To complicate further the problem of measuring home prices, we analyze the characteristics (including price) of new homes sold in California.
Because we measure new-home prices, our prices differ from resale prices. In large part this difference is due to new-home prices being more influenced by the pattern of development. In 1988, the lower-priced, faster-growing areas of the state increased significantly. This caused the statewide increase in new-home prices to be more modest (6.8%) than the increase in resale price (+18.4% for detached, +9.3% for condos).
Bartolotto is research director for Construction Industry Research Board.
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