Pop quiz

Quick -- of the 77 out of 150 metro areas tracked by NAR where median sales prices declined year-over-year during the fourth quarter, where did they fall the hardest?

If you guessed one of the markets in California hard hit by foreclosures -- say Sacramento, L.A. or Riverside, you're very, very close. But guess again.

If you're thinking one of the areas where speculators ran rampant during the boom, like Las Vegas, you're be in the ballpark. But guess again.

If your gut instinct tells you it's got to be a market in the Midwest that's been hit by job losses in manufacturing, like Detroit, now you're in the right part of the world.

If you guessed Detroit, hop on I-96 west and drive for an hour and a half, to Lansing, Mich. home of the state Capitol and the birthplace of Ervin "Magic" Johnson and Oldsmobile (Remember them? They were making "not your father's Oldsmobile" until they stopped making cars altogether in 2004).

According to statistics released by NAR this week, the median home price in Lansing fell 18.8 percent, to $109,600, from a year ago. That beats price declines in Sacramento (-18.5 percent); Riverside (-16.8 percent) Jackson, Miss., (-16.8 percent) Decatur, Ill. (-15.9 percent) Detroit (-13.8 percent) Los Angeles (-13.1 percent); Palm Bay and Cape Coral, Fla. (-13 percent), and Las Vegas (-12.8 percent). (see Inman News story).

Don't think that the Greater Lansing Association of Realtors is taking it lying down, though. In a press release, GLAR took issue with NAR's methodology, saying foreclosures have a greater impact on median home prices than average prices.

"By their very nature, foreclosed sales are sold at lower prices than the average sales price. By grabbing only the middle sales for comparison purposes, foreclosure would push the numbers downward," GLAR said.

Average prices fell only 8 percent from the third quarter to the fourth, GLAR said, compared to 18 percent using median price (sorry for switching from year-over-year to quarter-to-quarter, but those are the numbers they gave. Almost all of Lansing's median price decline took place between the third and fourth quarters, anyway). 

"Another factor is that sales in the fourth quarter are generally lower every year," GLAR said. "The last complication to note is that Michigan’s economy has generated a much higher number of foreclosure sales."

Taking a page out of last year's NAR playbook, GLAR concludes that, "No matter how you look at the numbers, the truth of the matter is that now is a great time to buy a home in the Greater Lansing area."

Yeah? If you can meet Fannie and Freddie's new declining market requirements.

OK, so lets recap: things aren't so bad in Lansing, it's just that foreclosures are have an exaggerated impact on median home prices. (So that's NOT an issue for Detroit, Stockton, Las Vegas, Riverside and Sacramento -- the five markets with the highest foreclosure rates in the nation?). And Lansing is the only market that experiences seasonal variations in sales.

Seriously: the purpose of putting statistics like this out is to get a handle on trends. If NAR chose to report average prices, they might also be accused of trying to obscure what's happening to prices that the greatest number of people care about -- those in the middle -- in markets where high end homes haven't been hit as hard.

GLAR's concerns that median home price stats don't provide a complete picture of what's happening in the market are probably justified. But switching to average price doesn't seem like a very good solution. What many experts advise is looking at price-per-square foot.

But price per square foot is not as easily grasped by consumers, and I don't know if it's possible to produce those numbers and still put the stats out in a timely fashion -- or even if it can be done at all (anybody?).

If GLAR wanted to set the record straight, they could put price-per-square-foot numbers out themselves. But they don't seem to be very interested in providing the public with sales statistics of any kind on the GLAR Web site, at least that I can tell.

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.