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When Is a 20% Drop in Average Prices Really a 0% Drop in Average Prices?
Market stats can be deceiving.  
Every month the MLS in Atlanta comes out with average home sales prices for the Atlanta metro area.  They are useful in general terms but let me show you how easy it is to get an entirely incorrect picture of what's going on in the Atlanta market.
Fulton county is in the middle of metro Atlanta and is a very long county.  It could take you one hour to drive from the south side to the north side.  Houses in the north part of the county might cost on average $500,000 while houses in the south part of the county might cost on average $200,000.
Here's a hypothetical situation with simple numbers to make the math easier.
10 sales at $500,00010 sales at $200,000= ave. price of $350,000
Next year the prices stay the same, total number of transactions stay the same, but the relative number of transactions changes in the two areas.
5   sales at $500,00015 sales at $200,000= ave. price of $275,000
The MLS would report that the average price of a home in Fulton county dropped 21.4%, from $350,000 to $275,000 and total sales remained constant at 20.
That would be an amazing number that would ... more

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