Home values will ALWAYS and ONLY go UP!

Prices Only Go Up!

Here’s an interesting report from NPR telling the story of an employee of Freddie Mac who manages an online calculator that has (intentionally or unintentionally) been telling web users that home values will only go up!

Read more from NPR: Housing Guy Apologizes For Housing Bubble

It is interesting — I do wish home values would only go up — and during most years values do increase.  The last few years, however, have not held that promised increase in most parts of the Commonwealth.

Let’s take a look at what has been happening in the Central Shenandoah Valley….

First, value changes depend on the time horizon that you consider.  In Harrisonburg and Rockingham County, home values decreased for 4 out of the past 10 years.  That is to say that the first six years of the decade showed an increase (’01, ’02, ’03, ’04, ’05, ’06) but the most recent four years have shown a decrease (’07, ’08, ’09, ’10).

But here’s an interesting cumulative look at the value of a $200,000 home purchased in my market area in 2000:

  • 2001: 9% increase to $218,000 (9% cumulative increase)
  • 2002: 2% increase to $222,360 (11% cumulative increase)
  • 2003: 8% increase to $240,149 (20% cumulative increase)
  • 2004: 16% increase to $278,573 (39% cumulative increase)
  • 2005: 24% increase to $345,430 (73% cumulative increase)
  • 2006: 8% increase to $373,064 (87% cumulative increase)
  • 2007: 1% decrease to $369,333 (85% cumulative increase)
  • 2008: 4% decrease to $354,560 (77% cumulative increase)
  • 2009: 5% decrease to $336,832 (68% cumulative increase)
  • 2010: 3% decrease to $326,727 (63% cumulative increase)

Home values can certainly decline over the short term, and perhaps over the long term?  Thus far, home prices are still quite solid over the 10 year horizon — showing a 63% increase.  That said, 2006 through 2016 home values might tell a different story.

What are you seeing in your market?

This entry was posted in Uncategorized. Bookmark the permalink.

6 Responses to Home values will ALWAYS and ONLY go UP!

  1. I’d like to know where you got the cumulative data to make your calculations?

  2. Scott Rogers says:


    My apologies if I wasn’t clear on the data source. The data above is only for my local market (Harrisonburg and Rockingham County) and is derived from the Harrisonburg/Rockingham Association of Realtors MLS.

    Thank you,

  3. Interesting point. Long-term, real estate is a typically a good investment vehicle, provided that common sense and diligence are used when buying a property.

  4. In some of the more desirable areas, we are actually seeing double digit increases in average sales price. Of course, the news is not reporting that. They just echo the national doom and gloom that apparently sells more ads.

  5. Patrick says:

    It appears the recent decreases haven’t yet taken back the explosive increases of 2005, at least in your area. As in the past, when the media reports the death of real estate for all time, and the financial services people urge all their followers to abandon real estate and put all the money in stocks, that is when I will know another surge is coming.

  6. Lenn Harley says:

    I would suggest that the long term appreciation is now subject to a much longer time frame.

    Home value appreciation combined with the mortgage interest deduction has made buying a home attractive.

    Sadly, appreciation is now marginal and in a “catch up” mode and the mortgage interest deduction a very large target of the President and many in Congress.

    As of today, I don’t see any light at the end of this deep well. Buying a home will have to be because one wants to select neighborhoods, travel alternatives, quality of life and the investment potential will not be a consideration between rent or buy.

Leave a Reply

Your email address will not be published. Required fields are marked *