Charlottesville Area Market Update - June 2008
If a picture is truly worth a thousand words -
This market update is a bit longer and more detailed than most of my previous market reports - there seems to be uncertainty right now and I’d like to do my part to answer as many questions as possible. There is so much more that I would like to post, but feel that already I am in danger of providing information overload.
There are a lot of buyers in the market right now. Fortunately for them, there are a lot of houses on the market as well.
Diving right in -
Current Inventory - Days on Market
Right now*, there are 2,390 properties on the market (Albemarle, Charlottesville, Fluvanna, Greene, Nelson)*
312 have been on the market for more than one year.
908 have been on the market for more than six months.
1406 have been on the market for more than three months.
2059 have been on the market for more than one month.
Currently there are 606 residential properties currently market as being Under Contract. 223 of these - nearly 37%! - were on the market for less than 30 days. 307 - 50%! - were one for less than 60 days. Conclusion - IF YOU PRICE YOUR PROPERTY WELL, IT WILL SELL. You may however, come to realize that the price at which you can sell your property is either a) less than you expected/hoped for and/or b) less than you owe on your mortgage. What you need to make is irrelevant to the fair market value.
——————————-
The Agent Update
In 2007:
From January through the end of May, 158 Realtors had more than 5 sides
45 had more than 10, and about 700 had not had one transaction
In 2008:
From January through the end of May, 74 have had more than 5 sides
24 have had more than 10, about 900 600 have not had one transaction
Any Realtor who is not at least a little bit concerned about survival either isn’t paying attention or isn’t a full-time Realtor.
—————————
On to the market update (click images for larger versions):
So far, we have seen the fewest number of monthly sales in years, the highest number of homes on the market in May, and fewer building permits than we have seen in the first quarter. Interesting times. I didn’t know how long we’ve been in this cycle until I referred to this story - Sold Comps now matter less - from February 2007; and was a bit shocked that it had been so long since I had written it.
2005
2006
2007
2008
——————————-
Median Prices of sold properties* -
May 2008 -
$274,000
May 2007 -
$287,000
May 2006 -
$264,000
May 2005 -
$255,000
May 2004 -
$227,998
——————————-
Outlook/projections:
I have been saying for nine to eighteen months that the recovery is nine to eighteen months away. Anecdotally, properties that are priced well are selling, and buyers are buying - but there are more options now than ever before. We may not have seen the worst of what this cycle has to offer. I believe that the bulk of short-term ARMs have not yet reset, and until this happens (likely in 2009 and 2010) we may not see the proverbial “bottom.’ That being said, we won’t know the bottom until we have the benefit of nine to eighteen months of hindsight.
1 - If you plan to live in the house for at least three to five years, now could be a great time to purchase a home - some prices are tremendous, interest rates are at historic lows, and buyers are absolutely in the drivers’ seat. Be aware that well-priced properties are occasionally seeing multiple offers. If you are buying - look at the data, days on market, condition, external uncertainties and uncontrollable factors that may affect resale.
2 - If you are selling or planning to sell - be realistic with your goals and expectations. Frequently that realism will be costly.
Nota Bene
1 - a “side” is a side of a transaction - the Realtor had either the Buyer or the Seller in a transaction.
2 - Absorption Rate - Number of weeks it takes to sell the current inventory at the present rate of sales.
3 - Counties included - Albemarle, Charlottesville, Fluvanna, Greene, Nelson. I will include Louisa in the market updates next year.
4 - Source of all data is from the Charlottesville Area Association of Realtors’ MLS; while it is the best source of market data available and one can draw reasonable conclusions from said data, it is only as accurate as the people inputting the data.
5 - “Right now” is Sunday evening, 8 June 2008.
6 - I would really like to provide county-specific market reports, but in the interest of reaching and serving the broadest possible audience, I’ll stick to posting market reports for the Central Virginia region.
7 - I am available for consulting contracts, whereby I provide locality-specific analysis, as well as data points broken down by price range, new construction and property type (condo/attached/single family) analysis and more. See my new “Services” page for more information.
If you're new here, you may want to subscribe to my RSS feed or sign up for Email Alerts. This blog tracks the real estate market in the Charlottesville, Virginia region, local politics, technology and other matters impacting the local real estate market. Thanks for visiting!
3rd Quarter Market report for Charlottesville area real estate market
What a difference a year makes.
The Charlottesville Area Association of Realtors releases its Third Quarter Market report today. (The full PDF report is here)
There were 2,875 homes sold in the first nine months of 2007, which was down 647 (-18.4%) from last year. All local areas (Albemarle -17.8%, Charlottesville -25.6%, Fluvanna -21.5%, Greene -34.7%, Louisa -18.5%, and Nelson -21.5%) posted lower sales than the same period last year. Looking at the past 6 years (see chart below), our region has returned to a sales level just above 2003 – which was a record at the time.
