I know everyone hears on the news that the prices of homes is going down all over the country. The media has a very convincing way of using statistics to sway the publics perception of what is happening. While some other areas of the country are seeing slight price corrections, this is not necessarily the truth here in the Northwest.
When the news reports show that the average home sold for less money than previously, they are using the average home sale price. They do not take into account the actual home prices of similar homes.
Let me explain how this can be incorrect. Say for example that last month 5 homes sold.
one at 150K
one at 250K
one at 350K
one at 450K
one at 550K
That is an average of $330,000 per home
This month we have also sold 5 homes
one at 200K
one at 275K
two at 310K
one at 390K
The average is now $297,000
The media automatically concludes that housing prices fell 10 percent. This is not the case.
What actually happens is that fewer more expensive homes and more less expensive homes sold.
It's interesting to see that the new homes in developments still seem to be going up. It is much better to compare these since they have several of the same floor plans that are being sold over a period time.
I recently resold a home for a client that was trasferred after only being in the home for a few months. He did no improvements at all, and made a profit even after paying for the closing costs.
While I do think the market has slowed slightly, Real Estate is still the best investment out there.
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