In reviewing the AZ Republic’s home sales this week, the four principal zip codes in Gilbert, AZ were considered. Total sales, 94 properties, was down from last week’s 144– the decrease is not encouraging. Then the "rosy" news– while the median home price dropped in 85233, it was up in 85234, 85296, and 85297. The median home price this week in 85234 was $529,900– that’s up 30% from the past four weeks average of $370,500. Median prices are skyrocketing(!), right?
Wrong–we need to look again. (This weeks numbers are not available online until next week) Sales activity is slow in 85234– so this median price is an average of only 13 houses. Four of the homes that sold went for $900K plus– hardly good news for the average home owner– and although there are some expensive custom areas in 85234, these are not typical properties for this zip either.
Ron Wilczek, a local realtor, made the following comment on Realty Times:
The price per-sq ft for a home sold in June was the lowest this year and marked 3 consecutive months that figure dropped. That may account for the 13% increase in sales from May to June as the inventory rose another 10%. May’s and June’s homes were among the largest sq ft sold in Gilbert in several months. Therefore, there was no gain in actual prices when considering price per-sq-ft.
While median home prices can be a useful indicator of a price trend, it cannot be used as a stand alone evaluation of the market. When you are told "Prices are still going up!- Look at the median price!"- go ahead and look, but don’t forget to look at inventory, sales, sq. ft. price, etc. as well.