News Article From: 09-12-2007
2nd Issue of September 2007
Resale Sales Pricing Analysis
The Median Price in the recently-released July ARMLS resale sales reports is $250,000, a drop of $5,000 from the June reports. The Average Price also dropped slightly, from $349,300 to $343,000. The graph below displays both the monthly Average Price and Median Price of resale homes sold in MLS from January 2002 through July 2007.
The average price is calculated by dividing the sum of the sales prices by the number of homes sold. The median price is determined by finding the price where the quantity of homes sold for less than that price is equal to the quantity of homes sold for more than that price. The median is a better indicator of the overall market. Note the similar pattern of both measures.
Our current real estate market is being driven almost exclusively by the very large increase in supply, while twenty three months ago demand was the primary driver. Moderating appreciation has softened demand somewhat; but the inventory surplus is the real key. We will likely see a sixth condition of price fall-off in the very near future (I actually think we may have entered it already). In the meantime, the fifth market condition, “E”, of stable or slightly falling prices, continues.
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