Comparison of Methods for Annual Sales Price Adjustment and Resale Value Indexing

Existing Annual Sales Price Adjustment Method:

None

Existing Resale Value Calculation Method:

Lesser of Fair Market Value OR Original Sale Price x (1+Bay Area CPI) + (Adjusted Capital Improvements more than 1% of Original Sale Price) - (Costs to bring unit into compliance with SMC Title 16)

Proposed Annual Sales Price Adjustment Method:

1/3 Bay Area CPI

Proposed Resale Value Calculation Method:

Same formula as existing, but substitute 1/3 Bay Area CPI

 Indexing Options

Year

Bay Area CPI

% Change in Bay Area CPI

1/3 of % Change in Bay Area CPI

Median Income

% Change in Median Income

CIRB*

50% CIRB

1997

165.6

--

--

$70,200

--

7.7%

3.9%

1998

174.4

5.3%

1.8%

$77,200

10.0%

4.4%

2.2%

1999

185.6

6.4%

2.1%

$82,600

7.0%

12.5%

6.3%

2000

197.0

6.1%

2.0%

$87,000

5.3%

16.8%

8.4%

2001

216.5

9.9%

3.3%

$87,300

0.3%

24.6%

12.3%

2002

219.7

1.5%

0.5%

$96,000

10.0%

--

--

*Construction Industry Research Board Index for Santa Clara County represents the percentage change in median price of new homes sold in Santa Clara County.

Median Price Changes of New Homes Sold in Santa Clara County

Year

Median Price per sq. ft.

Annual % Change

1989

$160.22

--

1990

$180.56

12.7%

1991

$162.09

-10.2%

1992

$157.06

3.1%

1993

$159.12

-1.3%

1994

$156.86

-1.4%

1995

$160.27

2.2%

1996

$166.67

4.0%

1997

$179.56

7.7%

1998

$187.41

4.4%

1999

$210.89

12.5%

2000

$246.33

16.8%

2001

$306.90

24.6%

Sources: Construction Industry Research Board and Vernazza Wolfe Associates, Inc.