The media price per square foot for single family homes had a pretty typical month, dropping by 2.6 percent. But the same figure for condos dropped an amazing 14.8 percent in a single month. A volume-weighted aggregate of the two property type medians dropped by 6.4 percent for the month, ending up 41 percent lower than it was at the September 2005 peak.
Actual condo prices clearly did not drop by nearly 15 percent in a single month, of course. The drop in the median price per square foot likely reflects some degree of actual price declines, but the bulk of the decrease in the median almost certainly represents a shift in buyer activity toward lower priced properties. This is a phenomenon that has been going on for a while, though not to last month’s dramatic extent.
Such are the hazards of measuring what the typical buyer paid for a house or condo without accounting for how nice a property he or she got. Adjusting for square footage helps a little, but it does not account for differences in location, quality, or anything else. More about the travails of measuring home prices can be found here.
So while this month’s median price data doesn’t give us much useful information about actual prices, it tells us that — among condos, anyway — low-priced homes are selling a lot faster than high-priced homes.
— RICH TOSCANO