I’ve been hearing a real estate agent theory on price dips the last few months that blames months of year-over-year declines on more home sales in the lowest prices. The median means half sell for more and half for less, so the idea statistically is that using the median price of closed sales minimizes the swaying of prices by one specific price category.

Pierce County median price declines have come in two forms in recent months – prices compared to the same month the year before have dropped six of the last seven months. Month-to-month prices have been down since peaking in August. (The median price was $258,405 in March.)

So I asked Dick Beeson, an MLS director and Windermere broker, to pull closed sales from Jan. 1 through March 23 for 2006, 2007 and 2008 in five different price categories. I examined sales in 16 Pierce County areas and several are seeing a higher proportion of sales in the under-$250,000 category than last year. But a few have also seen declines and a couple are essentially flat.

But if you look at the number of sales in the lowest-price category, Lakewood and the Puyallup area both saw an increase in closed transactions despite drops in sales overall. Plus, several areas show that the sales of homes priced below $250,000 fell less than sales drops in other price ranges. This is in contrast to numbers in November that showed most areas saw bigger declines in the lowest-priced homes. All very interesting -- and the best evidence that buyers in some areas are purchasing more of the cheapest homes than they did last year.

I’ve provided the proportion of the total sales that the under-$250,000 category accounts for in the first 114 days of each year. Tomorrow, I'll show the same areas with the increase or decrease of closed sales in the same price category.