jg – I agree with your point that a single sale does not affect the median much. But, I have a problem with citing a 34% decline from monthly data. It is a bit of exaggeration because the monthly figures are so noisy.
Your original point of a decline happening is true in these data, but taking a one-month peak is either naive or disingenuous. The press does this all the time and we rail on them for it.
Monthly zip code reports are very noisy. In this case the monthly fluctuations have been on the order of 200-500K for this zip code for the past 18 months. With this much noise, the confidence in a 300K drop is small.
For example from October 2005 to May 2006 the median La Jolla Price INCREASED by 59 %. 59 % WOW !
Could you imagine the response on this board to a headline about a year ago that said La Jolla prices are up 59% in 7 months, a huge Spring rally for La Jolla.
If we average over longer time frames, the noise of the estimate is reduced. If you average the last few months and compare it to say 2005-2006, it appears that prices have dropped from about 1.8-1.9 M to about 1.5 M, about a 15-20% drop.
