I am a bit late for Market Monday, but better late than never as we say.
So looking at Santa Clara home prices over the last two years.
Why I like Median over Average? Median gives me a more accurate assessment of what the value is for a typical Santa Clara home. Where averages I feel are more prone to being skewed by over price or underpriced homes. So right now the Median price home in Santa Clara is about $1.2M. Some people may say that even this data is out dated, but such is the reality with a fast moving market and historical data. But for the sake of comparison lets analyze this for a moment.
Two years ago the median price for a home was just below $943K, which would mean that homes have appreciated 30% in two years.
If we look at median price per Sqft for Santa Clara homes for the same period we get only 20%, so which one is more accurate.
Both metrics rely on data and depending on that data the results will be affected. If you are analyzing just the median price the data may be skewed by a large number of high priced listing for a given month or lower priced listings, which typically happen towards the end of the year when many homes that are outdated are sold. You will generally see pricing graphs dip at the end of the year, prices are not going down, just the homes being sold at that time of the year are not as high quality relative to the Spring or Summer.
Median price per Sqft can be skewed by larger homes which typically have a lower price per square foot than smaller homes. So if many larger homes close in a given month it may lower the price per Sqft of homes for the month. Of course, the important thing is not to get to bogged down with the specifics but look at the trends. As the market appreciates the trend will be up, the steeper the slope of it trending the higher the rate of appreciation.
Based on the trends can see that in 2017 we have a much higher and aggressive rate of appreciation than 2016. This coincides with the inventory levels that we have seen for 2017 vs. 2016. So remember when considering the market, home inventory is the best gauge for strength. (see the recent post on Market Active Index https://www.santaclararealestateguy.com/market-monday)
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