The question we always get at the start of the year is: "How is the market doing?"
And the answer always is: "Depends on the area or neighborhood."
People seem perplexed by the answer as if it were some sort of a trick response. This is not a trick response. The market's supply and demand are dynamic. What buyers demand may differ from month to month and from neighborhood to neighborhood and from different type of homes.
One type of home may sell like hotcakes with rising prices while another type of home in the same area may do the exact opposite. Sounds odd, but it does happen frequently.
Let's look at an example of how this could be the case. Here are the results for the City of Santa Clara in February 2017.
Single Family Homes in Santa Clara sold well and drove up the median price by nearly 16%. The sold volume was nearly double from the previous month. Sounds like the market is hot and prices are rising.
The condo market, however, did not do as well at a quick glance. It also sold nearly twice the amount as the previous month, but the price paid dropped by nearly 12%. Same city but the item that everyone wants to know about - the selling price - is going in opposite directions as the Single Family Homes. Not exactly what is typically expected. People expect if one price goes up, everything goes up on the same trajectory.
Yes, I realize this is a very simple answer and there could be multiple reasons as to why the condo prices dropped: in this case, lots of lower priced units came on the market than prior months. You would only know this by looking deeper into the data. That is why the answer is "depends on ........"
However, people want simple and quick answers. And there lies the problem of providing an accurate answer to that simple question.
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