General Rule of Thumb

I have been asked to explain how I determine home values? Well, generally speaking in Southern California, the closer you are to the ocean the pricier it gets. However, there are many areas that are 10 miles inland that have special attributes such as great school systems such as Poway and Scripps Ranch that demand higher home prices. Bottomline is that it depend on your lifestyle and your needs. I like to think that I am an average middle-class individual and based on that the cost per sq ft above is quite reasonable when making a decision to buy a home. Lets take some examples:

Coastal Example:

A typical 2000 sq ft track home in Encinitas should not cost you more than $250 sq ft. That would get you to about $500K, which is still pretty pricey. Today however, the lowest price for a home like this is $700K, nearly $200K overpriced.

Valley Example:

Rancho Bernardo is a nice example. Here a 2000 sq ft home should typically be around $200-250 / sq ft. That would mean you should pay between $400-$500K for a home in Rancho Bernardo. A search on houserebate.com yields homes in the $575K range which is still overpriced by $75-175K.

Inland Example:

Lets look at Ramona. This is an up and comming area with many newer homes being built daily. Typically you don't want to pay more than $150-$200/ sq ft for a 2000 sq ft of living area. That puts us at $300-400K and a search yields homes starting from $375K which is not that bad at all.

I guess the best answer to the question comes down to what you are willing to pay to meet your needs and live comfortably and this should be a good start.