February 28, 2008

Fun with real estate

How much is that house worth?

Well, depends on your metro in the Case Shiller index, but a way to check the estimable Prof. Shiller is to simply roll back to a house in that metro that sold in 2001 or so.

I did it. Saw a house in Charlotte on the market for $250,000. Checked the tax records. It was bought in 2001 for $165,000.

So, a 34% premium over the buy price.

Checked the Charlotte, NC metro index. And it is (drumroll….)

131.90

Put another way, its 32% over the index, which like all good indexes makes 100 the base line.

Pretty damn close to perfect. So now you know what to offer.

Problem, of course, is that way, way too many people bought houses after 2001, on the upswing, and borrowed too much to do so.

Uh, oh.

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