Charlottesville Real Estate Market Report Coming Monday
Whew. After five-plus hours of looking at data, crunching numbers, and thanking Google Docs, the Charlottesville area market report is finished and will be published on Monday. If you want an early look at the comprehensive report, please contact me.
A preview -
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New Construction, Median Sales Prices and Sales Volume for Central Virginia
Real Cville notes that that new construction permits in Albemarle County are down significantly, as is sales volume. The impact for local governments is going to be dramatic. They’re right - and these two data points are both good and bad. Building permits being down is a “good thing” - it means that less new inventory is being added to the market and thus buyers are going to be purchasing existing (resale) homes.
Albemarle County released numbers for the first part of 2008. 266 building permits for new residential housing units were issued in the first six months of 2008. This puts 2008 on target to meet the lowest number, yearly, since 1990, when anybody started keeping tabs. The record lowest number was 569 in 1995. The highest was in 2003 with 1,720 permits issued.
In short, volume is down, and prices are generally at 2006 levels. I am discounting the Charlottesville and Albemarle median prices because these numbers include condos.
From a seller’s perspective - if you don’t have to sell right now, seriously consider not selling.
From a buyer’s perspective - do your due diligence; it very well might be worth buying right now.
Note that the below data is inclusive of condos, attached and single family homes. One of my goals for next month’s third quarter market report is to pull condos out of the equation so that we can better compare apples to apples.
Update - the numbers below are from 1 January to 1 August, respectively.
2008
2007
2006
2005
2004
For an example of the condo component of the market (again, more detailed analysis coming in early September):
Condo volume in 2008 in Albemarle County is down nearly 40% and condo volume is down in the City of Charlottesville is down about 35%.
2006:
2007:
2008:
* this post is a good segue way into my post recapping my week so far in Austin, Texas.
Third Quarter Market Report Coming Soon
I intended to post an update in August, (even with the thought that we’re tracking the market too closely) but saw that too many properties were being slowly closed out in the MLS, and that the data wouldn’t be as up to date as I wanted. The Third Quarter market report covering the Charlottesville region* will be out no later than 10 October.
As I said yesterday in an email and on Twitter -
Every day I see contrasting nuggets of information that serve only to confuse me about the Charlottesville real estate market.
Making heads or tails of this market is a challenge, to say the least.
In the meantime, please feel free to take a look at all of the previous market reports and market analyses.
A Market “Retort”
The Charlottesville bubble blog, in inimitable style, posts their first-half 2008 Market Retort. Their prediction to a recovery? 2010.
A clarification on their stats:
There are 2595 properties on the market in the Charlottesville area, and 239 sold in July 2008, when defined as Albemarle, Charlottesville, Fluvanna, Greene, Louisa and Nelson. It’s not much, but it does push to 10% the percentage of properties sold via the MLS in July 2008.
I’ll be posting my own updated analysis in the next few days … it typically takes several days for all the data to be updated in the MLS.
Calculated Risk answers the question, Buy Now or Wait? with a definitive “maybe” - (sounds like my “it depends“)
Hong concludes with some sound advice: Don’t buy expecting appreciation, and don’t buy if you are planning on moving soon. The question “buy now or wait?” depends on the circumstances and desires of the potential buyer - so there is no general answer.
2nd Quarter Market Update for Charlottesville Region
Very little has changed since last month’s comprehensive market analysis, published just over a month ago.
First, a quick look back at my responses to the calls of “bottom” over the past eighteen months.
- The market is a bit like the axiom - “a watched pot never boils.” We won’t know how the market is doing today until we look back from a six- to nine-month removed perspective. We can gain insight by looking at the numbers - interest rates, 10 year Treasury notes, pending sales, recent solds … but to get an accurate understanding, we have to look in the rear-view mirror. December 2006
- We’ll know whether we’ve hit bottom today in 18 months when we have the benefit of hindsight. Interest rates remain low. Sellers are motivated, and it really and truly is a great time to buy a house - so long as you do the appropriate due diligence, detach your emotions and negotiate well. September 2007
- I think that the calls for the proverbial “bottom” are premature. When I was a kid I wouldn’t know the bottom of the swimming hole until my toes dug down into the muck and I was heading rapidly back to the surface. Our current market is very much the same. We won’t know when we hit bottom until we have the benefit of 18 months of hindsight - or, to continue the swimming hole metaphor, until we’ve crawled out and told our friends - holy cow! It’s really deep! April 2008
- 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. June 2008
- The problem with saying we’ve “hit bottom” is that we don’t have anything to base that on other than speculation Yesterday on Twitter
Even Barron’s is saying that we might have hit bottom; the Big Picture respectfully disagrees.
At least I’m consistent. I’m not saying that we haven’t hit the bottom, but that calling it as such with so many unknowns and new variables in the equation would be the wrong thing to do right now, despite Lawrence Yun’s statement - “Without Forecasts, we don’t look credible.”
The Realtor update (1):
1st half 2005: 115 had more than ten sides, 296 had more than five sides, 679 had at least one, with about five hundred or so not having a single transaction
1st half 2006: 107 had more than ten sides, 285 had more than five sides, 740 had at least one, about four hundred fifty not having one.
1st half 2007: 73 had more than ten sides, 232 had more than five, 687 had at least one, about four hundred with zero
1st half 2008: 44 had more than ten sides, 169 had more than five, 619 had had least one, leaving about seven hundred with zero transactions so far this year. (out of 1201 sold residential properties)
From the DP on Saturday:
Many real estate agents may not manage to weather the moribund market before it solidly rebounds, Savage said. A full 15 percent of the Charlottesville area’s 1,110 real estate agents are expected to drop out of the business by January.
