You may have seen an article in the San Mateo Daily News on October 22nd, Calif. home sales jump 65 percent. It said:
DataQuick said home sales in a nine county region around San Francisco Bay jumped 45 percent from a year ago, as the median home price plunged to $400,000, a 36 percent drop from $625,000 in the year-ago period.
What does that mean? Well, the plunge in median prices is directly attributable to bargain hunters looking to buy at “liquidation value.” The bulk of the home sales in the past couple of months are short sales and real estate owned by lenders (REOs) who have taken the home in foreclosure.
REOs and foreclosures are sold at liquidation value, not fair market value. They are, by definition, distressed sales. The problem with distresses sales is that they disorient the market place. Here’s how…
The median price of an area is affected by the volume of specific distressed homes being sold, rather than a decline in value of any specific home. Well located, well priced homes in good condition are still selling at their fair market value and sometimes with multiple offers, but the number of distressed homes being sold forces down the median price point and other statistics – making it seem as though the market, as a whole, is less valuable.
Just another reason why homeowners that don’t have a compelling reason to sell, shouldn’t.
Other Posts You May Enjoy
- September 2008 MarketWATCH Report
- Deal or No Deal?
- Is It Really the End?
- More Positive Statistics for San Mateo County Real Estate
- August 2008 San Mateo County Real Estate Statistics
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Raymond Stoklosa, Broker/Co-Owner
Chela Stoklosa, Realtor/Co-Owner
