Prices rose

102 Windhover Place.

There are two common defensive tactics that current home owners will take when trying to defend the idea that current housing prices are here to stay.

1) Our area didn't see appreciation the way other areas did (e.g. California).
and
2) Our area is better than other areas, so any appreciation made sense.

In this post, I'll address tactic #1.

Did prices rise in Chapel Hill? Yes.

This tiny graph from Zillow shows the median home price in Chapel Hill over the past ten years.



Ten years ago, the median home sold at $178K, Back in March, the median sales price was $356K. Prices doubled. I don't think these figures are inflation adjusted; however, inflation has been in the 2% range during this time. 1.02^10 = 1.20, meaning that if property values merely kept up with inflation without any of that evil appreciation like they had in California, then they should be selling for 20% more than what they were 10 years ago. In this time, housing prices appreciated at roughly 7% a year (1.07^10 = 2).

Put another way, houses currently are 40% more expensive than they should be.

Today's property:

102 Windhover Place $148/sqft. $359,500

This is home is a little bit better than the median in Chapel Hill. Back in April, its owners were asking $379,500 -- a bit above the median selling point in March. In 1998, it sold for $230,000 -- a bit above the median selling point in 1998. The current owners stand to make $120K for having lived in a house for 10 years. Good job guys. Way to house live.

Of course, they only make this money once they have found someone who wants to assume an extra $120K worth of debt. The house has been on the market now for 74 days.