How Worthless Are â€śProperty Valuesâ€ť?
Homes For Sale signs are sprouting up on front lawns like blooming flowers looking for Virginia Beach’s April sun! Since we are used to hearing how “property values” are still battling to rebound, this year, the ‘Sale’ part of those signs is likely to be taken a little more literally than they used to.
But since property values seem to be such an important measure, what is really behind the words? Who determines Virginia Beach’s property values and how?
We aren’t just talking about some basic Economics 101 textbook definition of economic principals. We are talking about a family’s major investment – their current or future home. It is valuable to know the difference between the meaning of property value and other, less abstract terms, like price.
In a nutshell, property value can mean different things to different folks, and even more different things to the same person! To a homeowner, for instance, it can be how much money they can sell it for (its market value), or the value it has if they do not sell but continue to use it as a place to live (its use value). To a mortgage broker, it usually means current market value; to an investor, property value might be its future value or its liquidation value, which would also fluctuate depending on whether they are thinking of some possible future forced liquidation or an orderly liquidation. Property value is a phrase that can mean so many different things that it is not exceptionally useful.
So the next time you hear a news anchor talking about “rising property values” or “sinking property values,” be ready to take what they are saying with a grain of salt…or maybe an entire shaker-full. Property values do not mean price, asking price, or selling price. Those terms can have actual numbers attached!
In case you have been thinking about buying or selling a Virginia Beach property, Check out Virginia Beach Residence! We have Virginia Beach homes for sale -- and the market’s ready!
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