Home Prices Drop 40% - Almost
My mom just called and she was all concerned that the price of homes had dropped 40%, she heard it on TV so it had to be true.
One thing really nice about cable internet is you’re always online so I searched Google for “california home sales down sacramento” and I find the web page that has the story she heard.
What it actually says is:
- A report from the California Building Industry Association shows new home sales in Northern California fell 40 percent during the past three months, compared to the same period last year.
They try and make it sound dramatic so that people will be interested but what this actually means is that 40% fewer people sold their houses over the last 3 months compared to last year at this time, this could be as few as 50 houses. I don’t know the exact number of houses that didn’t sell.
This does not surprise me since all the new homes I looked recently cost around $800,000 and they were selling in a week or two.
Only a few years ago if I had an $800,000 home to sell I would say it could take a year to sell, that’s what I would have planned on. Now people are expecting to sell it in 3 weeks or less, because that’s what their neighbor did.
That’s not going to last, it can’t...
but people get used to it because it happened last month, or it happened to someone they know.
The other thing is that this statement in the news nothing to do with prices, the 50 or so people who didn’t sell their house as soon as it went on the market may all sell next month and get their asking price.
This means that actual value of the houses has not dropped 40% it has dropped 0% it is just taking a couple months to sell a house instead of a couple weeks.
When you hear about real estate statistics you have to look real close before you decide if they mean anything or not.
The real estate story was on news10.net and I am not knocking news10, I am sure they do a great job presenting the news.
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