In my blog of yesterday I stated that foreclosures were not impacting values in Richardson.
This morning I opened up the business section of the Dallas Morning News to find the headline FORECLOSURE SALES DRAG PRICES DOWN. The first paragraph of the article said" An increase in foreclosure sales helped pull down Dallas-Fort Worth home prices in the first quarter".
If you took the time to read the article your would find deep down on page 5 of the paper "Along with foreclosures, median home prices in the Dallas-Fort Worth area have been pushed lower because of a plunge in the sale of high-end homes."
An example of what they are talking about is:
In April of 2008 there were 3 sales in a City. One sold for $100,000, one for $200,000, and one for $300,000. The average sales price was $200,000. Now let's jump forward to April 2009. We had one house sell for $100,000 and one sell for $200,000. The April 2009 average sales price is $150,000. The average sale price dropped 25%. Did prices really drop or did we just not have a sale at the top end of the market?
Granted this is a very simple example, but it does serve to demonstrate how sometimes statistics can be deceiving and reminds me of a quotation I believe came from Mark Twain " There are lies, damn lies, and then there are statistics."
Too many people get caught up in the headlines, don't read the whole story, and think it's about the local market when the story is really talking about what is happening in California, Arizona, Nevada, and Florida.
Yes, if you are looking in the south part of Dallas County you will find some neighborhoods impacted by foreclosures but, in general, not in North Dallas, Richardson, or Plano. What is impacting sales is the belief by buyers that there is this great pool of foreclosures on the market and that homes that are not foreclosures should sell for greatly reduced prices.
