Really, I am not a curmudgeon. A curmudgeon is the sort of person who is so negative and so sour that, at around four o'clock, the bars ask him to leave so that they can get on with happy hour. I'm not that bad.

Nonetheless, I just can't get as upbeat as so many have about the resurgence of sales in California. I'm not alone.

Recently, at a conference sponsored by the National Association of Realtors® (NAR), Realtors® from around the country heard from Lawrence Yun, the association's chief economist. While giving all the usual economists' caveats, Mr. Yun still waxed enthusiastic about recent sales numbers coming out of California. He opined that, given the dramatic sales increases in California, it might be the beginning of a market turn (upwards). Curiously, conference attendees from California tended to react with disbelief. Was he talking about the state that they live in?

Why should there be this disconnect between Realtors®' experience and the recorded numbers? No one doubted the veracity of the reports. In January of 2008, California sales were double (101%) those of the past January! In February, sales volume was up 83% from the same period a year before. Granted, those months last year were pretty pathetic; but still, how can the numbers not make the spirits soar?

Well, for one thing, while sales volume has increased, median sales prices have decreased dramatically. January's median sales price was 40.5% below that of the same month a year ago; in February the number was down 40.8%. Therein lays the story.

The median, you will recall, is the midpoint. An equal number occur below it as occur above it. It can be a useful number to track; but, occasionally, it can be misleading. Suppose, for example, that there were 5 sales, and that they were at 10, 8, 6, 4, and 2. The median would be six. Now, suppose that there were 7 sales, and that they were at 10, 8, 6, 4, 3, 2, and 1. Now the median would be 4. There would be more sales. The median would have dropped. But the sales at the higher end would still be the same.

In many respects, this is what seems to be happening in California. There are more sales, yes. But they are occurring at the bottom of the price range. This is not in and of itself bad, of course. Who is buying, after all? They are first-time buyers and they are investors. For a lot of reasons, that is a good thing.

The not-so-good-thing or the not-quite-as-good-as-we-would-like-it-to-be thing is in the nature of those sales. In many areas around the Golden State (and probably in other parts of the country as well) 50%, or more, of those sales are of properties that are bank-owned (acquired through foreclosure), short-sales and/or properties in the process of foreclosure. But the sales of these kinds of properties do not have the effect that bottom-of-the-price-range sales typically have. Namely, they don't create move-up buyers. A two-bedroom condominium sells, but it doesn't result in the sale of a three-bedroom house. It is just the reduction of some bank's inventory of REOs or non-performing assets.

The housing market will have recovered when sales are spread across the price ranges (even if those price ranges have dropped). Of course we are glad that first-time buyers are getting into the market. But there is more to be done. That is why greater attention needs to be paid to providing stimulus tax breaks and credits to those potentially able to buy in the middle and upper price ranges, rather than just focusing on buyers at the bottom level.

Published: May 14, 2009

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Bob Hunt is a director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .