Reagor’s article seems to have worried a client of mine. I bet a few Realtors got a few emails about it.
The part were she really lost a lot of credibility with me was this.
If prices fall 10 percent this year, as analysts predict, the median price of an existing Valley home would dip to around $238,000.
That 10% decline was the main point of the article. In fact, it was the subheading “Home prices may dip 10% as fear grips Valley market.” That subheading was just irresponsible.
A 10% decline this year is simply not in the realm of possibility.
Reagor used a different data sourse in her example but if you use Arizona Regional Multiple Listing Service (ARMLS) data you’ll find that the median home sale price in January 2006 was $255,000. In May 2006 it was $259,900, an increase of $4,900. So, in the first 5 months of the year the median price went up, not down!
So to get a 10% decline this year, the median price would have to fall to $229,500 or a fall of $30,400 from May’s median home price.
A price decline of $30,400 in 7 months would be a real estate bubble of biblical proportions. The median home price wouldn’t go down by $30,400 by year’s end if Roosevelt dam burst.
Who were those “analysts,” anyway, who predicted a 10% decline this year?
(Did I misread her article? Did she mean it other than the way I took it?)