In some parts of the country, they definitely are! But since all real estate is local, I'm really more interested in what is happening with home sales prices in Harrisonburg and Rockingham County.
In a given week, I talk with a lot of people about real estate including my past and present clients, my friends, other Realtors, lenders, appraisers, attorneys, the media, etc. If I asked each of them whether home values are declining I'd get a LOT of different answers.
In the past, I've tried to examine this question from many different angles:
Trends in median price per square foot
Median home sales price trends (single family versus townhomes)
Median home sales price trends (single family combined with townhomes)
Year to year changes in median home sales prices (per my monthly reports)
Median sales prices over the past eight years during January to June.
But ultimately, homeowners really only care about whether the value of their particular property is going up or down. The problem with all of the analysis referenced above is that it looks at trends across wide sets of data. To better understand how home values are ACTUALLY changing, we need to look only at homes that have sold twice in a given time period --- and look at whether they sold for more or less the second time they sold. Here we go....
In the past three years (7/2/2005 - 7/2/2008), there have been 4,209 residential sales in Harrisonburg and Rockingham County, as recorded in the Harrisonburg-Rockingham Association of Realtors MLS.
Of these 4,209 home sales --- there were 182 properties that sold twice in the last three years. These 182 properties provide us with two data points so that we can measure ACTUAL APPRECIATION. Here are some interesting facts about these 182 properties that sold twice in the past three years:
- 157 properties increased in value (86%), while 25 properties did not (14%)
- On average, these 182 properties increased at a rate of 28% per year.
- 8 properties decreased in value by more than 5% per year.
62 properties decreased or increased by less than 5% per year.
112 properties increased in value by more than 5% per year.
Here's the methodology, for those who are interested:
1. Gain or Loss = Sale Price 2 - Sale Price 1
2. Time Increment (Years) = Sale Date 2 - Sale Date 1 / 365
3. Appreciation Per Year = Gain or Loss / Time Increment
4. Percentage Appreciation Per Year = Appreciation Per Year / Sale Price 1
As you may be able to tell, this isn't an automated report (at all!) -- so I probably won't be reconstructing this analysis too often. I had to sort through all 4,209 home sales and manually match up double sales, etc., etc. Does anyone know an undergraduate statistics student who would like an (unpaid) internship? :)
