The market in the Charlottesville/Albemarle region is, shall we say, different from the way it was last year.
“It’s a great time to buy” – the new media blitz from the National Association of Realtors. I have said it before and will say it again – housing is not, nor has it ever been, an immediately liquid investment.
From the first of the year to 1 November:
2006: 498 Condos were sold in CharlAlbemarle
895 Condos were listed
2005: 379 Condos were sold in ChalAlbemarle
544 Condos were listed
So, yes, condos have been supporting the local market quite well. What happens when you break those numbers down a bit?
There are three kinds of lies: lies, damn lies, and statistics. –Benjamin Disraeli (Wikipedia disagrees w/ the attribution)
Figures don’t lie, liars figure. –Mark Twain (attributed to)
1BR condos: far more one bedroom condos were sold in 2006 compared to 2005, due primarily to the continued trend of condo conversions. Price per square foot in 2005 (due primarily to the much smaller sample size) was $189/foot. In 2006, that number is $215/foot. However, the average price in 2005 was $169k versus $159k in 2006.
2BR condos: Average price per square foot in 2006 – $195/foot. Average price per square foot in 2005 – $180/foot. Average selling price? 2006 – $196k 2005 – $197k.
*Note: I don’t place much weight in price per square foot; it’s not particularly relevant, but some people like it.
Regarding inventory for attached and detached homes (no condos) – there are about 35% more homes on the market now than there were this time last year, give or take a few percentage points.
*For the above inventory number, I used CAAR’s MLS Absorption rate: reflects the number of active listings on the market on the 28th day of each Month.The “Months of Inventory” column is equal to the “Current Inventory” divided by the “Monthly Sales.” This reflects how many months it would take to sell out of inventory at the current month’s rate of sale.
For a national perspective, the Wall Street Journal has an excellent article today. (Permanent, paid link) Pay attention to the great cartoon by an area resident.
Locally, new construction is seeing great changes as well. While I do not have access to the cancellation rates, I do know this – about 40% of all active new construction properties have seen a price change. This is a crude number, as this data shows only whether there has been a price change, not necessarily up or down. In the hot sellers’ market, builders would bump prices up the longer a property sat finished and unsold. This is not nearly as common today. Recently, however, two of the larger local builders have made significant price reductions across the board. This, to me, is big. The impacts of these price reductions are representative of a double-edged sword. Great for buyers, not so great for sellers of existing, competing homes.
*For this post, I am using only Charlottesville/Albemarle data, not the Charlottesville MSA.
In closing, buying is still a good idea. We are not in a “doom and gloom” market locally. What has changed is this – the philosophy used to be to “buy smart” and “sell smart.” In the recent run-up, buyers just tried to “buy,” as inventory was so scarce. Now – more time, analysis and thought go into purchasing decisions. And that’s not a bad thing.