I think sdrealtors’ point is well noted – we all think the prices were climbing through summer 2005 because the median was going up. Well, we see how misleading that one number can be. Although we are seeing 5% reductions in many neighborhoods, and I got a 5% reduction in my 2 offers in December 05, the median price is still going up. There should be other metrics which complete the picture of what is actually happening, such as typical home month-month change.
At the current rate of price decrease, it will take many months before the median price reflects it.
This is why I like Bob Casagrand’s reports so much. He digs inside the numbers, and let us know several months ago that the median is up only because the lower end buyer is squeezed out, and proportionally fewer under-$500K homes are sold.
I still wonder how we can have thousands of above $500K sales every month, in a city where the median income is around $60K. How are people affording the $1.5mil homes? ARMs? IO teaser rates?
