The OFHEO has recently released their study looking at housing data for the first two quarters of this year (PDF).
â€œHouse prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment,â€ said Lockhart.Â â€œSignificant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom.â€
The data in this release only include price information through June.Â To the extent that recent mortgage market instability may have affected housing demand and prices, those effects would be evident in OFHEO’s next HPI release.
The chart at the right, courtesy of housedata.info, shows the appreciation rate of the Charlottesville housing market since 1985.
For the Charlottesville MSA,
– Our national ranking is 102
– The one-year rate of appreciation is 4.66%
– The second-quarter appreciation is .71%
– The five-year appreciation rate is 71%
The number that should be of most importance to most people is the five year rate of appreciation – the timeframe by which most people should now be basing their purchasing decisions.
For some context, in September of 2006, the Charlottesville MSA’s 5-year appreciation rate was 79.93% and our national ranking was 64. In 2Q of 2004, our 5-year appreciation rate was 52.86%, 2Q 2002 was 41.93%, and 2Q 2000 was 19.8%
In short, with all the turmoil that is happening right now, housing likely will remain a good long-term investment for most people. Buy smart. Sell smart. Don’t try to time the market.
This probably will not shock most of you, but sales in August took a significant dip. The 304 sales reported to the MLS in August were the fewest since 1998. Until August, the local market was soft, but doing well by historic measures. We had been tracking along with the 2004 numbers which were the third highest in local history. For the year, we are 620 sales behind last year (down 19.2%). As bad as that sounds, we are still on course to have the 4th highest sales year ever. The main concern in the market seems to be the negative press about the mortgage crisis. While our area is not part of the crisis, we are feeling the effects of this national problem.
Two things struck me about this – 1- the numbers aren’t great. 2- a Realtor association is actually acknowledging the market shift! (July’s data for Charlottesville is here)
The figure to the right, courtesy of the OFHEO report, shows the danger in tracking the housing market too closely and the value of looking at more than one data-set.
*These numbers do not necessarily reflect new-home cancellations.
*The Charlottesville Metropolitan Statistical Area consists of Albemarle, Charlottesville, Fluvanna, Greene and Nelson Counties
*The Case-Shiller home price index does not track the Charlottesville market specifically (PDF) – while it is an excellent source, using the Washington metro area to draw correlations to our market would be silly.