Interestingly, this report comes on the heels of a post at Inman News that asks this of the National Association of Realtors:
But enough’s enough with the spin. Why can’t they just tell it like it is? Some markets are doing fine, but many are struggling. And while the jobs forecast and interest rate outlook appear to be in good shape, the mortgage market remains a huge wildcard. Prices are falling in many markets, which complicates the delinquency equation as many mortgages continue to reset at higher rates and higher monthly payments.
The new Charlottesville report seems to have less spin than many of the previous ones, which is beneficial to everybody - buyers and seller, the public, the media and the Realtors (and their credibility).
One aspect of the report that needs clarification is this - when looking at non-locality-specific numbers, the numbers they use are for the entire MLS, not just our market area, which I have noted several times before skews the numbers.
In the City of Charlottesville, Albemarle, Fluvanna, Greene, Louisa and Nelson Counties, as of 14 October, 2007:
There are 2,492 properties actively on the market right now.
2,444 properties have sold since the first of the year. (Down 22% versus 2006, down 25% versus 2005, down 19% versus 2004 and down 4.5% when contrasted with 2003)
Currently, we have 3,471 homes on the market and the median price of these homes is $329,000. The average DOM of these homes is 126 days. There are 588 homes for sale under $200,000 with an average DOM of 120. There are 262 homes currently on the market priced at a million dollars or more with an average DOM of 154.
There are 367 homes under $200k on the market (and I don’t have the ability to do the average DOM for that many properties) and there are 170 homes over one million dollars on the market.
A few choice quotes from the report, decidedly un-spun:
In the early part of the decade, we saw extremely low inventory levels of around 4 or 5 months of supply. This caused home prices to soar, as buyers were forced to make aggressive offers to purchase the home they wanted. Today, we have a 20-month supply of homes on the market, which is very high and possibly a record. We are just entering a quieter selling season with the holidays approaching, so we will likely see a continuation of high inventory into the spring. First-time buyers, who don’t have a home to sell, have an extraordinary opportunity in this market.
…
The seasonal aspect of the Charlottesville area real estate market allows us to draw year-end conclusions based on the first three quarters. The balance of the year is the “slow” time for sales, so unless there is a dramatic real estate swing, the third quarter will be reflective of the year-end situation. That means we will end the year with the 4th highest year for sales reported to the CAAR MLS. Prices will continue to rise slowly and inventory will continue to be the big story in the market.
Take note: the lenders do not consider the Charlottesville area a “declining market,” which is declared after a market has witnessed several consecutive quarterly declines. From an email from one of the lenders with whom I work : Northern Virginia is getting hammered; these counties are listed as being “declining markets” - Fairfax, Arlington, Clarke, Spotsylvania, Stafford, Warren, Fauquier, Prince William, Loudoun, Including the following cities: Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, Manassas Park - sharing the page with Florida and California.
In closing, we see little in this report that is different than the trends we have been tracking all year. Patience and preparation are key virtues for both buyers and sellers.
I’m sticking by my predictions from 1 January of 2007.
As always, all stories about our market statistics are here.
Technorati Tags: albemarle, charlalbemarle, charlottesville, fluvanna, greene
Houses are selling!
Believe it or not, they are. Removing condos from the equation -
In Charlottesville/Albemarle/Fluvanna/Greene:
141 properties sold in October 2006.
185 sold in October 2005.
196 in October 2004 and
194 in October 2003.
Putting condos back in the mix, as they have become the de facto choice for many seeking affordable housing, the numbers change a bit:
161 properties sold in October 2006.
203 sold in October 2005.
197 in October 2004 and
196 in October 2003.
Why only October? October is the most recent full month with closed transactions. Looking at the data through such a narrow window is bound to raise as many questions as it answers, but hopefully this helps provide a little bit of perspective for where we are. If you’re a first-time homebuyer, now would be a good time to start looking.
Technorati Tags: 141 , albemarle, charlalbemarle, charlottesville, fluvanna, greene
Central Virginia development moves on
Biscuit Run, the proposed development to the south of the City has been revised downwards from a proposed 5,000 homes to 3,500 homes. The traffic study work session next month should be interesting.
As always, Cvilletomorrow has much more information as well as a podcast of the planning commission’s meeting.
Wal-mart is finally coming to Greene County! If only NBC29 will stop with the bringing “green” to Greene lines. Hardy-har-har. So clever. There has been much discussion locally about the merits of Wal-mart, but I do know that my clients in Greene will welcome this addition to their community. Soon they won’t have to go to Culpeper or CharlAlbemarle,
Yesterday at an open house for a new development, I was interested to see that their solution, as approved by the County, to the affordable housing situation is to provide affordable “accessory apartments. (pdf)” At least it’s something. More at the County’s website.
Fluvanna’s clustering is moving forward and Daniel has his thoughts on the newest Fluvanna development.
