Might a logical explanation be the exodus of "investors" from the housing market? For instance, all those people who buy the $150k house, throw $25k worth of work into it and then hope to flip it for $250k? So while typical, liveable homes in the affordable range may be easier to sell, the asking price on those homes that were attractive to speculators (ones in the up-and-coming neighborhoods and that may require significant rehab work) might need to come down to sell. And would also be the very homes most likely to be in foreclosure and thus priced to move by the bank or seller. There are so many moving parts to the housing industry that "average" and "median" stats require significant explanations.

That's a good theory, Mitch. I wondered if investors might have something to do with it, but I hesitated because the lower-end group in HousingTracker.net would also include a lot of housing that doesn't need major rehab work (or at least you wouldn't think so by the price). In the, say, $50,000 to $100,000 range, I could see that lack of investor buying would be a major issue pressing down price.

Just anecdotally, I know that many of the more seasoned rehabbers in Baltimore (those who had been involved the business for several years) said that during the 2006ish time frame they couldn't understand the economics of a lot of the deals investors were doing. They made the point that the input (the pre-rehab homes) was so expensive that there was virtually no way they could do the requisite work and hope to make a profit. My guess is that both the input houses and the finished product are hurting significantly because of the investor exodus. Which, of course, brings down prices on non-investor owned properties as well. But it all stems from the fact many investors made irrational decisions and those decisions are now meeting the required consequences in the form of foreclosure or losses for the speculators.