You have been watching the real estate market for some time now. You’ve seen the dips, read all the news accounts and have finally come to the conclusion that now it’s time to quit paying rent. You are ready to throw your hat in the ring and become a homeowner.

The decision was a long time coming but is finally here. The media reports indicate interest rates one day will have to rise, they cannot stay at these levels forever. It is now time to buy a place to live, a home. Mi casa, su casa.

What to Buy

As a potential homebuyer you have many options to consider including your budget, upkeep and maintenance, the lifestyle and amenities you desire. After this, then decide what meets your needs, either a single family home or a condominium / townhome.

Some buyers also attempt to look into their crystal ball and attempt to make home buying a science. Whereas home buying is usually a very emotional process, some folks attempt to study and rationalize every possible situation including other factors than just the comparable sales in the area. Whatever your approach, the more focused and less general information which you can draw from, the more likely you can make a better decision.

Median Price and Price per Square Foot

In a city as large and diverse as Pasadena median home prices can be very volatile. Although it is typically the main measure used in the media to report monthly home sales too much relevance is given to this measurement. However the price per square foot viewed over time can be a much better indicator as evidenced by both of the charts. Take a look at the graph for the Single Family. Since February ’09 the price per square foot has been fairly consistent, while the median prices have had larger swings and been less predictable. (note: in the graphs, the months run along the bottom of the chart, while price per sq ft is indicated on the right and the median price $000′s is indicated on the left.)

The Condo and Townhome Market

Defining the condo and townhome market in Pasadena has almost taken on a “V” shape with a sharper decline and a more pronounced ascent. However there has been less consistency due to the market experiencing a pause in November of last year. The other factor that has defined this market has been the greater number of new construction units that have been for sale over the last 18 months. Most of which have been designed to appeal to a higher end consumer than the $500,000 price point not seen in the last two years.

Whatever your preference it’s always a good idea if you can see how your prospective purchase has performed in a down market. That’s something we have all become familiar with over the last few years. Whether you view a home purchase as an investment or a place to live, you can table the emotional appeal of your real estate purchase with a look back into what has transpired over the last few years.