It’s easy to just read headlines and get nervous and scared. Thankfully, there’s data to review. The summary is here (no longer available). Their methodology is here (archived: 2008). USA Today is good at presenting pretty shocking summaries (no longer available).
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 (no longer available):
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 (no longer available):
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 once
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I have been been representing buyers and sellers in Charlottesville, Albemarle, and Central Virginia since 2001. Get local insight born of experience.
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