With the real estate market slowdown, what once made sense when it came to pricing a house no longer holds true.
Across the Baltimore region, as in the rest of the country, the average sales price of houses continues to drop.
In September, the average sales price in the Baltimore metropolitan area dipped more than $21,000 from the prior month to about $296,000, according to Metropolitan Regional Information Systems. Compared to a year ago, home prices were down almost 6 percent overall - retreating to figures not seen since 2005. That price drop was the largest since the housing slump began.
But it's all relative, say some real estate professionals who contend that the market is just correcting itself after years of a wildly overpriced housing boom. Others say that moderately priced housing in good condition is selling better and accounting for a lower average sales price, as buyers are more cautious in lean times than they were just one year ago. Also, distressed sales - homes being sold quickly at often-reduced prices - are greatly affecting the bottom line.
So how does the average sales price fit into today's market?
It depends on whom you ask.
Walter Molony, a spokesman for the National Association of Realtors, says that using the average sales price as a measurement of a housing market can be tricky, because the figure is not always a realistic look at what you can get for your money.
An average sales price can include trailers, condominiums, town houses, single-family houses, estate houses and farms. Just a handful of $1 million homes in a market can skew the average high, or a handful of low-priced houses can skew it the other way. Averages can sometimes leave such a misconstrued number that the National Association of Realtors uses a median sales price instead.
"Median prices are more typical of the market," said Molony.
Today, there's a greater percentage of distressed sales on the market than only a few months before, so it's not always an apples-to-apples comparison.
NAR's median price for the Baltimore region came in at $280,500 for the second quarter of 2008. This compares to a median price of $293,700 in the same quarter one year before, down only about 4.5 percent.
Nationally, the median price for existing homes was $203,100 in September, down 9.5 percent from $224,400 only one month before.
