Did home prices really fall 10% last year? Episode #194

Hello! Welcome to Todd Miller TV. I wanted to give a quick update on the recent new that Las Vegas had lost 10% of it’s market value last year. And I wanna cabby out that this is historic information. It’s what happened in the past. Not necessarily showing what may happen in the future. But, most important thing is that, is to understand what the number means. So, what they went by was median home values. So I’ll give you an example of what a median is. If 3 houses sell in the neighborhood, one for 90, one for 100, and one for 110. The median values is 100 in that neighborhood because that was the middle sale. So let’s say that next year, all those houses sell for $5,000 more. So the 90 sold for 95, the 100 sold for 105, and the 110 sold for 115. The Layman, and anyone look at that ’cause the prices were worth more. So the homes are worth more, prices went up, values increased, right? But let’s say statistically that, or let’s say that 2 smaller houses for some reason that hadn’t sold a year before, sold. And they sold for 80,000 each. Well, now the median number that neighborhood’s not the 95. Because it was the bottom but 2 ones come in below it. So, instead of looking at the 105 they’re looking at the 95 as the Median. So they would report that the median dropped 5% and home prices are off 5%. But the people that sold the house are gonna say ” Wait, I made money on my house.” So sales next to the types of homes being sold are gonna count in to that.Now the other things that’s counting in is “What if you flip a house for 60,000. You bought it for 60 as an REO, you fixed it up and sold it for 80.” That’s 2 sales for the same house. So what’s gonna happen is it’s gonna pull down the average ’cause you’re throwing in 2 low sales into the mix. Million dollar houses aren’t being flipped like 60, 70, 80, you know, homes under a hundred thousand are being flipped. So, there’s gonna be a lot of/the numbers aren’t gonna be true. So the value of Real Estate Las Vegas did not fall 10%. What fell statistically was the median because because of the churn of the low end properties. So, I just want to give you good information so you would know what you’re getting into if you’re buying in to Las Vegas or just understand what’s going on in Las Vegas. So, anyway I thought I would share that with you. That is my update and hope to see you on another video.. Thanks a lot…