The market statistics we get from the Board of Realtors is broad. It encompasses all properties, not segmented by school district or area, size, or any other factor. The December figures that came out a couple of days ago indicate a 7.3% increase in sales price, but if you do compare to the school district, it is not the same (also one month as opposed to one year). Point is that statistics depend on what is analyzed.
Below is a direct comparison of all sales in the Ann Arbor school district excluding new construction and “to be built”. This information comes from data found in the Ann Arbor Area Board of Realtors MLS and is something you too can pull for your analysis.
(sorry, you have to click the image to enlarge)
• Number of sales declined 1.4%
• Average price increase 4.37% but size declined 0.15%
• Median price increase 3.19% with size increasing 1.55%
• Average price per sqft increased 4.53%
• Median price per sqft increased 1.61%
Inflation rate noted currently at 1.76% between 2019 and 2020. This means that the rate of increase for average price is 2.61% and median 1.43%. If you consider price per square foot, it is similar on the average and a negative number on the median.
This information takes into account all listed houses in the Ann Arbor school district other than “to be built” and new construction. It does not segment by starter market, size, or another variable. Once that is done, data can change dramatically.
For example, if houses are segmented by size and age, differences appear in price changes. For that reason, it is a good idea to not hang your hat on an overall market change, but to consider other factors in whether the market segment in which the property is situated is changing.
I broke out the same information between houses up to 1999 sqft, between 2000 and 2999 sqft, and at and above 3000 sqft built between 1970 and 2000 in the Ann Arbor school district. This is still wide and takes all of these sales into account, but the differences where the market is most active is notable, and there is a difference between median prices and average prices. Choose one and stick with it. For the data trends I run, I stay with median because it takes care of the outliers.
Activity:
• 1999 sqft and below increase in sales 9.68%
• 2000-2999 increase in sales 1.27%
• 3000 and above level from one year to the next
Average price:
• 1999 sqft and below increase 11.50%
• 2000-2999 sqft increase 5.21%
• 3000 sqft and above increase 2.53%
Median price:
• 1999 sqft and below 3.30%
• 2000-2999 sqft increase 4.36%
• 3000 sqft and above increase 6.59%
What happens if the market segment is addressed; say all houses between 2000 and 2999 sqft in area 85, built between 1990 – 2005 (a building boom in that area around that time). A trend line is measured both on the linear and 3rd order polynomial and what it shows is a slight increase in prices over the past few months, and a decline in price per square foot (price increase affected by size increase).
All of this information is the type of analysis appraisers use in trying to measure the market in which the property they are appraising is situated. If an appraisal suggests the market is declining, or increasing (or stable) then the appraiser has gone through some level of analysis to determine what is happening both for the wider market, as well as the segment where the property is competing.
Appraisers analyze the market. They analyze not only the wider market, but the market which is competitive with the subject property. When you are considering hiring someone to handle your valuation needs, interview, and hire someone who will make sense of the complicated market they are working within.