Average prices don't really tell you about the market

I agree with you wholeheartedly. Our market is very different depending on whether you're looking at the higher end, middle of the market or entry level price range. And neighborhood by neighborhood. It's so critical for buyers to have a knowledgeable, local area specialist assisting them! And as Realtors, it's important for us to be on top of the trends. The only thing costant in my market is the change!

Sharon, I agree and I like your "mini-market" description. Averages and regional (even countywide) data can never give an accurate read on what's happening in a given specific location or neighborhood. Some areas and neighborhoods are outperforming the average while others are below. It's the application of local conditions (specific area/neighborhood inventory, days on market, features) that is crucial to any in depth analysis. Excellent post!

Sharon - I focus on a very small market area, normally 50-60 homes sold per year, but in 2007 only 25 homes sold.  Nonetheless, when you really dig down beneath the numbers, it becomes clear that there was a two-tiered market.  Homes below $400,000 gained value and those above $400,000 lost value.  The differences were quite dramatic.  This is the first time that our market has shown a bifurcation of values.

Yes, you must always be careful how you interpret this data, I agree, that average home prices and those data points can be problematic when trying to ascertain the pulse of the market. Lance

Data is data and really tells you little unit you know how to read it. We get faced with that all the time.  

I have seen patterns in my market.  For example when we had a troop movement we saw lower priced condos moving faster.  That meant lower average sale prices and a lower median price for that period of time.  Did that mean prices were dropping?  No, it meant that the lower end properties had a rush of business.  The higher end ones were still moving the same as before.

So, so true, but it seems the buyers are so nervous with the economy, they listen to all of your guidance, and still feel they should take another 5% off, to prepare for future.  I prepare the buyer cma, and it is much easier to do when similar units have sold,  but you need to try and get the prices of the units that are in contract, you just have to be so current. I know I am going off a little, but it is just when you get what the price is, will appraise for, is fair for both parties, that still both feel they are being cheated.

When we say it is local, it is often not about the market in general. In one condo the  developer is still selling a few units and they go for under $300K, however all resales in t he same building for for $500K+. The minute the developer walks out of the building, those under $300K are gone. The  next budilding has all unit that are resale. These o a mini scale woudl be a totally different market