Last issue’s column was dedicated to a discussion of the cyclical nature of real estate values and how those cycles come about and relate to the general economy. We are currently coming off a serious devaluation of real estate and are now in an expansion phase where inventory (supply) has diminished and buyer confidence (demand) has begun to increase.
As a follow-up to that discussion, this week we are just going to look at the numbers, and compare the median prices of homes in the four areas of the U.S., and then focus on our California market. First of all let’s have a definition. The median price is the midway point of all the properties sold over a given period. If 101 houses were sold in a month, the median would be the price of the house at number 50. This is not the same as the average or mean price which you would arrive at by adding the sales prices of the 101 homes together and then dividing by 101. The median is a more accurate indicator than the average as a few very high or very low prices can skew the sample.
OK, so now that we know what the median is, let’s look at the U.S. as a whole. The National Association of Realtors gives the current median price in the Northeast as approx. $271,000; the West at $287,000; the Midwest at $168,000 and the South at $183,000. The Northeast and West are faring better than the Midwest and South. These numbers are very current, tallied in late September 2013.
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