Loading ...This from the Contra Costa Times today:
East Bay cities such as Berkeley, Brentwood, Clayton and Walnut Creek experienced a nearly 25 percent drop in median home prices from February of last year.
Walnut Creek’s median home sales price dropped to $519,000, according to DataQuick Information Systems, making it lower than the median home price for Martinez, Brentwood and Pinole.
Before you panic and put your home on the market, please take a deep breath and relax. As we have discussed several times on this blog, median home price tells you… well.. what the median home price was for a given period of time. Although it is used extensively by the media, it is not necessarily an indication of increases or decreases in values. It can be impacted by factors that have nothing to do with whether market values are going up or down, especially if the sample size is relatively small (for example, taking the median home price for an individual city). This from the article:
But many say those statistics can be misleading because DataQuick’s numbers include condominiums and both resale and new single-family homes.
“There were two condo conversions going on in Walnut Creek,” said John Karevoll, a DataQuick analyst. “It looks like those tugged the home median price down.”
Walnut Creek is known for its mostly resale housing stock and condominiums which can cause “bounciness,” Karevoll said. Condominiums, especially older resales, can drop prices quickly just as new homes give prices a jolt upwards. He said this can make a city like Martinez, which has a significant number of new homes and fewer condominiums, seem to have higher prices.
“People really should be looking at the broader trend,” he said. “If a new housing tract is open, home sale prices will go up.”
Smaller numbers also can create bigger swings in price. In tiny Moraga and Orinda, which had about a dozen sales each and rising prices, one home can push down or pull up the price hundreds of thousands of dollars, said Micky Gill, an agent with Century 21 Hosking Associates in Walnut Creek.
In the case of this article, the median home price in Walnut Creek is higher than of Martinez, Brentwood, and Pinole. If the relative values were less, I would expect to see gridlock in the streets of Walnut Creek, as throngs of buyers from Martinez, Brentwood, and Pinole would be beating down the doors of available homes in Walnut Creek and bidding frantically to snag one of these “bargains” in this “less expensive” area. Sure. And if you believe Walnut Creek is less expensive than these cities, I know of some swamp land you might be interested in as well.
A good rule of thumb is to take everything the media says with a grain of salt. Find local sources of information for the real story on what is happening in your market (like this blog, for example), or talk with professional brokers in your market to get an accurate take on the market.
Now, go get that For Sale sign out of your yard, calm down your wife and kids, and relax. Besides, if you really want something to get excited about, The Sopranos starts Sunday night.
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Just In: Walnut Creek (median) Home Prices drop 25%!