Each month, the National Association of Realtors® releases a study called the Existing Home Sales report. It’s a detailed look at “used” home sales data from all four regions of the country.
One of the key findings in each Existing Home Sales report is something called the “median sales price”, the statistical price point at which half of the homes in the U.S. sold for more, and half sold for less.
Last month, the median sales price in the United States fell to $215,100, off 6.1 percent from a year ago.
But, just because the median sales price is falling doesn’t mean that housing is necessarily in the doldrums. Real estate is tied to local markets and the national statistics rarely make sense when applied to any given city.
For example, the $215,100 median sales price for the nation is as outrageously inappropriate as a sales price to New York City as it is to Minot, North Dakota. In fact, it’s the very definition of “median” that discounts its ability to reflect the health of the national housing market.
If large numbers of homes are sold and the price tags are high, the median sales price will trend higher. Conversely, if large numbers of homes are sold and the price tags are low, the median sales price will trend lower.
The median is just the middle point.
The falling median home sales price in June may indicative of first-time home buyers outnumbering luxury ones, or banks successfully unloading homes in foreclosure. And this idea may be supported by the data which shows that the West and Northeast led the decline.
So if you’re trying to gauge the health of your local real estate market, consider asking a local real estate agent for help. A skilled agent’s analysis will be infinitely more practical and useful than the national data pumped out by the industry trade group.