Median Prices Now (2008) and Then (2003)

May 12, 2008

I've been reading editorials that suggest that the prices of residential properties have fallen dramatically. I suppose "dramatically" is a relative term. If you are a seller, and you thought your home was worth a million dollars a few years ago and now eight hundred dollars is what the appraiser says it is worth today, the decline is dramatic (20%). If you are a buyer of the eight hundred dollar listing, your offer will still be another 10% less than the list price. As has always been the case, the fair market value of a piece of real estate is the price a willing and qualified buyer will pay to a willing seller. Negotiation is usually necessary.

Just out of curiosity, I researched the IMRMLS to see what the median selling price was in April 2003 versus the median selling price in April 2008. Sometime in 2002 to 2003, the Inland Empire real estate market changed and since 2007 it has backed off the peak. What I discovered is that 2008 median prices are 25% to 30% greater than the 2003 median prices. I suspect that in future months, the comparison of median prices will show the rising market of 2003 and the stabilizing market of 2008.