« Video: Pickup a pickup [truck] in August |
Main
| Islip Realtor® Wins Spirit Award for Charitable Works »
August 07, 2007
Why the Northern Virginia Real Estate market has to drop 25%
This year-end price data is from the Northern Virginia Association of Realtors site. It is one of the few that provides enough historical data to figure things out for yourself. In a moment I am going to show you why prices in Northern Virginia are headed for a 25% drop.
The data shows that the average price of a home in NoVa went up 144% in the ten year period from 1997 to 2006, with the bulge of the snake occurring from 2001 to 2005.
The previous ten year period, 1987 to 1996, showed a 51% increase.
So using that as a rough guideline for normal, the appropriate price in NoVa should be about $332,730.
Which represents a potential fall of $207,268 from the current average price, or 38%.
Even allowing for bigger homes, granite and stainless, you’re looking at 25% off $539K, or about $400K, as the bottom. Which is still more than 3X earnings, of course.
But let’s say the new math allows for 5X, with you know, a 50 year loan, point is, prices have to drop at least 25% before they even approach affordable in NoVa.
2006 -- $539,998.00
2005 -- $538,144.00
2004 -- $440,506.00
2003 -- $365,209.00
2002 -- $323,408.00
2001 -- $285,159.00
2000 -- $252,374.00
1999 -- $238,496.00
1998 -- $229,151.00
1997 -- $220,932.00
Posted by Frank at August 7, 2007 11:48 AM
Trackback Pings
TrackBack URL for this entry:
http://www.frankgiovinazzi.com/cgi-bin/mt/mt-t.cgi/236
Post a comment
