To me, looking at median price movements is like looking at GDP data. A 0% – 1% growth rate sounds like we’re doing OK but its feels very painful especially in like of the expectation that living standards should increase.
That figure does not reflect the state of the local markets.
Median price is not the same house value because of the changing composition of the house sold. Let’s say that buyer expectations is to pay $500k for a SFR. If houses drop 20%, buyers will (at least initially because they are unware of market movements) continue to buy $500k but they’ll get better homes. I believe that’s what is happening now…. buyers are still thinking we’re taking a “breather” from price increases.
I was at the auto shop today and was chatting with a Realtor who was there. He drives a very expensive sedan but couldn’t afford to get his power steering pump fixed until next month. But he still believes that the Spring will bring about an upturn in the market. Yeah, many are still drinking the cool-aid.
