I recently received an email from Christoper Hain of Terra Firma L.A., which caused me to view the chart below. Often people try to take general median percentages and apply them in the wrong place.
The current median 12 month change in King County is down 12%. But if you get a house for 12% less where it is down 30%, that’s not a great buy. If you get a house for 12% less where it is only down 7%, that’s a good (not great) buy.
Chris’ article drives home the point that in one agent’s “service area”, which is not really very big, there are areas down 7% vs. 42%…HUGE SPREAD!!!
Plus he asks the question that is not discussed often enough:
“You could read either end of this chart in completely opposite ways. Perhaps, the ones that have fallen furthest are the ones you want to buy in 2009. Or perhaps, the ones that have held their value best are the ones to bet on long-term.”
I’ll be doing some neighborhood breakdowns for Seattle and Eastside today, and finding our highs and lows in my service areas. I’ll post a graph similar to the one for L.A. below, as related to our immediate area.
Look at Beverly Hills, as example. Even in that small area (which due to the TV show most think of as 90210) there is a variance in % down for the three different Beverly Hills Zip Codes of 90210, 90211 and 90212. Big difference between 24% down and 42% down…in one small area.
I’m going to try to do the neighborhoods accurately, vs. Zip Code. i.e. Wallingford, Green Lake, East of Market, West of Market, etc… I have to use a polygon search feature for that. It’s time consuming, but given this is still “the holidays”, now would be a good time for me to expend the excess effort, and the results will be of value in tracking changes during 2009.
7% down to 42% down…it boggle’s the mind. Here’s Chris’ chart: