Full year 2008 real estate sales data should be available any day now ..

so I can provide an update on how second half 2008 sales went to go along with the first half Garrett County real estate data I gave in the middle of last year. Then we will see if there really were "plenty of buyers" as a local real estate agent suggested in May 2008. Stay tuned.

Updated 1/15/09: I guess Mike Kennedy saw my post this morning and decided to give his own update which you can see over at the Railey Realty Blog. Mike shows that the number of properties sold and the total dollar volume of sales in the immediate Deep Creek market in 2008 were both less than half of what they were in 2005. He also shows that the average selling price (neglecting any seller incentives for closing costs, etc.) of the properties sold last year was greater than the year before and then concluded that this means values are still rising. I suppose if next year only the 75 most expensive properties sold but at a significant discount to this year he would also conclude values are still rising. Afterall, the average selling price would be higher. Or if the average house sold in 2009 doubled in size and only sold for 10% more than the average selling price from 2008 by the logic he has laid out he would again conclude that vales are still rising.

Don't be fooled by bad statistics and slight of hand in interchanging price and value. Price is what you pay, value is what you get. It is actually possible values are rising, as they generally do with time, but it is just as possible the prices people have paid in 2006 and 2007 and even 2008 are significantly greater than the true value of the underlying assets. So prices can fall even while values rise believe it or not. As it turns out average selling price is just a really bad valuation metric. Don't believe me? Ask someone who bought stock in a tech company in early 2000 when people like Mike Kennedy said they were worth (valued at) whatever price someone would pay for them. Just because those companies were selling at astronomically high prices didn't mean their values based on metrics such as future cash flow were keeping pace (as we all found out).

Looking at apples to apples comparisons of individual properties sold in 2005 and 2006 to the same properties resold in 2008 I'm having a hard time finding any that are selling for more now than they did 2-3 years ago. As I have said before, I believe for average selling prices that Mike is reporting to keep rising he has to rely on bigger new construction sales (or a different weighting of the mix of sales) to skew his data. He has shown nothing to convince me or anyone else otherwise.

I wonder if Mike honestly thinks that he sold the Cedar Creek townhouse for more in 2008 than he could have in 2006? I have my doubts. Agents are discounting their own properties and in some cases selling at a loss yet they say values are rising. If so they must be the dumbest people on the planet for lowering their prices or selling for less than they previously paid. Or, like me, they understand that prices got far ahead of values.

Don't forget to check back to Dan's Deep Creek Blog for future updates.