“We’re seeing a lot of good Realtors leave the business,” she said, citing the example of two agents in their mid-30s who are quitting soon.
“It’s been a tough time for sellers and it’s been a tough time for Realtors,” Savage said.
Personally, this has been one of the hardest parts of this market - seeing good people leave.
Related reading: A Market in Transition - October 2006
An interesting note: 115 agents have done Dual Agency so far this year (and at least one who has spoken openly against the practice), versus 140 last year and 190 in 2006.
Market Update (2): - Click images for larger versions
Currently there are 2,622 properties on the market.
347 have CDOM of less than 90 days
Courtesy of one of my favorite writers in the real estate space:
“It’s a buyer’s market… only if you’re actually buying,” I say, having gone through this same exchange on more than a few occasions in recent months.
Conclusions:
- This too shall pass. We’ve been in this downturn for about twenty months now. I predict that we will start to come out of it in the Spring of 2009 at the earliest. Nothing is going to happen before the election, and little is likely to change before December of 2008. Early 2009 will be the time to recover, take our collective breaths and hope for what 2009 will bring. There are too many unknowns right now to make any sort of accurate prediction.
- All real estate cycles come around, and this one will be no different. I subscribe to an outlook that is a mix of Calculated Risk and Nouriel Roubini, in that this recession may look like a “U” rather than a “V” and I sincerely hope that it will not look like an “L.”
- New construction coming onto the market has slowed dramatically, and the number of builders in the Central Virginia region is waning. Ultimately, this may be a good thing.
- Those who survive this downturn (God-willing I’ll be one of them) will come out on the other side far stronger and knowledgeable about the market.
Managing fear is an ongoing task. News about IndyMac and the bailout of Fannie and Freddie is inescapable. Why is nobody listening to this man?
First half market report 2007, with interesting comments.
1 - Realtor Update includes Charlottesville, Albemarle, Greene, Fluvanna, Louisa and Nelson, ~1200 agents total, a “side” is either the buying or selling side of a transaction
2 - Includes Charlottesville, Albemarle, Greene, Fluvanna and Nelson
Charlottesville Area Market Report for 1st Half 2008 Released
The market report for the first half of 2008 has been released today, and the full report can be downloaded here.
Two snapshots from the report are telling -
My analysis will be coming on Monday; while the CAAR market report is quite good and comprehensive, its goal is much more regional than the analysis provided here. For example:
Currently, we have 3,761 homes on the market, just a few more than we had at this time last year (see chart below) and considerably less than the 4050 on the market at the end of May 2008. The median price of these homes for sale is $309,900. The average DOM (days on market) of these homes is 151 days. It is a great time for first-time buyers, because there are 744 homes for sale under $200,000 with an average DOM of 134. There are only 256 homes currently on the market
But when one drills down to Albemarle, Charlottesville, Fluvanna, Greene, Louisa and Nelson, there are 433 active properties under $200,000 - 122 of which are condos, 54 are attached homes and 257 are single-family attached homes.
More on Monday … in the meantime I’m looking forward to Real Cville’s take.
Friday Links - 06-27-2008
“A model for how to do rural development” - Bundoran Farm. Granted, with lots starting at $365k and going upward to $1.3 million, there is a very limited market. Bundoran Farm is a brilliant concept and implementation. It’s a shame that it costs so much to buy into what they are doing.
What is Neighborhood Friends? Very interesting.
The “steroids” come in the form of the features that should make NeighborhoodFriends.com attractive to the post-”Friends” set. A tie-in to Google Maps, for example, allows users to connect with neighbors who have also signed up for the site. And businesses and churches can create what amount to free web pages that advertise specials or serve as a conduit of information for church events or other happenings.
“What we’re trying to do is get communities back together again,” Rodes said. “Basically what we all do now is go home, get out of our cars, close the garage door, and most people, if they’re lucky, know who’s beside them, but they don’t know who’s two houses up. What we’re trying to do is connect people.
Downtown Charlottesville to be blanketed with wifi? (H/t cvillenews)
This is why I run data analyses manually - There is often more to the story than top-level computer generated data show. An automatically-generated analysis (via the Charlottesville MLS) of six representative properties in Albemarle County looks only at the difference between the Final Listing Price and the selling price, not the difference between the Original Listing Price and the selling price:
There’s data and then there’s data.
If you’re a real estate blogger, take five minutes to complete this survey.
If you’re a Realtor, please help one of our own; if you’re not, Charles Richey could still use your help.
An apology for the delay in promised posts. The Rent -v- Buy post is coming next week as well as the vacant houses and homeownership post.
Charlottesville and Albemarle Sold properties by price range
As promised last week and with apologies for the delay, this is the breakdown by price range of sold properties in Charlottesville and Albemarle for the first quarters of 2004-2008.
The $400,000 to $750,000 price range seems more stable than the rest, but take into account the following caveats -
* This is for all properties - single family, attached (townhomes) and condos.
* The data is from the CAAR MLS, and the data is only as accurate as those entering it.
* This is just for sold properties; I do analyses of inventory levels, absorption rates and number and percentage of under contract and withdrawn (likely due to rental) properties for my clients or for “paid-for” deeper analyses.
* Deeper analysis also takes into account days on market as well as whether Dual Agency was involved in specific sales.
* Google Docs is getting far better and easier to use than either Excel or NeoOffice.
* Foreclosures in the Charlottesville area are most likely excluded from the MLS data.
For an example of the condo trends in the Central Virginia region, see this chart:
* For some reason, I couldn’t figure out how to display the years in the legend, so I worked around it a bit.
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This work by Jim Duncan is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. -
