It must be the middle of a month, because another batch of home price statistics is in. Jondi Gumz has written up another good piece of home prices in Santa Cruz county:
Nearly four out of 10 single-family homes sold for less than $500,000 in Santa Cruz County in July, as buyers took advantage of falling prices.
The median price was $607,5000, a tiny uptick from $600,000 in June and dramatically down from $775,000 a year ago. The median is the mid-spending point for what sold.
Just to clarify that: say that you had 21 homes that sold in an area in a given period. You sort them from low price to high price, then you find the house in the middle – the 11th house. If there are 21 homes sold, the 11th house’s sale price is the median sale price. 10 houses sold for less money, 10 houses sold for more money. If there is an even number of homes sold, you take the two in the middle, you find the difference in prices, divide it in two, and add that amount (half the difference) to the lower-priced house (or subtract it from the higher priced house) to get the median home price.
Of course, there is a pretty raging debate about whether the median home price means anything at all. The VP of Data and Analytics at Zillow.com had a good blog entry about the median home price. It’s interesting to note that the Zillow blog entry talks about the OFHEO Housing Price Index – because the OFHEO housing price index is probably going away now, since the OFHEO (Office of Federal Housing Enterprise Oversight) itself is slated to be merged into a new entity, the Federal Housing Financing Agency. Look for a new index from them soon, I suppose.
There seems to be a lot of consensus that the Case-Schiller Index is a pretty good metric. The Case-Schiller index looks at the resale values of the very same home to see what’s going on with home prices. Unfortunately, the Case-Schiller Index takes a while to put together – they released the Case-Schiller index for May of 2008 in late July. If you’re very interested in how they put the numbers, together, they do publish a nice PDF detailing the methodology of the Case-Schiller Index.
Unfortunately, the Case-Schiller index does not include Santa Cruz county, sorry. It tabulates numbers for large metro areas. So looks like we po’ folk out here in Santa Cruz are just going to have to stick with the trusty, rusty median home price as a rough measure of what’s going on. I think it’s pretty clear by now that all housing types, in every location throughout the county, are off their peaks, some of them (south county, north county) by huge margins. Some areas are holding values much better than others (Capitola, West Cliff, etc.) but that I suspect even these shall fall as these next several months roll by. Stay tuned!