Prices Up vs. Values Down - What's The Truth?

The number most homeowners have been looking for has finally arrived - Prices are Up! However, if you read the local headlines, you probably saw that "tax values declined." So how can this be?

There's a difference between tax value and market value. As I monitor the home sales in your neighborhood, I'm looking at multiple venues of value. Tax assessments, of course, is one of them. The good thing about tax values is that they are stable throughout the year. The problem with them, however, is that they are stable throughout the year.

In any value measurement, you're looking for a stability factor. That's what tax assessments bring to the table. They are announced every January and they stay at that amount for the whole year. Market values are more dynamic - they change week by week, month by month.

As we all look at tax assessments that have dropped, the real number that affects your net worth is the market value of a house in your neighborhood last month (rather than a year ago) to determine your value today (when you're actually selling it!) It's just like a stock - what my Blue Chip shares were selling for last year at this time have no bearing on what I'm selling for this year - except that I can feel bad about them if they're selling for less. What's most important is - what are they selling for today, compared to when I bought them.

For instance - let's say you live in Orange Hunt Estates in Springfield, VA. Last year, the average price was $450,385 - down from its high in 2005 by 17%. Doesn't sound so bad does it? But what if I told you that 17% equaled more than $100,000? Ouch!

But what if I also told you, that 71% of the homeowners there purchased their houses for about $100,000 LESS than their current market value today? So they are sitting on $100,000 of equity that could be used to move up in a market that has now begun to move up in value? Market values rose and they fell - now they are on the rise again.

So what? What does that mean to you? The overall market is in an upswing in Northern Virginia compared to the last few years. Average prices are on the rebound, days on market are down, interest rates are low. The key is - did I buy it lower than the amount I can sell it for today and is it time to move up while prices are on the rebound, days on market are down and interest rates are low? (Oh - and by the way - there's also a homebuyer tax credit - money in my pocket - of either $8,000 or $6,500 to boot till April 30!) Got questions? I may have some answers. Call, text or email me today.

Until next month...

Katharine Binkley

The Binkley-Sandles Team

Weichert Realtors

9299 Old Keene Mill Road

Burke, VA 22015

(703) 328-9229

http://www.HomeSalesinVA.info