Seems like a million years since I brought you guys a cool real estate tool. So this week when I saw that the National Association of Realtors has made a pretty neato interactive Google map of median home prices in major metro areas around the United States, I thought, wow, that’s worth sharing.

Of course, the first thing you’ll want to look at is Knoxville. According to this map, the median sales price for the second quarter of 2008 was $153,600, down 4.1% from the first quarter.

But as great as this tool is to check in on the Knoxville market from quarter to quarter, the real fun is looking at other cities, from the good -

Des Moine, IA - second quarter median home price of $156,000, up 6% up from first quarter

to the bad -

San Francisco-Oakland-Fremont, CA - $684,900, down 19.1% from first quarter.

to the downright ugly -

Cape Coral-Fort Myers, FL - $178,100, down 33.1% from first quarter. Of this year. Yikes!

So have fun clicking around, but keep in mind it’s a lot easier to navigate if you zoom in on an area. Those little houses tend to pile up on each other. Enjoy!

It’s that special time of the month again. The time when we pause to reflect on the previous month’s real estate activity. My people call it Home Sales Report time. August Home Sales Report, to be exact.

August seems like a million years ago now, what with all the craziness that the financial markets have seen so far this month, but it was just a few short weeks ago that Fannie and Freddie were not government controlled entities, Merrill Lynch was not Bank of America and Lehman Brothers was not totally screwed.

But I’m getting ahead of myself. We’ll get to deal with the fallout of all of that fun stuff in the September Home Sales Report. Right now it’s time for the August Home Sales Report breakdown just the way you like it — All Around K-Town style.

I think we could all use the good news first:

Average sales price for 2 or less BR homes is up.
August ‘07 - $95,500
August ‘08 - $98,100

Median sales price for 2 or less BR homes is up.
August ‘07 - $80,000
August ‘08 - $85,000

And yeah, that’s about it for the good news. Now for the not so good news:

I’ve been working with a lot of buyers lately, and - in addition to causing me to neglect this here blog - it’s made me think a lot about price expectations. More often than not, buyers tend to have somewhat unrealistic expectations of how much home they can get for a certain amount of money. This is especially true with people coming in from out of town who have heard stories of being able to get a brand new, 2000+ sq ft home in West Knoxville - possibly on the lake! - for just $150,000.  Um, yeah. Not.  It usually takes driving around for a few days and looking at some real dogs to convince them that this is not, in fact, the case.

So, in order to try to save myself some gas and also because I love digging in the MLS at the end of a long, hard week, I’ve decided to do a semi-regular series exploring what kinds of homes you can get in different areas of town for various price ranges. My plan is to start low - way low - and work my way up to the Cool Homes You Can’t Afford range. Sound like fun? Then let’s begin!

Our first price range is $0 - $50,000.Yes, there are single family residences listed in Knox County for less than $50,000 - 97 as of today, in fact. But as you might expect in this price range, a lot of them are foreclosures, most of them are small, some of them are in need of repairs, and almost none of them are in West Knoxville.

Here are some examples of  what you can get in this price range in North, South, East, and West Knox County:

North

3 BR, 1 BA, 900+ sq ft foreclosure in Fountain City ($34,900)

3 BR, 1 BA, 1000+ sq ft foreclosure on Cecil Ave. ($39,900)

1 BR, 1 BA, 600+ sq ft remodeled cottage on Gillespie ($42,900)

2 BR, 1 BA, 700+ sq ft foreclosure on Cecil Ave. ($49,500)

South

2 BR, 1 BA, 700+ sq ft fixer upper off of Cherokee Trail ($25,000)

2 BR, 1 BA, 800+ sq ft foreclosure off Sevier Ave. ($37,525)

3 BR, 1 BA, 1000+ sq ft fixer upper on Young Ave. ($40,000)

3 BR, 1 BA, 800+ sq ft off of Young Ave. ($50,000)

East

2 BR, 1 BA, 1300+ sq ft foreclosure in Morningside ($19,900)

3 BR, 1 BA, 1100+ sq ft off of Rutledge Pike ($34,900)

2 BR, 1 BA, 700+ sq ft in Sunset Park ($41,500)

2 BR, 1 BA, 800+ sq ft on Old Rutledge Pike ($49,980)

West

3 BR, 1 BA, 800+ sq ft fixer upper in Karns ($44,500)

That’s all for this price range. I’ll be looking at the next price range soon - just after I go back out and show about another 100 houses. Stay tuned!

Get ready to get confused.

I was just over at Property Scope and saw this alarming headline-

“Knox Home Prices Fall In January”

Yes, the Knoxville Area Association of Realtors sales data for Jan. ‘08 is out - let the number crunching begin! Let’s read what else Property Scope had to say-

“The median sale price of Knoxville-area homes fell in January.
According to the Knoxville Area Association of Realtors, the median sale price of a two-bedroom home was $66,000 last month, a drop of more than 12 percent compared to the January, 2007, median of $75,700.
Larger homes were off less dramatically. The median price for a three-bedroom was $144,000, down $1,000 compared to a year ago, while the median price for a home with four or more bedrooms was $218,000, also down $1,000.”

That all sounds terrible, especially the 12 % in 2 BR homes. What makes me want to tear my hair out is that this article, especially the headline, makes it sound like home values have dropped, when the author is actually talking about a drop in median home prices.

So what’s the difference?

A median home price is the halfway point between the most and least expensive homes sold in an area in a given period of time. It is not an average of home sales prices and it is not an indicator of home value, per se. If more people are buying more expensive homes in an area, the median home price rises, just as if more people are buying less expensive homes, the median home price drops. This does not necessarily mean the value of the homes they bought increased or decreased.

What the KAAR median home sales data tells us, is that more less expensive homes sold in Jan. ‘07 than in Jan. ‘08.

But the KAAR data also includes average or mean homes sales data. Average home price is calculated by adding all of the sales prices for a type of home together and dividing them by the number of properties sold.

OK, now, let’s take a look at average or mean. home sales price in the KAAR data, just for laughs & giggles-

• Average sales price of a 2 BR home was down 7%
• Average sales price of a 3 BR home was down about .03%
• Average sales price of a 4+BR home was up about .05%

So, according to the mean or average sales data, one of these categories actually rose. This could be because property values went up. It could also be for the same reason that some folks don’t trust mean sales figures - the most expensive homes tend to skew the data upward (the same can be said for foreclosure or distressed property sales, which skew data downward).

I told you it was going to be confusing.

What is clear is that the Knoxville house market has slowed, at least compared to Jan ‘07. Days on market is up and there is more inventory. However, as I wrote about last week, the condo market is chugging right along, doing extremely well in spite of all this.

As for your own home, don’t lose hope yet. Real estate pricing is a tricky business. Your home’s market value depends on many factors — desirability of your neighborhood, recent neighborhhood sales, updates, general condition, whether or not train tracks were laid in your back yard since you bought it, and, of course, location - not just on KAAR sales data.