Say you were standing with one foot in the oven and one foot in an ice bucket. According to the percentage people, you should be perfectly comfortable.
~Bobby Bragan, 1963

Here’s the real problem with year-over-year statistics:

The follow is quote is from the comments on Which California did you mean?!

Year-over-year appreciation in your markets (by city) was as follows:
Albany -8.6% ~David G from Zillow.com

Here are the actual unscreened statistics taken from the Multiple Listing System:

Market Summary Month of April 2007

Price Range No. of Listings Dollar Volume Average Price Median Price DOM
Detached
$550,000 – $554,999 1 $550,000 $550,000 $550,000 13
$565,000 – $569,999 1 $565,000 $565,000 $565,000 29
$580,000 – $584,999 1 $580,000 $580,000 $580,000 12
$595,000 – $599,999 2 $1,195,000 $597,500 $597,500 17
$605,000 – $609,999 1 $605,000 $605,000 $605,000 21
$645,000 – $649,999 1 $645,000 $645,000 $645,000 13
$725,000 – $729,999 1 $727,000 $727,000 $727,000 12
$795,000 – $799,999 1 $795,000 $795,000 $795,000 15
$875,000 – $879,999 1 $875,000 $875,000 $875,000 14
$1,005,000 – $1,009,999 1 $1,006,000 $1,006,000 $1,006,000 8
Sub Total 11 $7,543,000 $685,727 $605,000 16
Condo
$285,000 – $289,999 1 $285,000 $285,000 $285,000 156
$430,000 – $434,999 1 $430,000 $430,000 $430,000 56
$450,000 – $454,999 1 $450,000 $450,000 $450,000 3
Sub Total 3 $1,165,000 $388,333 $430,000 72
Townhouse
$485,000 – $489,999 1 $485,000 $485,000 $485,000 9
Sub Total 1 $485,000 $485,000 $485,000 9


15 $9,193,000 $612,867 $596,000 26

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Market Summary Month of April 2008
Price Range No. of Listings Dollar Volume Average Price Median Price DOM
Detached
$350,000 – $354,999 1 $350,000 $350,000 $350,000 98
$610,000 – $614,999 1 $610,000 $610,000 $610,000 14
$625,000 – $629,999 1 $625,000 $625,000 $625,000 18
$680,000 – $684,999 1 $681,500 $681,500 $681,500 8
$765,000 – $769,999 1 $767,500 $767,500 $767,500 17
Sub Total 5 $3,034,000 $606,800 $625,000 31

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Condo
$340,000 – $344,999 1 $342,000 $342,000 $342,000 7
$345,000 – $349,999 1 $348,000 $348,000 $348,000 31
$385,000 – $389,999 1 $385,000 $385,000 $385,000 55
Sub Total 3 $1,075,000 $358,333 $348,000 31

8 $4,109,000 $513,625 $497,500 31

1. Because of low inventory, many statistics rely on a small handful of closed transactions. Last year the City recorded 15 closings in the month of April compared with only eight in 2008. One of the five single family homes (three were condos) used to derive this years statistics was a freeway impacted fixer on Polk street which sold for an artificial low of $350,000. This home alone has a dramatic impact on the statistics representing 20% of the remaining single family homes recorded.
2. Many of the sales forced by the mortgage melt-down are in lower price ranges where sub-prime financing played a key role in the purchase. 40% of this years sales in April were condominiums verses 26% last year.
3. Conversely, many of the sellers with significant equity in desirable neighborhoods are choosing to stay put. The resulting inventory has shifted towards lower priced houses which in turn affects the statistics. The property with the highest value last year ($1,006,000 for 1749 sq ft of living space) was at 1031 ORDWAY STREET, which is Albany’s top location. This year the highest value ($767,500 for 1372 sq ft of living space) was on 535 STANNAGE AVE just two blocks above San Pablo Avenue a good two tiers below Ordway in neighborhood desirability.

The year-over-year sales jumped to different locations within Albany, and to smaller properties– while presenting fewer properties to test the averages. What does -8.6% mean if the statistics are chasing a moving target?

Tip for Sellers: The transactions we see daily do not behave according to the stats. We see the specifics change dramatically neighborhood by neighborhood and street by street. If you want to know what your home is worth in all of this, have your real estate agent prepare a Comparative Market Analysis, which will pull the most current sold prices for homes nearest to your property. Compare apples only to other apples. Random percentages don’t cut it anymore; you need to see for yourself where the statistics are coming from.

Tip for Investors: The twisted statistics do create an opportunity for investors. Since institutional lenders are not here in the trenches, they must rely on statistics, regardless of how faulty they are. What’s more, in the current climate they are happy to act conservatively based on the numbers. Short sales and foreclosures (where they exist) do present an opportunity for investors as it is easy to negotiate and justify a low price to someone who is judging our market by the statistics.