For the first time since 1999 (and perhaps even longer than that, but the stats only go back that far on the chart), the average sales price of a home in the Tri-Cities area has dropped over the year previous.
Now, before any local sellers read this and start wringing their hands, let me assure you – it does not necessarily mean that the value of your home has dropped. The average sales price, or ASP, is a reflection of the direction of the market, not of the value of the homes in that market.
For example –
Let’s say fifteen homes sold in the month of December, five at $175,000, five at $200,000 and five at $225,000. The average sales price would be $200,000.
However, say fifteen homes sold in the month of December, broken down as follows – seven sold at $175,000, five sold at $200,000, and three sold at $225,000. The average sales price in that scenario would be $193,333. Fifteen houses still sold that month. The houses priced at $225,000 were still worth $225,000, the buyers were just not there for those houses because the direction of the market was trending down.
So, when you see that the ASP for 2008 was $191.6, and for 2007 it was $193.2, don’t worry that it means your house is worth less this year than last year. It simply means more people bought homes that were priced lower than homes that were priced higher.
Download the full Tri-City Real Estate stats for December, 2008. (712k PDF)