It’s interesting to note that in the last two years, for the first six months virtually the same number of homes soldâ€”94 in 2006 and 92 in 2007.
After the July news of the mortgage industry financial issues, the overall uncertainty of the market, and undoubtedly with anticipation that homes values may drop, 2007 saw only 127 sales as compared to 167 in 2006 for the second half of the year.
Can one believe the reported median price for Belmont?
The MLS system reported the aggregate Belmont real estate median home price in 2006 to be $925,000. That rose to $945,000 in 2007 or a little over 4%. Further analysis reveals that the median size home which sold in 2007 was 95 square feet larger.
Understanding the median home sold in Belmont during 2007 sold for $548 per square foot and the median size home sold in 2007 was 95 square feet larger, this could account for as much as $52,000 in the reported median sale price for 2007. Which means the actual median price in Belmont was closer to $892,000 or a decrease of 3.4%.
But it matter less what happened for the entire year if the market incurred a sudden and radial change later in the year. In other words, even if the market went up 10% for the first six months if it dropped 15% in the second six months the current value as of December is more important.
Looking at Belmontâ€™s median home price at the end of December in 2007 as compared to December of 2006, we see that in 2006 the median home price was only $850,000 and at the end of 2007 a whopping $1,025,000. Applying the same logic and adjusting for whether larger or smaller homes sold during the two periods, we see that in fact the median size home sold in 2007 was 370 square feet larger. Using our above price per square foot number of $548/sq. ft that eliminated $202,750 of apparent appreciation and means the true median price would be closer to $822,000 in 2007 as compared to $850,000 in 2006 or a 3.2% decrease year over year.
Â· This report has been revised with the release of additional data. Sources used in data analysis included Multiple Listing Service searches and REILPro Statistics.