It’s easy to just read headlines and get nervous and scared. Thankfully, there’s data to review.Â The summary is here. Their methodology is here. USA Today is good at presenting pretty shocking summaries.
The good news – The Charlottesville MSA is the 82nd most overvalued MSA in the country. In August 2005, we were ranked #71. (Please note the touch of sarcasm)
We have seen a pretty dramatic increase – the area was statistically considered (by this data) to be 0.2% under-valued in the 1st Quarter of 2002 and now the area is 29% over-valued. Wow.
Do you see the difference between these two statements?
From the report:
After determining what house prices should be, in this statistically normal sense, we compare those theoretical prices to actual prices to determine the extent of over-, or under-valuation.
From USA Today’s byline:
Metro areas’ first quarter housing prices with the greatest percentage above and below what they should be: (emphasis mine)
Having someone say arbitrarily and broadly what a house price “should be” removes (to me) the free market’s influence. When buyers choose not to meet a Sellers’ asking price – that is proof that the house is over-valued.
Locally, many sellers seem to still not realize that the value of their home is not set by what they need to make; it is what a ready, willing and able buyer is willing to spend. They are slowly coming around – there have been nearly 80 price reductions in the MLS in the past three days. Reality sets in onceÂ