- The Washington Times - Thursday, August 10, 2006

It’s a little hard to know what to make of home prices these days. A reader wrote me last week saying that in his community of Gaithersburg “we have experienced almost 15 percent decline in value.”

Other folks have made comments to me about home values falling, but it’s hard to find this in the data. I’m not disputing the possibility that prices have fallen in some individual communities, or in certain price brackets.

Nor am I saying that your home will necessarily sell for the same amount as your neighbor’s did last year. To find a buyer, many sellers are finding they need to price their home aggressively this year.

But, looking at the county level instead of individual properties, home values in the Washington region appear to be holding steady, even rising in some cases.

The charts at left show you the median sales prices for April, May and June, along with the percentage of increase or decrease when compared to the same month in 2005.

Two things should be apparent:

First, only four negative numbers appear on the page, indicating that prices are generally up compared to last year.

Second, prices rose from April to May to June in many jurisdictions. In Prince William County, for example, prices went from $380,000 to $389,900 to $390,000.

I must caution you against drawing too many conclusions from this monthly data, however. Monthly data is very susceptible to fluctuations caused by the sale of a few very expensive or very inexpensive homes. Those fluctuations even out in annual data, making 12-month data preferable for serious analysis.

Also, remember that the homes sold in April were different homes than those sold in June. So, these numbers don’t track the values of individual properties.

I’m aware of only one organization that tracks the sales prices of the same properties year after year. The Office of Federal Housing Enterprise Oversight (www.ofheo.gov) publishes this kind of sales data each quarter, but only on the state level.

Its most recent release furthers the argument that home values are not falling. In fact, according to OFHEO data, Virginia’s home prices in the first quarter of 2006 were up 18 percent compared to 2005. Prices were up 20 percent in Maryland and 21 percent in the District.

I’ve includedBaltimore in these charts because of astonishing price increases.

Compare Baltimore’s rapidly rising prices with the plateau that the District experienced during the second quarter.

Surely, this must have something to do with the fact that homes in the District cost almost three times as much as those in Baltimore.

Contact Chris Sicks by e-mail ([email protected]gmail.com).

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