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Statistics can tell you something, but they might be telling you the wrong thing.  Real estate depends largely upon two statistics: the median sale price and the average sale price.  Therefore if one looks at the median sale price and average sale price and finds that there isn't any difference there is the great assumption that the market is stable. Real estate people will say, "Well the median sale price and average sale price is about the same as last year.  Therefore the market is stable." But is it?  What does it really indicate?  It indicates only what people are willing to spend.  It doesn't tell us what they are getting for the money.  Thus the great lie of statistics. 

Let's say that the median sale price is $250,000 for 2006 and 2007.  But if one really wants to know what the market is actually doing, then one should compare what kind of home was purchased for that 250,000 in 2006 and then compare it to the 2007 home.  That would be the best indicator of what is happening to real estate values.

So be careful when you hear on the news, "Median sale prices have only dropped 1%."  They are only giving you one side of the coin.  They are only telling you what people are willing to spend.  They are not telling you what they are spending it on; what they are getting for the money.