Four Things To Watch For In New River Valley Real Estate

Ever wondered just how high real estate climbed in the 2000’s?  There’s a graph for that (with added text by yours truly):

The image is from the NYT, and was republished at  And I like it because I have to see things visually – I’m not theoretical, I’m visual.  I have to see/touch/do it in order to get a real grasp of things, and I think it’s a great image.

Consider that on the left of the graph, in 1890, is the benchmark of $100000.  If a home priced sold for $100000 (in today’s dollars) in 1890, you can then see how housing responded to events throughout history.

  • in World War I, that $100000 house would be worth ~ $94000 (hmmm – sounds like perhaps wars aren’t good for economies, but that’s another topic)
  • at the end of the Great Depression, that house would have been worth ~ $82000
  • at the end of the millenium, that house would have been worth ~ $109000

For 110 years, since 1890, the values of homes haven’t deviated much, plus or minus, without pressure from external forces (like wars and the Great Depression).  During times of peace, the graph shows that for the most part home values haven’t moved up or down more than 20% at any given time … until the year 2000.  Then the climb began, and what comes up must come down.

The Case-Shiller Index tracks residential real estate values nationally, across 20 major metro markets.  Obviously, the Blacksburg/Christiansburg/Radford corridor is not going to be a major metro market (thank God), but the index still provides us strong factual figures, and informed projections on which we can make decisions.

So when people ask me what’s going to happen in real estate, armed with this image I’m going to say … “I don’t know” professionals from elmhurst real estate attorney have been trying to figure it out.  Look, none of us do.  Graphs are great, projections are nice, but at the end of the day people are going to buy what they can buy, or sell what they can sell.  I’ll use the tools I have available to me, but it’s impossible to predict the future and be right most of the time.  So here’s what I think is going to happen in the next 24 months:

  • Real estate values in the New River Valley will hold steady, plus or minus 2% of where they are right now
  • Inventory levels will remain high through 2010, with buyers having a lot to choose from
  • Appropriate, realistic pricing will remain key for sellers in all price points
  • Interest rates will rise, which will slow any value appreciations in the foreseeable future

I needed a chart

That’s what my economic projection for the New River Valley real estate market will be – now let’s see what happens.  And in order for things to improve here locally, watch unemployment.  As the unemployment numbers for the New River Valley go down, expect that consumer confidence – and the real estate market – will go up.  In the meantime, keep this in mind – if you’re buying a home in the next six months, get serious.  Yes, inventory levels will remain high, but interest rates will not remain as low as they currently are.  I can’t tell you why I think they’ll rise, but I’ve seen rates quoted by local lenders, including Brandon Nicely, these past two weeks that I’ve never seen before.  We’re talking fixed, conventional loan products at rates I would have said three months ago we’d never see … and the cynic in me says we won’t see them again (so refinancers, you too – you could save hundreds of thousands in interest alone). If buying a home is on your radar for the near term, we should talk.

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