Current Trends Help Determine When to Sell

Q: DEAR BOB: My wife and I are considering selling our home. We have noticed that the median sales price of houses where we live has declined about 3 percent in the past 12 months. However, before that, home prices were going up 5 to 11 percent annually. We would hate to lose our equity by not selling now. But then she brought up the question of where we could move, as we are not yet ready for the "old folks' home." How important are these sales statistics? -- Gabe R.

A: DEAR GABE: Sales statistics can be very misleading. Median price means an equal number of homes sold above and below that amount.

Equally important, don't confuse median sales price with average sales price. Average sales price means the total sales prices of all homes sold during a time period divided by the number of sales.

Lastly, when you hear that home sales are down, be sure to check what that means. Are sales prices down? Compared with what? Or is the volume of home sales down? Compared with sales volume last month or a year ago?

And such numbers are meaningless unless they apply to your neighborhood. It is easy for the average sales price for a city to be skewed by a few very expensive or very inexpensive home sales.

Luxury-home sales price figures tend to fluctuate wildly because there are few sales in that price range.

Also, you need to know who supplied the numbers. Do they reflect just the sales of houses listed in the local multiple listing service? Or do they include all local home sales, including FSBO (for sale by owner), in which no real estate agents were involved?

In other words, be sure you are comparing apples to apples. That means you need to know recent home sales (not asking price) trends for comparable houses. Don't consider houses more than a mile away from your home unless there are no closer comparable sales.

DEAR BOB: I bought into a deed-restricted gated community. But the homeowners association won't fix the gates or enforce the covenants, conditions and restrictions (CC&Rs). What are my options? -- Mary S.

DEAR MARY: One alternative, of course, is to sell your home and move to an area you like better. However, if you like the community, selling your home should be a last choice.

The easiest solution is for you and other like-minded neighbors to become involved with the homeowners association. Volunteer to be on a committee, perhaps buildings and grounds or long-range planning. At the meetings, politely suggest better maintenance and enforcement of the CC&Rs.

If that doesn't work, get together with your neighbors to run a new slate of board candidates at the next election. If elected, the new directors can then see that the premises are maintained properly and the CC&Rs are enforced.