The general feeling among Fredericksburg real estate investors is that real estate values never decline here, especially short term rental (STR) values.

That was until a couple years ago, when interest rates escalated to bring down the federal inflation rate. With less money available to borrow, real estate buyers lost their enthusiasm.

But even in these glum times, the Fredericksburg charm seems to come shining through.

Data from the Central Hill Country Board of Realtors shows 59 Fredericksburg permitted STR sales in the past 12 months. Median prices dipped over the first six months and then climbed back in the past six. Specifically, twelve to seven months ago, the median STR sale in Fredericksburg declined -8.016% from $617,500 to $568,000. However, in the last six months a rebound from the $568,000 median sale to a $679,000 median sale price occurred -- a 19.54% increase. 

Things went down... but then they went back up... AND slightly higher than before.

So, the bright side for investors is that there has been a slight increase in the overall past 12 months -- +9.96% or +.83% per month over the last 12 months. The graph above is a little deceiving. The trend line shows a slight overall decline. The appearance is worse than it is. Outlier highs and outlier lows can make data pictures appear better or worse than reality. It's important to look at the median sale prices over time, and the median sale prices detailed in my explanation above show a rebounding picture.

So, your STR has slightly increased in value in 12 months -- not a lot -- but at least it hasn't gone down.

Posted by Troy Sifford on July 3rd, 2024 2:02 AMLeave a Comment

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