- The Washington Times - Friday, December 5, 2008

There are some similarities between the stock market and the housing market. Both provide the greatest profits if you buy and hold for the long term. Both reward selling in a bull market and buying in a bear market.

With both stocks and housing in a bear market these days, your profit or loss depends largely on when you bought.A home bought in 2004 or 2005 is probably worth less than its cost. An exception is the city of Baltimore, where home values have remained strong.

Today’s charts give you median sales prices for several years, so you can see the Washington area’s home values for the past eight years.

We begin with 2000, when the market was balanced and prices were stable. After 2000, home sales really took off, causing prices to go sky-high.

The next bar is 2005, the year that sales began to slow. That fall, folks tried to cash in before the market changed. That surge in inventory became a drag on the market. As buyers showed less interest, the market got slower each year and prices fell.

So, if you bought in 2005, now isn’t the best time to sell. However, anyone who bought in 2000 is in fine shape. Your home is worth at least 29 percent more than it was back then. In Prince William County, recent home prices have plummeted , but still manage to beat 2000.

Other jurisdictions have seen better gains since 2000. Fairfax is up 65 percent compared to 2000; Montgomery is up 95 percent; Arlington is up 116 percent. The District beats them all with prices up 148 percent compared to 2000. October’s data is not as reliable as the annual data represented by the other three bars. Home-price data for a single month is very susceptible to fluctuations. Those fluctuations even out in annual data, making 12-month data preferable for serious analysis.

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

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