A recent headline that appeared in northjersey.com stated…NY metro area home prices continue to slide Something didn’t jive with the article compared to the research that I do on a continual basis. So I started digging a little deeper.
It’s not so much that prices may have come down, but the research indicates that more people are purchasing lower priced homes than in the past…and this is what’s causing the casual eye to think that prices have dropped.
Purchasing lower priced homes has nothing to do with lower prices, as one would take from reading this article.
The median price which most reports use as the value of a home, is simply the middle price of all the homes that have sold in a particular time period.
It has nothing to do with an increase or decrease of pieces.
The fact is, the flight to lower priced homes in Bergen County , New Jersey, is something that has occurred since 2006.
People aren’t buying nearly as many higher priced homes in our area, as they used to. And that’s going to be the way it is for a very long time…eventually homes in the higher price points will come down in value. But until they do, all that we can say is that they are not selling.
We can’t specify for a fact , what these homes are now worth.
Furthermore, to lump all housing types into one bundle and not break them down to indicate what they are also misinforms. Single family home sales:
- This chart simply shows that more sold for under $1 million in 2012 than in 2011…a 207 home increase.
- The remaining price ranges remained basically the same.
This simply skewed the median price downward…not the price of the homes Multi-family home sales:
- The same thing has basically happened to the already anemic multi-family market…more people are purchasing lower priced units.
None of this is to say that prices haven’t dropped some, but the data being used doesn’t accurately portray the market.And again…to lump the region all together is inaccurate as well. Real estate is local, and within each town there are several micro markets that act differently from each other. I lay fault with all this market misinformation on the Realtors and their trade associations.
They have the informational…from homes for sale, sales prices, and a whole host of other facts and stats. But they refuse to make it all available. How can you trust someones information if they won’t make it transparent and verifiable? You can’t.
This is my little attempt to make some sense out of something that’s made very confusing.
Let me know what you think. And if you have some facts that will add to the story then please tell us.