Market Insight, Random Thoughts, Statistics

If All Real Estate Is Local, Who Cares About Averages

August 4, 2010 by · Leave a Comment 

All real estate is local! If you’ve heard it once, you have most likely heard it a thousand times. How could you not hear this old cliche when working with real estate and mortgage professionals.

The May 2010 Public Awareness Campaign from the National Association of REALTORS® even states:

“Every market’s different, call a REALTOR® today.” – What Matters Most

If this is true, why is all the focus on averages? Why should you, for instance, care about averages?

Here is a sample chart to illustrate average days on market for single family homes in Schererville Indiana.

From this chart, it appears that the Schererville Indiana real estate market is improving as the average days on market is nearing 180 days which is an indication of a balanced market. Be mindful that this is the average days on market for the entire spectrum of single family homes for sale in Schererville Indiana.

Wait a minute. Your home is not like everyone else’s home and the home you want to buy is so much nicer than other homes on the market. Let’s break the average days on market down to quartiles based on list price. The chart on the left below represents the top 25% of homes for sale in Schererville Indiana. The chart on the right below represent the bottom 25% of homes for sale in Schererville Indiana.

        

 

Do you notice anything different? Do you notice anything that is similar?

If  you recall, the average days on market for the entire spectrum of single family homes for sale was nearing 180 days. For the homes listed in the top quartile, most expensive, the average days on market is 40% longer. For the homes listed in the bottom quartile, least expensive, the average days on market is 15% less.

Depending on what price point you are looking to buy a home or sell a home, knowing the specific real estate trends and statistics to that real estate market would be critical to your decision making process. So back to the question…why should you care about averages?

Regardless of which graph you look at above, the real estate trend for average days on market in Schererville Indiana is definitely improving. Averages help illustrate trends and consequently helps manage expectations.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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