How 2 Positives Make a Negative
Your front page box headlined “Biggest Home Price Drops” (Jan. 18) lists Encino as third worst at -5.0%. But your table on K5 lists Encino’s two ZIP Codes as rising from $134,000 to $136,000 and from $387,250 to $420,000.
A mistake like this damages real estate values and deserves a prominent correction.
I. NELSON ROSE
Encino
Editor’s note: It was not a mistake, and here’s Acxion/DataQuick analyst John Karevoll’s explanation of this seeming contradiction:
“As counter-intuitive as it may seem, prices can indeed go up in two or more ZIP Codes, yet go down in the combined area. Here’s how, using the Encino example:
“The ZIP Code with lower home prices accounted for a larger portion of overall sales in Encino, pulling the overall median home price down.
“The opposite can happen too, where individual ZIP Codes all show price decreases, yet the combined area shows an increase.
“The real estate industry uses statistical valuation models that take this into account, but they are technical and don’t lend themselves to newspaper use.”
Letters must include the writer’s name, address and daytime telephone number and should be sent to the Real Estate Editor, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or faxed to Real Estate Editor at (213) 237-4712, or e-mailed to Real.Estate@LATimes.com. Letters may be edited for reasons of space and clarity.