Piedmont Environmental Council’s new report says that we have enough housing in the pipeline. (pdf)
I’ve said it before and I’ll say it again - studies that consider only Charlottesvile/Albemarle or Fluvanna or Greene are too myopic for today’s settlement and travel patterns. We need to look at development and its benefits and impacts from at least a regional point of view.
Housing inventory is up, but development plugs on, and for many, that’s a good thing. The various development industries add so much to our local economy that many don’t realize. Managed appropriately, growth can be good. Might as well attempt manage it, because it seems it’s going to happen anyway.
Tracking all of these things is almost a full-time job!
Technorati Tags: albemarle, charlalbemarle, crozet, fluvanna, greene, real estate
Housing numbers are down
And inventory is up.
Rates are low.
Home price appreciation is slowing.
Inventory is up. Significantly.
note: as soon as I figure out how to upload an image via coding, rather than depending on my normal program, I will.
Regarding NAR’s press release: They have an obligation to present the facts, and their best opinions. Everybody has opinions and interpretation of data. Assumptions and conclusions may (and usually do) differ.
Take this for example:
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – dipped 1.9 percent to a seasonally adjusted annual rate of 6.18 million units in September from a level of 6.30 million in August, and were 14.2 percent below the 7.20 million-unit pace in September 2005, which was the third strongest month on record.
“The good news is that fewer new listings are coming online. A stable sales pace is expected to draw down the number of listings to a supply balance that will support positive price growth within a few months. Taking the long view is always the best way to approach housing decisions, and right now, buyers are in a very favorable market.”
With the Calculated Risk’s “alternate” take on the report:
Sales plummeted 16.3% from September 2005. This is a record YoY (Year over Year) Sales decline.
Median Prices dropped 2.2% from September 2005. Bloomberg: “… the biggest year- over-year decline since record-keeping began in 1969.”
Locally in the Charlottesville region (inclusive of Charlottesville/Albemarle/Fluvanna/Greene/Louisa/Nelson), the market has slowed. Using a quick YoY analysis, in September of 2005, 333 residential properties closed. In September 2006, 211 closed - quite a drop year over year.
Listings under contract - September 2005 - 305 listings went under contract. In September 2006 - 214. Sit down. Take a breath. It will be ok.
And here you have the Virginia roundup from The Housing Bubble Blog, while Dewita’s calling NoVa a Buyers’ Market. A different one, but a Buyers’ Market all the same.
Market Data for July 2006
The past few months have seen some significant changes in our market. It’s not just the interest rates, though - they’ve actually gone down a bit of late. I am running the numbers a little bit differently as well.
*Active in July 2005: 456
Active in July 2006: 418
% change: -8.33%
Contingent: -16.74%
Pending: -29.31%
Sold: -20.02%
In short - the market has slowed. Some would say tremendously. Surprisingly, there were fewer properties on the market in July 2006 versus July 2005, but fewer of those are going under contract. The greatest jump in new-to-the-market inventory was in the second quarter of this year. The big difference is that more of these properties are staying on the market.
From an aggregate point of view, May, June and July -
There were nearly 4% more properties on the market for this time period in 2006 when contrasted with 2005, yet not nearly as many going under contract.
March/June/July
Active: 3.82%
Contingent: -2.32%
Pending: -13.48%
Sold: -5.62%
Bottom line (except for the asterisks): Real estate remains a wise investment. Everybody’s expectations need to be re-evaluated: buyers have time to decide, sellers need patience and agents need educating. The jump of discretionary sellers to the market may have reached or passed its plateau. One month is not enough to make that conclusion, but it may be an indication. Time will tell.
*Only for those properties in CharlAlbemarle, Fluvanna and Greene. As fuel prices have risen, the market has shrunk a bit.
**I excluded neither condos nor new construction for this analysis. Accessing and processing the raw data is extraordinarily time-consuming.
Technorati Tags: bubble, charlalbemarle, fluvanna, gas, greene, real-estate, realtor
Morning reading 03-21-2006
Madison County struggles with their comp plan and affordable housing.
Major subdivisions in Fluvanna County
Augusta County’s comp plan consultant fed up, pulls out
Afternoon links for 13 March 2006
Running government as a business - now there’s a thought. (via Commonwealth Conservative)
More to the point, Richman said, governments don’t have to make a profit - “they don’t have to satisfy consumers who can simply turn around and take their money elsewhere,” Richman said, “so they don’t face the same kind of pressures as businesses.”
Crozet to pass 12,000 - by the County’s own admission! (and here)
Bloggers and ethics.
Mark Warner profile - I think I really like this guy - he seems to understand that strict party-line thinking is past its prime.
Virginia’s thoughts on the region’s growth
In search of inspiration
Joe says: Internet 1, Real World, 0
Fluvanna struggles with growth
The last word, in substance if not in sequence, came from Supervisor Don Weaver (Cunningham): “A good question is does this Board want to slow down growth in the county. Either they do or they don’t … I always thought that’s what they [supervisors] wanted; maybe they don’t.”
Subscribe!
-
This work by Jim Duncan is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. -
