Since the subprime lending market began to seize up in late 2006, median-based home price indicators — those that measure the typical amount paid for a home, as opposed to what buyers actually get for their money — have been rising despite evidence that home prices themselves were falling.

Lately, the pattern has changed. The size-adjusted median price for both single family homes and condos fell in July, as the accompanying graph indicates, with condos posting a particularly steep month-over-month decline. Even “plain-vanilla” median resale prices fell by in aggregate by 3.8 percent for the month after rising for most of 2007.

It could be that the composition of home purchases is no longer skewing towards high-end houses as it was earlier in the year. It could also be that buyers are still picking up more high-end houses, but that they are paying less for them. Or, as with any single month’s data, this could just be an outlier.

Consider also that the very recent mortgage tightening for high-end borrowers hasn’t even shown up in the data yet. Once that happens, I suspect that the median-based price indicators will become more aligned with reality. They may have begun to do so already.


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