Math’s right -- but is the conclusion?

I believe that while “L.A. Prices Defy Odds” [March 18] is mathematically correct, it is economically incorrect. As the article points out, the activity is slow, and most of it is on the higher end of the market. So by doing the math, the median sale price is up and the average sale price is up; however, hold off on the celebration because the value of every house is clearly down.

Let’s say last year there were lots of sales equally distributed between $500,000 and $1 million. The average and median sale will be $750,000.

Today there are few sales. The only things selling are the houses that sold for $1 million last year and are now selling for $800,000. The average and median sale is now $800,000.

Your conclusion: Home values are on the rise. My conclusion: Home values have declined 20% in some levels and completely died at the lower end.

Your conclusion is correct math. My conclusion represents the economics actually happening today. I’m a potential buyer on the sideline, and I’m there to stay for the foreseeable future.

JACK TATEEL

Sherman Oaks