February 2009 Market Update
Once again this month, the bright spot in our local real estate market is average sale price. I must admit if I could pick only one bright spot to have, it would certainly be prices as they do indicate that the Huntsville Real Estate market is a relatively strong one when compared to the happenings in many other areas of the nation.
This is not to say that prices have not been seasonally weaker than last year, because they have, nonetheless the magnitude of the recent weaker pricing in the market has been relatively tame on average.
Our charts picked up this seasonal weakness beginning in Oct 2008 when average price per-square-foot dipped below and has remained slightly below its annual moving average. February has showed some strength and prices are once again testing the moving average in the upward direction. February’s year over year prices were only ~1% lower than in 2008 and they still remain some 3% above February of 2007. Thus unlike unit-sales volumes, prices have yet to decline into the levels recorded in 2007 as illustrated in the following 3 year price chart.
As we have wrote and explained many times, working with average price statistics can be a bit hazardous if one is not careful. This is complicated further by the different methods in calculating such averages: mean & median sales price. The mean is a simple calculation: sum-of-all-sale-prices / number-of-units-sold. The median price on the other hand is a bit more complicated since it requires an ordered list and indicates that: units-sold-below-median-price = units-sold-above-median-price.
We won’t rehash the hazards of average sales price again within this post, but only refer interested parties to a previous post that apply illustrates the caution we wish to convey. Also as regular readers know, we prefer to work with square footage pricing in these analysis and again the reasons are elaborated on in another previous post for those interested. …And as always we will keep you posted.