My prior post showed median price appearing to have bottomed out with recent gains. Just what we read in the paper and hear on the news. But what happens when we look at three segments of the market individually? Traditional Sale median price is down, Foreclosure median price is down and Short Sale median price is down. How can all three be down, yet when these sales are pooled together, we see an increase in the median?
The answer lies in the mix of sales. If more sales occur in the higher priced segment, and fewer at lower prices, the median for all sales rises. So we have not found the bottom price-wise, but it is good to see Traditional sales gaining ground compared to distressed sales.
The market started to decline at the beginning of 2007, seemed to bottom out late in 2009, then began to increase in 2010. Hindsight shows that this was a stimulus market because things turned south again when the first-time buyer tax credit program ended. Now we are seeing improvement, but interest rates are at an all-time low. We have yet to see what will happen when rates begin to rise. Stay tuned!
During the past 12 years, I have completed over 3,000 residential real estate appraisal assignments. Give me a call if you have questions about residential property appraisal.
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Scott Cullen Certified Residential Appraiser