Wednesday, February 18, 2009

Skewed report claims Palm Beach homes values rise in 2008

The Palm Beach Daily News reports today that an analysis of home sales reveals that median single family prices have gone up. Huh?

First, that is "median" as compared with "mean". The median is the number at which half of the homes sold for less and half sold for more. The mean is actually what most people understand as the "average". In other words, mean is created by adding up all home prices and divide by number of sales.

There is a reason why they report only "median" an not "mean": 3 gazillion- dollar properties skewed the market upward in 2008 (like Trump's 100 million dollar home ) dramaticaly as they report:

"As listed in The Evans Report, the median and average sales prices for single-family homes could be skewed by three exceptional sales in 2008: 1236 S. Ocean Blvd. for $81.5 million in April, 60 Blossom Way for $68.5 million in June and 515 N. County Road for $95 million in July."

So, if one factors OUT these three outliers then we have a tremendous DROP in mean and median sales prices for 2008.

Second, condos are a better indicator fo the market as condos tend to be more similar in price, size and condition than the tremendous variety of single family homes. Condos dropped in median price by....27%....!!!!!

"....Another concern is that the median sales price for Palm Beach condominiums dropped 27.3 percent from $825,000 in 2007 to $600,000 in 2008, Evans said...."


The palm beach home market clearly dropped in 2008 and for 2009 is already down further. Good buying opportunity if you don't mind buying "on the way down"

No comments:

Post a Comment