Are Local Home Sales Prices Actually 8 Percent Higher This Year Than Last?


Are Local Home Sales Prices Actually 8 Percent Higher This Year Than Last?
By Scott Rogers • October 10, 2018
I'm going to say yes, but no, and mostly no. Keep reading -- this is important, as it can give us an indication of whether our local housing market is heating up too quickly. OK -- at first glance, it would seem that home prices have increased 8.42% over the past year... But let's look closer -- breaking home sales down into two categories... Single Family Homes Duplexes / Townhouses / Condos Here's where things get confusing -- if the median sales prices of all properties has increased 8.42%, why are we only seeing a 3% (+/-) increase in each of the two categories? So, wait, what? Single family home sales prices are up 3.03% this year -- and duplex/townhouse/condo sales prices are up 3.77% this year -- but when you throw all of the data together it somehow appears as if prices have risen 8.42% over the past year??!!?? How can this be?? It turns out it's all about how many of each type of property are selling... As shown above -- last year only 70% of home sales were single family homes, with 30% being duplex/townhouse/condo sales. This year, that ratio has shifted, and 75% of home sales have been single family homes, with only 25% being duplex/townhouse/condo sales And therein lies the answer. When single family homes sell for around $230K and duplexes/townhouses/condos sell for around $165K -- if there is a shift in how many of each property type sells (relative to the other) then the median sales price for the combined ALL residential sales will adjust more than sales prices of each property type are actually adjusting. So -- Sellers: You are likely to be able to sell your home for 3% more than you would have last year -- NOT 8% more. Buyers: You are not being expected to pay 8% more for homes this year than last. Everybody: Let's not be disappointed that we're not seeing an 8% increase in home prices -- let's be happy with 3%. An annual increase of 3% is (historically) normal, and seems to be quite sustainable. An annual increase of 8% (especially if back to back with another similar year) would likely mean that home sales prices are adjusting upwards too quickly and they may have to come back down at some point. So -- good news, bad news, but in my book, mostly good news! Home prices have risen 3% over the past year -- not 8%. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 21, 2024 (unless otherwise noted).
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