The Anchorage Daily News says that Alaska’s Housing Prices dropped the fastest in a year. They were quoting the Arkansas Democrat Gazette, reporting on the Office of Federal Housing Enterprise Oversight.
A misunderstanding of how to use statistics led to the erroneous headline. While it is true that the average sales price dropped significantly in Alaska this year, it is not true that the value of the average house dropped much…if any.
What is going on is that people are buying the less expensive homes. The lower priced homes are selling at a higher rate than the higher price homes. That is bound to put downward pressure on those higher priced homes, but we aren’t able to show that they have dropped significantly in value…yet. If this situation continues we will have to see the values actually drop.
What is true is that many sellers have an inflated idea of the value of their home. Many times they look at the borough assessed value and assume that thier value is 20% higher than that. The truth is that the borough is often higher than the true value. That fact can come as a shock. We are currently seeing many houses sell for less than the borough assessed value.
It is important to have an objective assessment of the value of the home so that you know where you stand when you go to sell.
August 4th, 2008 at 9:05 am
Marty:
You are right—-articles such as these are misleading, but, they are all we have. Unless you can compare the purchase price of a property with its subsequent sale price, there are a bunch of variables—different location, quality, etc.. Comparing the purchase/subsequent sale prices of the places that are selling may give an indication of things to come….If (when) the higher-priced properties start to move–presumably at lower prices.
Don