Problems with using median price in MLS staistics

By
Real Estate Agent with Coldwell Banker Burnet

What is the median price anyways? The median is the value which divides the sequence in half, so half the homes which sell, sell for more and conversely the other half sell for less. What would be the problem with using this to broadly represent the change in home values? The real problem is when the higher priced homes start taking dramatically longer to sell! In this situation, even if prices remained the same, but the rate of sales of the higher priced homes slows (which has happened in every market I've reviewed locally) the median price will drop! (more lower priced homes selling in the same time period)

For Cottage Grove from Jan 1 to Nov 19 2008

$200-300k Cumulative Days on Market was 125 days

$300k-$400k its was $237.5 days, nearly twice as long which would really skew the median price down (great time to move up!)

Well how the heck is anyone supposed to figure out what is happening?

I prefer to look at specific locations, styles, sizes and age groups of homes and compare the cost per square foot changes. I don't usually use a cost per square foot to analyze a single home, but in a large enough group, I believe it gives the best indicator as to what that specific market is doing.

For example, a MLS search of Cottage Grove 2 Stories built between 1980 and 1995 with above ground finished square feet of 2000 and 2600 sf

Jan 1 to Nov 19, 2008 the average price per sf is $103.82

2007 is $108.76

2006 is $118.60

2005 is $124.23

2004 is $121.26

2003 is $119.84

2002 is $98.59

as you can see, for this sampling, today's per sf pricing is back to where it was between 2002 and 2003 and roughly 87.5% of its peak in 2005 a drop of 12.5%

Every property is in a unique market and needs to be compared as such!

Watch what you read, if it says median price be careful!

 

 

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Topic:
Home Selling
Location:
Minnesota Washington County Cottage Grove
Tags:
market statistics when to buy

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Rainer
963
Tom Ott
Coldwell Banker Burnet - Cottage Grove, MN

Forgot the 2005 days on market

$200-300k Days on Market was 54.4 days

$300k-$400k its was  82.9 days

 

Nov 19, 2008 11:15 AM #1
Rainer
80,254
David Painter
Keller Williams Realty - Spartanburg, SC

Congradulations on your first post. Good to have you on Active Rain.

Nov 19, 2008 01:04 PM #2
Rainmaker
540,593
Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Tom....Welcome to ActiveRain.  This is a great community to network with others as well a great place to learn from other's experiences and knowledge.  I've enjoyed it; I hope you enjoy it as well.  Congrats on your first post.

Nov 19, 2008 01:14 PM #3
Rainer
11,486
Jason Fleming
Jason Fleming Agency INC - Coon Rapids, MN

Congratulations on your first post!  This is a great spot to do your networking.  Feel free to give me a call if you have any questions.

Nov 19, 2008 01:54 PM #4
Rainmaker
559,228
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hello Tom,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to you!

-Keith

Nov 19, 2008 02:51 PM #5
Rainer
340,863
Yvette Gardner
Keller Williams Realty, Spartanburg, SC - Spartanburg, SC

Welcome to the Active Rain community. This is a great site with lots of information.  Have fun with it and hope to see more of your blogs soon!  We have a team of four outstanding full time agents to assist your buyers and sellers in Spartanburg/Greenville, SC.  Let us know if we can ever help. Again, welcome to AR!!

Nov 20, 2008 12:12 AM #6
Rainer
301,270
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes

Hi and welcome to active|rain. There are thousands of tips, tools, and tricks of the trade here. Be sure to check them out. Best of luck and see you around.

Nov 21, 2008 08:06 AM #7
Rainmaker
134,106
Rick Sergison
EXP Realty of Canada Inc., Brokerage - Pickering, ON
Durham Region Real Estate Blog

I just stopped by to welcome you to Active Rain. I hope that you find it a great benefit to your business and that you see the value that I have also found here. I am from Charlottesville Virginia and using Active Rain has really increased my business!

My main blog on Active Rain is here: Charlottesville Real Estate Blog, not the link at the bottom of this post. 

I hope you will look into the many groups as there are some great group both local and broad based,.... 

enjoy!

Nov 21, 2008 11:05 AM #8
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Rainer
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Tom Ott

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