The Sun Gazette, a publication in Northern Virginia, has been annually tracking since 1975 these statistics: the average home sales price, the total number of sales, the total volume of home sales as well as the change year over year of this data. Further included in the chart are the historical and cultural notes of interest for that year. I include this information in the material I present to clients when discussing the "state of the market" and what I predict the future holds. Of course no one knows what the future holds, but by analyzing the past and understanding trends, the clearer the picture often is.
In 36 years, there have been only 11 years which have had a double digit increase in the average sales price of a home. In that same 36 years, there have been only 4 years of negative appreciation in the average sales price of a home. That right there should convince a skeptic that the Northern Virginia market is a cream puff of a place to own real property!
Six of the 11 years of double digit appreciation occurred within the last decade, years 2001 through 2005. Two of the 4 years of the instances of negative appreciation in the average sales price also occurred in the last decade. What a home value roller coaster it has been! But it has clearly been UP more than it has been DOWN. Again another clear indication that owning real property in Northern Virginia is a good investment!
The peak of the 5 straight years of double digit appreciation was in 2005. In 2006 the market was living off of the fumes of 2005, with a flat.1% increase. In 2007 the market was surviving off the fumes of 2006, again with a flat.1% increase. In 2008 and 2009 there were no more fumes as in both years there was a negative change in the average sales price, 14.4% and 6.5% respectively.
The best news of all is that in 2010 the market started on the road to recovery. In 2010 there was an 8.9% positive appreciation in the average sales price. The average sales price at the end of 2010 is greater than it was in 2004, but still a ways to go from the peak. A typical market roller coaster cycle is 7 years. So if we were at peak price in 2005 to 2007, then we should be back up to peak sometime between 2012 and 2014. With the 8.9% positive appreciation documented, it appears we are on track.
The link to the January 20, 2011 Sun Gazette article entitled The Roller-Coaster Continues in Local Real Estate Market is: http://www.sungazette.net/articles/2011/01/27/fairfax/news/fe85v1.txt
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