Someone mentioned last week that they expect local home prices to drop another 10% or so before they stabilize.  I don't think that I agree, but let's try to put it in context:



The graph above (click here for a larger version) shows the median prices for single family homes in Harrisonburg and Rockingham County since 2000.  You'll note that the median sales price has fallen 17.5% from $226,800 in 2006 to the current value (in 2011) of $187,000.

Will home values really drop by another 10%, down to $168,300?  I don't expect that they will -- I think that as the pace of home sales stabilizes (which started in 2010) that we will see prices gradually start to stabilize. 

Certainly, though, if prices were to drop another 10% locally (or even 5%) that would be instructive for sellers who are holding out with aggressive list prices. 
  

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