I had the same thought, and I ran the numbers for houses of different sizes a few months ago, and the data is surprising: $/sq ft goes up and down for the past year for each size range. $303, $307, $302, $308, $306, $305, $309, etc. just citing from memory.
So $/sq ft is not declining, even when grouping homes by size. The reason is that in a rising housing market, everything sells. In a declining housing market, only the pretty ones sell.
In March 07, the average price was up 3% over March 06.
So forget the average, median, Case-shiller, OFHEO, $/sq ft, because they don’t account for the distribution mix, remodels, and whatever else. The data lies. The data lies. The data lies.
The homebuilding analysts at Credit Suisse devoted an entire report to “Data Masks Grim Reality”, where they say the data lies. I have a summary of their findings on my website.
If you want to know what is really going on with prices, talk to realtors. Find out how much house A is worth today and how much it was worth 6 months ago, 1 year ago. Then you know what is happening with prices.
I am coming to the realization that real estate prices cannot be culled into one number, and that data is misleading or lies.
If there is one number I have to pick, it’s months supply, because it tells me if prices will move up or down.
