sale here. The low price is $450,000 and the highest priced is $599,900. The days on market ranges from just under two weeks to well over two years.

During the last year 10 properties sold. That means that at current sales rates there is enough inventory to last almost two years. If you put your home on the market today and everything currently on the market had to sell before yours did you could plan on selling yours in early spring of 2009!

The lowest price anything sold for in the last year in this subdivision was $375,000. The highest price anything sold for was $635,000. On average the sales price, including incentives was 97% of the final list price.  The fastest anything sold was in 9 days. The longest anything was on the market (and sold) was 277 days.

Twelve homes over the course of the past year have either been withdrawn from the market or the listing has expired. None of those homes have yet been sold. That means in addition to the 18 currently on the market there are 12 more owners who want to sell.

One more factor that doesn't show up in any statistics is the talk about Dominion's proposed new power lines. Since they would follow the current right of way through South Wales there is some uncertainty about what will happen regarding this proposal and what the ultimate effect will be on the homes here. Uncertainty in an already slow market has a tendency to make buyers move on. While we can't measure this effect, it could be impacting home sales here to some extent.

What should you expect if you live in South Wales? You should expect price reductions! If everyone who wanted to sell had their house currently on the market there would be three years worth of inventory.  While spring and summer is typically peak buying season, there are nowhere near enough buyers out there to absorb this kind of inventory.

Again, if you don't have to sell, your home should not be on the market in these conditions. If you do have to sell, you will need to make sure your home is in great condition and will have to price it aggressively.