With the substantial percentage of Short Sales and REO/Bank-owned properties being sold each month, you can’t just track a single median home price that lumps non-distressed and foreclosures together to get a sense of what is really going on. Since the mix of REOs/Short Sales/non-distressed homes changes every month, a single median home price can go up and down just because of the different percentage mix in a particular month. For example, the overall median home price for SLO County Homes rose a bit in September but if you look at the individual median home prices, non-distressed home prices rose, REOs stayed about the same, and the Short Sale median price declined in September to the lowest amount so far this year.
The table below shows the median home prices for Single Family Homes in SLO County for each category. As you can see, the median home price for foreclosures has dropped this year at a much higher rate than non-distressed homes. Since any sold becomes the new comparable in a neighborhood, the aggressive pricing by the banks is only going to continue to bring all home prices down.
The gap between the median home price for non-distressed and REOs is pretty huge and has grown even bigger this year as shown below. If you look at the statistics dashboards and look at Santa Maria, their median home pricing appears to be stabalizing, but their gap between non-distressed and REOs prices is half of SLO Counties and has decreased this year. It’s hard to know if SLO County will follow what has happened in Santa Maria but it is interesting to watch how different these two markets are trending.