Found this interesting graphic. An average price per square foot is not an indication of the value of any one home. Homes vary greatly in their individual pricing. But, on average, if we assume that in the market place over all, month over month and year over year, there are about the same number of homes of all kinds sold in any given month, then the average price per square foot, averaged over the entire market, gives and idea of the trending prices. As the price goes up or down, consumer sentiment about the value of homes rises and falls proportionally. If the general rise in the price per square foot is up on average 2% over the course of a quarter, then any given home is probably worth about 2% over the same time period.
So, take a look at this graph and you will something quite interesting, and perhaps unexpected if you do not follow home prices closely. In the late summer of last year home prices slowly rose till they reached their highest level of the year in September. Then the market suddenly declined in October, and remained stuck in that range until May of this year when prices suddenly broke out of the range with a sudden leap higher. In July of this year prices backed off a little. August number are not in yet, but the indications is we have seen the high water mark for the year and prices will decline back into the range that was establish last year or the rest of this year.
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