I met with a seller this week whose house has been on the market longer than my average Days on Market. They are priced over $700,000 and in my market that's the high tier. Nothing sold last year over $599,999.
In preparing information for our meeting, I looked at the average sale price over the last 12 quarters and, yup, it had gone down.
But by itself that is misleading. If we've lost the upper tier of the market, and the reasons are many, then of course the numbers scale downward.
Not being comfortable with that analysis, I pulled up information on a couple homes. They had been purchased in 2006 and resold in 2009. When I compared their original sale price with the latest one, the adjustment downward was actually considerably greater than the decline in the average price.
The average price declined from a high of $255,000 in 2006 to $213,000 in 2009, a 16% drop.
But the two houses I researched, both of which were short sales, declined 25%! Had they been bank owned properties, the decline would have been greater. If they were "normal" sales (not distressed), they might still be on the market.
There are so many layers in this market that it's really hard to make big generalizations. As we all know, real estate is local. Never more than now.
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