Against The Background Of The Foreclosure Crisis
Agents and appraisers are having the last say as against industry reports because against the background of the raging foreclosure crisis it is the locals who are the best judges of the real estate market.
For those living in a housing society the work is easy because one unit is similar to the other. But where there are up hills and down dales in housing variety involving not merely size but style, quality, condition and amenities, the gauging is a tough task. The ever-changing property and financial market further complicates matters.
Figures and statistics do not come of use in ground realities while calculating the value of a particular house. The National Association of Realtors or NAR makes use of the average sale price of existing houses. It has been noted that during a certain time span about half the houses were sold for more than the quoted average while the other half were disposed of at less. The increase in average indicates a rise in the overall prices of units or it may simply indicate that more costly houses costly houses were sold. For instance, last year in San Francisco more luxury properties were sold than starter houses. A drop in the median price shows that more inexpensive houses were sold, during that particular period. There are innumerable foreclosure properties in the lower price category. This may be the reason for the fall in the average in areas where the last mentioned houses are picking up sales.
Irrespective of the price of the house, the general tendency is for foreclosed houses to sell at 15% less than the other houses in the inventory according to Andrew LePage of DataQuick.
Thus changes in national average prices indicate little or nothing about the price in a particular locality. NAR reports that the national average fell by 7.7% in March from what it was in 2007. But reports from California Association of Realtors show that the average was less by 10.2% from March 2007. DatQuick numbers were different. According to it the average price of houses fell by 20.4% in the Bay Area in March from the previous March of 2007. But in Contra Costa County (in Bay Area) the average sale price fell by one third from the previous year. 44.7% of the sale transactions in March were related to foreclosures.
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