You may hear statistical data that average home sale prices went up in the last two months. Certainly encouraging news to sellers! However, for the last year, average sales prices have been inconsistent from month to month with no real pattern -- going up for a month or two and down for two or three months. The more reliable way to determine the market value of a home is detailed below and involves finding accurate comparable home sales in your area.
With home prices, the trouble with "average" is it does not give homeowners an accurate picture of the market in their area. Average home prices are calculated by dividing the number homes sold during a fixed period into the total of all sales prices. If lower end homes are selling more than higher prices ones, the average would go down, but if higher priced homes are more popular, the average would go up. Another measure of home prices is the "median" price where half of all homes sold for less and half for more. As with "average", the "median" statistic does not give homeowners any idea of the how much the market value of homes has declined or appreciated in their area.
The better method of determining the percentage fluctuations of market prices is to compare similar homes in a specific area over a fixed time period. For example, if you wanted to know the percentage drop in prices from 2006 to today, research the 2006 sales price of 3-4 homes compared to the recent sales prices of 3-4 similar homes in the same area. The overall comparison will give a fairly accurate percentage drop of home prices in that area. Then when homeowners remember what neighbors' houses sold for in 2006, they can apply that percentage reduction to get an idea of the perception buyers have of value in today's market.
The statistical data provided here by county shows the status of the supply of inventory which gives us a trend for the future. In some counties, the supply is coming down which, if it continues, would signal a coming market change. In other counties, inventory is still rising causing the continued downward pressure on prices. Since we cannot rely on "average or median" sales prices to see the future, in addition to these graphs, I would be happy to do the research to analyze the percentage change of home prices in your area and provide a Comparative Market Analysis (CMA).