August 1, 2002
On July 25 you published an article, “Real estate sales sizzle,” by Brent Gardner-Smith. As a real estate broker in Aspen who has long been interested in statistics, I would like to share a few facts with you.
It is only recently that I have realized that the value of quoting dollar volume, average prices, comparisons to last year, etc., is primarily useful in cocktail conversation and with those who entertain hyperbole.
Statistics are not often what they seem in Aspen. In the case of the numbers provided by the Aspen Multiple Listing Service (any multiple listing service for that matter), they are, at best, a general gauge of market activity, and are by no means accurate.
The sales of “houses,” for example, frequently report trailers, tear-down properties that are really lot sales and expensive townhomes. In fact, it is not uncommon for a townhome to be listed three ways: “house,” “condominium,” and “duplex” when only one property is sold.
This obviously skews the accuracy of the numbers when “three” sales are reported, though the trends typically hold.
Furthermore, with fractional-fee sales becoming more common, each 1/7, 1/8, or 1/12 share is reported as a “sale.” Depending on the year, this can substantially affect the “number” of sales.
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Keep in mind that in this very expensive market, “average price” really means nothing. “Median price” means little. With 50 percent of Aspen’s homes listed above $4 million, a sale or two at $10 million (or how about $22 million?) will sway the numbers greatly.
The average price of a condominium reported may approach $1.4 million, but there is an excellent selection of available at one-half that price.
Real estate agents here will tell you that they are seldom asked by a buyer or seller, “What is the average price?” More to the point, they want to know, “What is available and what is selling of properties similar to their area of interest?” And, “What do we think the future has in store?” These are the important questions. Perhaps an article with the answers is called for.
Philip L. Miller