Has real estate appreciated 12%?

The average price of homes sold in the County in 2015 increased 12% over the year before. This would appear to be bad news for buyers, but it would be misleading to conclude that properties have increased in value by that amount.

Product Mix 2015.jpg

A large part of the increase in the average price was due to a change in the product mix of homes sold, with fewer lower-priced homes under $300,000 and more in the mid and upper price ranges.

By analogy, if a General Motors dealership had a month when they sold more Cadillacs and fewer Cheys, the average price of the cars sold would go up, even though the price of Cadillacs and Chevys was unchanged.