Did you know ... 82.5% of all statistics are made up on the spot?
Don't worry about remembering the number, because there is 93.2% chance I will change it next time.
In our industry, numbers and statistics help us understand our market, project sales and make educated predictions about the future. However, like the glass that is half full or half empty, the same number can easily mean different things to different people.
One of the most quoted real estate statistics is the median price of homes. Most cite median price to show market increases or decreases. In fact, median prices have very little to do with prices, and more to do with the concentration of demand. The median is simply the middle point of demand - half the houses sold for less than the median price and half of the houses sold for more than the median price.
In today's Orange County market, demand is concentrated in the sub-$500,000 and even more in the sub-$300,000 price range. In fact, it's a hot SELLER's market in these ranges. For homes priced over $700,000 - the story is dramatically different with demand at a virtual standstill. The higher the price, the lower the demand.
As such, the median price of homes in Orange County is continuing to fall, reflecting the higher concentration of demand in the lower price ranges. The key is to STOP there. Do not further assume that prices are declining.
To determine if prices are declining, level or increasing, you must narrow your focus to 1) a specific price range, 2) a specific city or neighborhood and 3) a specific time frame. The more general the statistic, the more skewed the interpretation.
Whenever someone asks about the Orange County market, the first question we ask is the price range and area they are referring to, because unlike most markets, our current market is divided and there are no universal truths or predictions that would be accurate for the entire Orange County real estate market in general.
Nancy Moeller, CPA, Real Estate Broker
Seven Gables Real Estate
Direct (714) 276-7006
Nancy@TheOCExperts.com
www.TheOCExperts.com for Orange County Real Estate
www.OCBankDeals.com for Orange County Foreclosures
www.ZeroShort.com for options available to avoid foreclosure
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