Ho-hum: regional average home sales price up 12% (Pittsburgh, Lebanon: to rent, condo)

[pman]

it's an increase in the average sales price rather than a 12% increase in existing home value. the sale price is influenced by the types of homes, the blurb doesn't give you enough information to know what, exactly, is happening. a larger than usual sale of new homes could influence this. fewer homes selling in "cheap" neighborhoods could also cause this.

[LEFT]The average home sale price in the 13-county region served by West Penn Multi-List increased nearly 12 percent from $171,995 to $192,505 from July 2011 to July 2012.
[LEFT]

: Business news briefs: Region's home price, sales rise 12% from year ago - Pittsburgh Post-Gazette[/LEFT]

[mattejb]

Originally Posted by pman

it's an increase in the average sales price rather than a 12% increase in existing home value. the sale price is influenced by the types of homes, the blurb doesn't give you enough information to know what, exactly, is happening. a larger than usual sale of new homes could influence this. fewer homes selling in "cheap" neighborhoods could also cause this

I was thinking it could also be homes that use to sell "cheap" no longer are, but homes that sold for 200k haven't really seen a price difference. Boats don't all rise equally with the tide?

[robrobrob]

A friend just bought a new house and he was amazed at how prices in Point Breeze have gone through the roof. He also relayed to me that his realtor told him that the prices have gone down in Fox Chapel and the South Side.

[globalburgh]

[wanderlust76]

An increase in the average sale price means just that...it could mean houses in certain areas went up but there are probably areas where house values went down. It doesn't automatically mean your house is worth 12% more no matter what. They could go up on the street next to you but stay the same on yours. Washington County has had a fair amount of development in the past 5 years and nice houses that sell under 200k are everywhere.

[sealie]

Yes. One particular data point, with no context, with no breakdown by neighborhood or price point, without the context of amount of inventory on the market or a large increase in local population, is a blip. That is what I was referring to. I wasn't making any pronouncements about the state of the real estate market, I was saying that the single data point which started this thread is by itself not enough to draw any conclusions off of.

[Hopes]

Originally Posted by wanderlust76

An increase in the average sale price means just that...it could mean houses in certain areas went up but there are probably areas where house values went down. It doesn't automatically mean your house is worth 12% more no matter what. They could go up on the street next to you but stay the same on yours. Washington County has had a lot of development in the past 5 years and nice houses that sell under 200k are everywhere.

I suspect a majority of the increase is in rural counties since the study considers 13 counties in the region. I've been looking at houses in the farther counties, not the immediate surrounding counties. There's not much available and prices are higher than expected. The gas drilling has caused a demand in the rural areas.

[BrianTH]

Originally Posted by Hopes

I wish I could get my husband interested in renovating old houses. He has the skill but no interest whatsoever.

I'll bet there are other people out there like that too.

One of the theoretical positives about robust price increases is it should encourage more such people to come off the sidelines. However, I think the attitude you stated above is typical these days, and quite reasonable: with the national bust still so prominent in people's minds, unusually high appreciation in recent months may cause as much concern as it does incentive.

[pman]

Originally Posted by mattejb

I was thinking it could also be homes that use to sell "cheap" no longer are, but homes that sold for 200k haven't really seen a price difference. Boats don't all rise equally with the tide?

absolutely, in fact, that theory probably fits better given the rise in volume...although a few sales of expensive homes can skew data upward (think $2 millon homes or condos).

[BrianTH]

On the meaning of this statistic:

I agree (as I implicitly did in the OP) that you have to be careful about your assumptions when looking at monthly data like this. As others above have pointed out, it is subject to shifts in housing mix, and it is also subject to variable seasonal affects, policy changes, rate changes, just regular statistical noise, and so on. And, of course, it is correct that you can't impute an average sales price increase to the value of every single home in the region (although in the long run, there should be a convergence between sales price trends and the market values of marketable homes in any given location).

That said, this is not in fact the first such month we have seen lately. June was equally astounding:

Southwestern Pennsylvania Home Prices and Sales Sizzle, Inventory Lags in June -- PITTSBURGH, July 5, 2012 /PRNewswire/ --

In the 13-county region served by the West Penn Multi-List, Inc. the number of residential homes placed under agreement increased 18.56 percent (3,955 homes versus 3,336) in June 2012 versus June 2011, while average home sale price increased 12.97 percent ($194,500 versus $172,177).

That release also looked at the whole first half of the year:

Additionally, for the first six months of 2012 versus the same period in 2011, the West Penn Multi-List, Inc. reports improvements in the number of homes placed under agreement, new listings and average sale price. The number of homes placed under agreement increased 14.99 percent (19,832 homes versus 17,246); new listings increased 1.48 percent (19,972 homes versus 19,681); and average home sale price increased 7.97 percent ($167,083 versus $154,748).

Again, I'm not trying to push a panic button, but this is in fact more than just a one-month blip.