Home values going up despite sales prices going down?

Tracking median sales prices can sometimes be deceiving....

• If older homes are selling this year (compared to last) then median sales prices might be dropping even if home values are going up.
   
  
• If smaller homes are selling this year (compared to last) then median sales prices might be dropping even if home values are going up.
   
• If more homes without garages are selling this year (compared to last) then median sales prices might be dropping even if home values are going up.
  

It's possible that is happening in our current market.  The median sales price of single family homes has declined 9% over the past two years --- but the median price per square foot has increased 5% during the same time frame.