Median Prices Up & Sales Down By Record- What Gives?
Be cautious what you extrapolate to your neighborhood market from national real estate media coverage.
Last week the press trumpeted that median home values were up everywhere indicating the housing market was in recovery mode and on solid footing. This week? The number of existing home sales were down nationally by a record amount bringing last week’s cheery news into doubt. How can this be?
Lack of thought and analysis are the reasons the press is so often off the market with their real estate articles. And government meddling is causing the current phenomenon of higher prices and lower number of sales. Fed driven record-low interest rates on larger loans are allowing more higher-priced homes to sell this year. Median home prices go up (not necessarily home values). Last year high-balance loans disappeared for awhile limiting high-end homes sales, and thereby causing median home prices to drop (not necessarily home values).
Why did the number of home sales plummet nationally? The federal and state tax credits accelerated the pace of lower-priced home sales last year and the first part of 2010. When the tax credits ended recently it created a short-term drop in demand for homes as many buyers purchased sooner than they might normally have.
The press only has time to comment superficially on national, state, or county averages. Contact a local Realtor specializing in your area for the current status of your local market.