1^st Issue of October 2008

Resale Sales Pricing Analysis

The Median Price in the recently-released August ARMLS¹ resale sales reports is $185,000, a decrease of $5,000 from the July reports. The Average Price dropped from $249,200 to $237,800. The graph below displays both the monthly Average Price and Median Price of resale homes sold in MLS from January 2002 through July 2008.

The average price is calculated by dividing the sum of the sales prices by the number of homes sold. The median price is determined by finding the price where the quantity of homes sold for less than that price is equal to the quantity of homes sold for more than that price. The median is a better indicator of the overall market.

Commentary

Our current real estate market is being driven by both supply and demand. Up until two years ago, demand was the primary driver (B and C). Then, for the past two years supply was the primary driver (D and E). The trigger for the significant fall off in sales prices over the last three months has been the drastic decrease in demand experienced during that period of time. We may have entered a sixth market condition of price fall-off.

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¹ The Arizona Regional Multiple Listing Service encompasses most of Maricopa and Pinal Counties.