ASG

Existing Home Sales Clunk Along Bottom

uhhh Tim .... that "distortion" you talk about is simple math ... backed up by sound pricing studies

A number of studies - Orange County and Mpls/St Paul are two - have shown distressed sales show a significantly higher price decline than non-distressed sales ... in MSP distressed sales were off something like 11% year to year while non-distressed sales were off appx 4%

Distressed sales make up appx half of all sales in even in the worst hit markets (like Orange County) ... which means half or more of all sales are non-distressed, and as such have not seen as significant a poriuce decline

I suggest you spend some time researching and doing some math as well on what "median" price means ... you will find that the NAR comments are perfectly valid and on point ....

Even with NO price decline if the product MIX changes to lower price ranges the median price will drop ... and that is exactly what is happening - and in a very big way in places like Orange County where the shift to lower prices has been large

And with the proven disparity between distressed and non-distressed added to the mix the NAR comments are valid ... that current median prices are temporarily skewed by distressed sales and product mix and do not reflect the underlying market metrics

Point being as foreclosures diminish, which they are (and will improve further with all the modifications) the median price will see a significant jump

And as the markets recover and we see a more normal product mix we will also see a jump in median price

Median prices ARE correct as of today - but they also include temporary influences that cause a distortion