August 17, 2005
A new study finds the pricing of homes in the Charlottesville area averages 24 percent above market value. The study examined 299 housing markets nationwide, and Charlottesville ranked 71st on that list. Real Estate Agent Jonathan Kauffman says an old economics theory might be to blame.
"So the demand is up and the supply still hasn't caught up at this stage of the game. Therefore, housing prices are still moving forward at a pretty good clip," Kauffman said.
The study took into account area income, population density, and mortgage rates and while Charlottesville ranked 71st, some agents see no signs of the market slowing down.
"It's been a very consistent increase [in the last ten years] but really the last five [years] have been a lot more of a torrid pace," Kauffman said.
When Sue Ferrell bought her home five years ago in Village Square, she never imagined this type of market.
"Never would I ever realize that the price of the houses and what they are going for now," she said.
But with high property values come downfalls.
"Suddenly our taxes are going up, our insurance is going up. Everything has just jumped," Ferrell said.
Right now, Charlottesville still remains a big draw. Kauffman believes that pricing relative to other areas is the main reason.
"In the grand scheme of things, Charlottesville is still a very affordable place to live compared to 120 miles from here in DC and New York and New Jersey where people are moving from," he said.