How Changes in the Market Have Affected Home Values in Berea, OH

This will be fun for those number crunching types!

Berea Median Sale Price

Berea Home Values - Interactive chart

According to Zillow, the median sale price for a single family home in Berea, OH is $120, 000.  Median, being the middle value, meaning half the homes sold above and half sold below this number, seems a safe way to show what is happening in an area.  

First I confess that I am not really sure where Zillow gets its figures.  As I look at the chart, the period of greatest decline in the median sales price is listed from December 1, 2008 to July 1, 2009.  Just prior to that we saw a robust increase in median sales price from October 1, 2008 to December 1, 2008.  Zillow shows this jump going from $134,000 on October 1st to $159,000 on December 1st.   

I searched out all closed sales in the MLS from October 1, 2008 – December 1, 2008.  During this period, 31 home sales had closed in Berea, ranging from $30,000 to $250,000.  The average sales price was $101,261 and the median sales price was $98,900. 

Now I realize that this number does not represent all closed sales, as there are some that closed without the MLS, but since this number represents approximately 98% of all closed sales for that period, I am fairly confident that the additional 2% that closed outside the MLS would not skew the numbers enough to matter.  I have concluded that Zillow must be working with some sort of rolling average that I don't have the patience to calculate.  ;)

So, instead, I worked up my own little hybrid study.  I went back to 2005 to find a period of growth or stability and tracked what has happened in Berea from that point as well as the changes, year over year.  Not really a fancy rolling average kind of thing, but good info, if you ask me.  So here are the MLS stats for all single family residential properties (excluding condos) sold:

May 2005 Snapshot-Cuyahoga County:

12,357 Active/Pending Homes on the market

              1,365 Closed Sales

Berea Statistics from June 11, 2004-2005:  Y/Y Change               

Properties sold: 186                                          -3%

Average Sales Price: $138,342                         +3%

Median Sales Price: $130,000                          +2%

Low: $62,500

High: $745,000

May 2006 Snapshot-Cuyahoga County:

12,389 Active/Pending Homes on the market

              1,307 Closed Sales

Berea Statistics from June 11, 2005-2006:  Y/Y Change          2005/2006

Properties sold: 225                                          +21%                          +21% 

Average Sales Price: $137,582                         -1%                             -1%

Median Sales Price: $132,500                          +2%                            +2%

Low: $55,000

High: $310,800

                       

May 2007 Snapshot-Cuyahoga County:

12,158 Active/Pending Homes on the market

              1,230 Closed Sales

Berea Statistics from June 11, 2006-2007:  Y/Y Change          2005/2007

Properties sold: 203                                          -10%                           +9%

Average Sales Price: $132,904                         -3%                             -4%

Median Sales Price: $131,500                          -1%                             +2%

Low: $45,100

High: $357,833

May 2008 Snapshot-Cuyahoga County:

12,133 Active/Pending Homes on the market

              1,102 Closed Sales

Berea Statistics from June 11, 2007-2008:  Y/Y Change          2005/2008

Properties sold: 176                                          -13%                           -5%

Average Sales Price: $122,813                         -8%                             -11%

Median Sales Price: $125,000                          -5%                             -4%

Low: $8,500

High: $660,000

May 2009 Snapshot-Cuyahoga County:

12,268 Active/Pending Homes on the market

                 996 Closed Sales

Berea Statistics from June 11, 2008-2009:  Y/Y Change          2005/2009

Properties sold: 155                                          -12%                           -17%

Average Sales Price: $104,967                         -15%                           -24%

Median Sales Price: $100,000                          -20%                           -23%

Low: $30,000

High: $250,000

May 2010 Snapshot-Cuyahoga County:

12,576 Active/Pending Homes on the market

              1,066 Closed Sales

Berea Statistics from June 11, 2009-2010:  Y/Y Change          2005/2010

Properties sold: 203                                          +31%                          +9%

Average Sales Price: $114,559                         +9%                            -17%

Median Sales Price: $115,000                          +15%                          -12%

Low: $9,500

High: $290,000

May 2011 Snapshot-Cuyahoga County:

11,821 Active/Pending Homes on the market

                 871 Closed Sales

Berea Statistics from June 11, 2010-2011:  Y/Y Change          2005/2011

Properties sold: 143                                          -30%                           -23%

Average Sales Price: $104,480                         -9%                             -24%

Median Sales Price: $109,000                          -5%                             -16%

Low: $5,000

High: $275,000

Once again, according to Zillow, our current median sales price is $120,000.  While I like that figure better than the one the MLS provides, I am skeptical, based on the information available.  Moreover, I am a bit disappointed, at this moment, in this last 12 month period.  Until recently, Berea has enjoyed a relatively low negative impact, considering the market, on its home values.  We saw some nice gains from 2009-2010 that were almost completely wiped out from 2010-2011. 

On a positive note, however, I am confident, based on having seen much recent activity in the market, that we will see another rebound in the 2011-2012 numbers.  As I write this there are 29 homes in Berea under contract and waiting to close.  The asking prices range between $45,000 and $197,990.  Even if 10% of the deals die and another 10% don’t close within the next 30 days, we are still looking at 24 homes sold in this upcoming month.  Only 179 more to go (16 +/- per month) to match 2010, which is totally do-able.  Go Berea!!

While tools like those found on Zillow and other real estate sites can provide some general information about a market area, consider contacting your Realtor® for an up-to-date evaluation of how the current market has affected your home’s value.  Most don’t charge for this service and we are happy to keep our customers, friends and family informed about the value of their investment. 

Lost Equity? Maybe not.

The most frequent thing I hear from people who want to move is that they are afraid if they sell their home before the market returns they will lose money.  They want to wait until their equity position returns to what it once was.  Let me explain how this is a false view.

While it is true, we have all lost in home values over recent years, recovery doesn't necessarily need to take place in the home in which you are currently residing.  If you have enough equity in your home to sell and at least break even, now is a great time to take advantage of the buyer's market we are in to purchase a bigger or nicer home than you currently own, which is often more than what the previous market would allow you to afford, and wait for the market to recover there.

As an example, my husband and I just bought a house.  We sold our old house for about $6,000 to $10,000 less than what it would have gone for before the market turned.  While we did have to bring about $2,000 to the closing table, we really didn't feel too badly about it.  We had refinanced some debt into the second mortgage and, for several years, were writing off interest on debt we otherwise would not have been able to write off.  I looked at it as having to pay off a credit card to qualify for a new home.  No big deal if you can afford it.

We bought the new house for about $20,000 less than what we would have paid for it six years ago.  When the market recovers, we will see an increase in the new property value just the same as we would have if we would have waited for the market to return at the old house.  But because we bought now, we were able to purchase a home that we would not have been otherwise able to afford, moved to a better neighborhood, improved the quality of our lives and are no longer tripping over our dogs.

Yes, property values are lower than they have ever been.  Take advantage of this and improve your living circumstances.  Waiting for the market to return just may put your dream home out of reach.