Is Our Market REALLY Declining In Value??
What Does The Average Sales Price Really Mean?
I was speaking with a client over the weekend and he expressed some concern over the state of the market in Rocklin. From one of my posts, he got that I was pointing to a poor market and that we were losing value based on the average sales price statistics given from the TrendVision graphs I use.
While it’s true that this is what it looks like on the surface, a little digging and understanding how this stat is measured reveals that, yes, while it says that the average sales price declined from this January to last January, that isn’t truly reflective of the average sales price for the entire year. The stat, as presented in the MLS, measures a month against a month vs. a year vs. a year.
Oh The Peaks and Valleys!
When looking at the graph, you can see that there are peaks and valleys in the average sales price from month to month. The graph below is from 2014.
What I do to get a better idea of how much values have changed, year over year, is to get an average from the averages. To get a more accurate picture of this, I throw out the high and low average for any given month or months.
In this example, throwing out the low really isn’t relevant as there are several months that are very close to that number. However, throwing out the high value is very relevant as it is out of step with the rest of the averages through the year.
I took out the two months at $472,000 as it was substantially higher than 8 other months of the year. In this case, the average sales price through 2014 was approximately $441,000. 
Then I bring out the graph for 2013 and repeat the process. This graph is a little more clear cut. There is a low of $370,000 and a high of $442,000 both of which are out of step with 9 months of the year.
This breaks down the average sales price over the entire year vs. just one month over the same month last year which doesn’t really give an accurate picture of the average home price over a given period.
In this case, the average home price in 2013 was roughly $404,000 and in 2014 it was $441,000 which figures to be a 9% increase in the average sales price 2013 to 2014 for the 95765 zip code as a whole.
The average sales price gives a loose idea of what is going on in the market in a given area over any period of time. The best way to find out what the value of your home is would be to compare it to homes like yours that have recently sold. Everything else is just nice to know numbers. 
If you’re curious about the value of your home, please contact me here and I’ll be happy to create a report especially for your home and deliver it promptly with no obligation.
For the Rocklin Real Estate Report, click here. For Stanford Ranch, click here. For Sunset West including Cresliegh Springs and Rock Creek, click here. For Whitney Ranch, click here.
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