I posted the following on the Tribune site about the article today stating that home prices have increased….
Actually, prices haven’t risen that much (or at all in some cases). The Tribune uses DataQuick for their stats which doesn’t track the sold homes by non-foreclosures, REOs, and Short Sales. If you aren’t tracking foreclosure mix % and the median home prices of each class of property, the data is incomplete. What’s happened this year is that the foreclosure mix has changed in that the percentage of REOs (bank-owned) solds have decreased. Since the median price of REOs is well below the median price of non-foreclosures and short-sales, less REOS in the mix will make the overall median home price go up. Data Quick only reports the overall median price.
Comparing the first 6 months of 2012 for single family homes in SLO County, the median price for non-foreclosures has decreased slightly ($425K in 2011 vs. $420K in first 6 months of 2012). The Short Sale median has decreased slightly too ($328K to $325K). The REO median has risen ($275K to $291K).
In regards to the foreclosure mix, non-foreclosure solds are now at 68% vs. 2011 when the yearly average ended up at 61%. REOs decreased from 28% to 21% and the Short Sale mix is unchanged at 13%.
The foreclosure mix for condos in SLO County has changed even more. We were at 51% of non-foreclosures for 2011 and so far in 2012, that has jumped to 66% Condo median prices have risen for non-foreclosures and short-sales, but have decreased for REOs. The jump in the overall median price for condos is primarily due to the foreclosure mix change.
DataQuick stats are fine to use pre-2006 when there were few to no foreclosures but not really useful in this market.