There were 11 new listings and 11 properties went into escrow.  This is what I consider to be within the range of a "healthy market".  You may notice something interesting:  The average price of the 11 new listings came out to be $1,363,309!  You may notice one new listing is priced at $6,800,000, which dramatically affects the overall average.  If we back out the $6,800,000 listing, the average list price drops to $819,000.  Subsequently the median price goes from $879,500 to $834000, representing a reduction of 5%.

 

The interesting phenomenon serves to prove a critical point to remember when you see or hear media reports of the fluctuating median home price in San Luis Obispo County. Many analysts would look at this information and proclaim that the median price of homes listed for sale dropped 5% in one week!  When you apply this same principle to sale activity, you can see that the sale of one or two high priced homes can dramatically increase the median home value and a disproportionate number of sales of lower priced homes would cause a dramatic decrease in the median.

 

The bottom line is to be cautious when you read or see reports regarding our county median home price.  Reviewing the number of active listings coming on the market, the number of sales, and the ratio between the two is important.  As of last week we had 123 active listings, and 39 properties in escrow.  This represents a ratio of 3:1, which I believe to be a more balanced market, and which is significantly higher than we've had the past few years.  Sellers must be more competitive, and buyers have more to choose from.

 

As always, please feel free to call me if you have any questions and/or comments on this issue.  I appreciate the opportunity to be of assistance.

 

Sincerely,