Saturday, February 24, 2007

San Diego company revises its formula

By Roger Showley

February 15, 2007

DataQuick Information Systems, the San Diego company that collects information on home sales in nearly all markets across the country, has adjusted the way it computes its widely watched reports on median home prices.

The result will be revised calculations for housing prices and sales volume in all markets surveyed by DataQuick – including San Diego – going back to 1988, said DataQuick analyst John Karevoll.

Karevoll said the revisions should not greatly change previously reported price figures, which are closely followed by the real estate industry, as well as by homeowners, and are published in many newspapers. The changes will be less noticeable for prices that have been reported for individual ZIP codes.

Starting with January's DataQuick reports – released yesterday for Southern California – the new methodology will capture about 10 percent more transactions than previously reported.
The firm previously computed median prices for states, regions and counties based on a weighted average of medians first calculated for each ZIP code within the category.
Under the new system, the overall median for each geographic area will be calculated from all transactions within each group and not derived from a median price established for each ZIP code.

“For commercial uses we've been doing this methodology for three or four years,” Karevoll said. “What we'd like to do is get numbers put out in the public domain that are in sync with what we sell to banks.”

Going back to 1988, the change is relatively slight, with some areas a little higher than previously reported and others a little lower. Individual ZIP code prices remain unchanged unless additional transactions with known prices have been added since the initial reports.
In San Diego County, last year's overall median originally was reported at $490,000, down from $494,000 in 2005. The new calculations placed both figures at $500,000, meaning there was no change between the two years.

With the new methodology, last year still marked the first time since 1995 that there was not been a year-over-year increase in prices locally.

For single-family resale houses, which make up about half of all transactions, the original median reported $549,000 for 2005 and $554,000 for 2006. The revised numbers are $555,000 for both years.

The condominium resale medians in 2005 and 2006 originally were set at $392,000 and $390,000, respectively. In the new calculation only the 2005 figure changed, to $395,000.
The median for new homes – houses, condos and condo conversions – originally was set at $476,000 in 2005 and $444,000 in 2006. The revised figures were adjusted down to $473,5000 and $439,500, respectively.

Karevoll said there continues to be a gap in information reported at the ZIP code level.
Now the number of sales reported by the firm reflects all transactions, whether the price is known or not. The median price is necessarily based only on the properties for which there is a known price. The median is the midway point among all sales, with half above and half below that level. In a few cases, the location of the home also is not known by DataQuick, so the ZIP code of the mailing address for the property tax bill is assumed to be the site of the home.
If a transaction involves more than one home, Karevoll said each home will be counted separately. Transfers of homes in intrafamily transactions and apartment sales will continue to be excluded.

To illustrate one effect of the revision, the company had reported under the old system that housing sales in 2006 for San Diego County amounted to 42,122. Using the new method, the figure was revised to 44,580.

DataQuick says its sales information represents about 90 percent of the dollar volume of all real estate activity nationally and 95 percent of all activity in metropolitan areas like San Diego.


Desperate times call for desperate measures. Looks like they may buy themselves a few more months before the year-over-year go negative. What a scam...................

Carlsbad owners feeling the heat

I think its time to buy right? Wrong! With tighter lending standards California homeprices will come down in 2007 by at least 20%.