Just In: Where Are Prices Now And Where Are They Going?

[Kurt]

Where Are Prices Now And Where Are They Going?

Submitted by Murray Balkcom on 10/12/10



Recently, someone showed me a graph of average price sales for homes in Walton County, noting that prices had no where to go but down.

I compiled sales data back to 2003 from Emerald Coast Association of Realtors, but using a better indicator, median sales price, and limiting the sales to South Walton



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[SHELLY]

Where Are Prices Now And Where Are They Going?

Submitted by Murray Balkcom on 10/12/10



Recently, someone showed me a graph of average price sales for homes in Walton County, noting that prices had no where to go but down.

I compiled sales data back to 2003 from Emerald Coast Association of Realtors, but using a better indicator, median sales price, and limiting the sales to South Walton



Read more

In your narrative, you stated:

"The linear progression (white line) shows that in 2010, we are relatively in line with the historical median price growth. Did your view of current median prices change after looking at this graph? This growth line is fairly steady, with median price growth of about $25,000 per year. "

Can you please show the math??

$25,000 x 17.5 years = $437,500

Add that to the starting point on the graph (1993) at $100,000 and the current price should be $537,500--no?

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[Em]

 

[SHELLY]

So does the $25,000 per year figure you quoted include the dates that you extracted out of the graph (2004-2009)?

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[Em]

No, as I thought I clearly stated, the data excepts 2004-2009. I included the exception in the title of the graph as well as in the x-axis labels. It is basically a graph showing that if we hadn't seen the crazy run up and fall down in the market, we would be in line with traditional real estate growth.

 

[SHELLY]

No, as I thought I clearly stated, the data excepts 2004-2009. I included the exception in the title of the graph as well as in the x-axis labels. It is basically a graph showing that if we hadn't seen the crazy run up and fall down in the market, we would be in line with traditional real estate growth.

...but how did you come up with the ... "median price growth of about $25,000 per year. "?? Is that some type of "NAR math?"

Further, you don't think $25K per year (however you ended up with that figure, I don't know) isn't a "crazy runup" in your estimation--seeing that "traditional" RE appreciation is 4-5%?


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[Em]

I believe that excel formula for the linear trendline is:
y = m * x + b
m: =SLOPE(y,x)
b: =INTERCEPT(y,x)

The $25,000 per year doesn't mean anything without a basis, and I clarified that this historical data includes 1993-2010, excluding 2004-2009. If ECAR stats went back to the first land sale in South Walton, I would include them too.

 

[SHELLY]

I believe that excel formula for the linear trendline is:
y = m * x + b
m: =SLOPE(y,x)
b: =INTERCEPT(y,x)

The $25,000 per year doesn't mean anything without a basis, and I clarified that this historical data includes 1993-2010, excluding 2004-2009. If ECAR stats went back to the first land sale in South Walton, I would include them too.

Your formula for a linear function is indeed correct--but in regression analysis, you can't just arbitrarily remove the mid-data points that don't fit your thesis and state the results as sound. That being the case, the results at worst would be deceptive or at best would simply be a fairy tale.

...still can't come up with a $25K per year figure though--no matter how I've sliced it and diced it--maybe the readers won't question that....you hope.

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[Em]

I understand that you cannot eliminate what has already happened. I'm using the graph to show where we would line up if the boom and bust hadn't existed. It is not meant to represent anything more. It is not trying to be in fairly land, cutting out that which we don't like.

 

[SHELLY]

I understand that you cannot eliminate what has already happened. I'm using the graph to show where we would line up if the boom and bust hadn't existed. It is not meant to represent anything more. It is not trying to be in fairly land, cutting out that which we don't like.

Just as a matter of full disclosure....can you redraw the graph and this time include the data you extracted?