Lake Hartwell Topics: the crowne pointe effect

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	Name:	John C -
	Subject:	the crowne pointe effect
	Date:	3/19/2010 8:26:15 PM

Good question Wix. This is the topic for another blog post that I will write in a week or so. But the short answer is - no, Crowne Point was not the cause of 2009 being such a good year in terms of homes sold or prices dropping.

In 2009, about 35% of all waterfront sales were non single family homes (not only CP, all condos and townhomes) let's call it NSFs. If you look at sales in the 4 years from 1-1-06 to 12-31-09 our market averages about 21% of sales being NSFs.

It would be erroneous to remove CP completely because in a normal year we have about 1/5 of sales as NSFs. So I normalized the sales, that is, I removed about 30 sales from $100k - 299k to get the total sales back to 21%. To my surprise, it did not affect the bell curve of average sales prices at all. In other words, prices still decrease, regardless of the influence of Crowne Pointe condo sales.

Another way to normalize it would have been to spread those sales back to prior years, arguing that they * should * have been sold in 07 and 08, if they would have been completed, and sales were normal, etc. But to me that is hard to estimate or justify. My method seemed to try and isolate it as much as possible.

I must admit, I was expecting to see at least modest effect. But the bell curve was pretty much the same, retreating back to 2005 price levels. I will post the link here eventually.