Prevailing wisdom says that one of the major indicators of a bursting real estate bubble is an increase in the number of homes on the market. Using the local MLS, I pulled together the number of homes that were Active, Contingent or Pending in 2004 versus 2005. There are two snapshots – one for January through September and one for April through August. I haven’t yet figured out how to remove new construction from the equation, but I will try.
In short, there were significantly more properties on the market in Albemarle, Charlottesville, Fluvanna and Greene in the “Spring Market” of 2005 versus 2004. Bubble or coincidence? I am predicting a decrease in the dramatic appreciation of home values. Homeowners may have to settle for 5% or 7% increase in value per annum versus 20%-25% increases in value. Any sane (and honest) person will tell you that that dramatic rate of increase is not sustainable.
Strictly anecdotal evidence: I am seeing more price reductions every day …
January through September
A=Active
C=Contingent
P=Pending
April through August
