Charlottesville Real Estate Market Report – Third Quarter 2009

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Have we reached bottom? I don’t think so, but will say we’ve hit bottom when I have the benefit of 18 months of hindsight.

My prediction: we’re going to continue to see downward trending of prices until the third or fourth quarter 2010, followed by price stability/stagnation until homes start to appreciate again.

Here we are …

Right Now:

2,328 Homes actively for sale in the Charlottesville MLS in the Central Virginia area*

410 Under Contract

1,589 Homes have sold so far this year. **

Looking at the 2008 Third Quarter Market Report for the Charlottesville area:

Right now*, there are 2,380 homes on the market. 551 are listed as being under contract.

I hesitate posting these more than ever because this evolving/shifting market is so incredibly localized in some respects that the below statistics can be misleading, deceptive, or both. Here’s why:

In Albemarle County, there are 644 single family homes for sale in the Charlottesville MLS.

The least expensive home for sale is $49,000.
The most expensive home for sale is $18,000,000.

In the Third Quarter 2009:

228 Single Family homes sold in Albemarle County.

The least expensive home sold for $75,000. Original list price was $124,900.
The most expensive home sold for $7,200,000. Original list price was $12,950,000.

These two homes are weighted the same when looking at the top-level numbers.

* Charlottesville, Albemarle, Greene, Fluvanna, Nelson

** Right now is October 8, 2009 at about 11pm

Looking at inventory levels, days on market, etc: (pay no attention to the % Diff Sell/List – it’s likely very inaccurate)

The good news: inventory and days on market are down. Not so great news: we still have a ways to go before we burn through our existing inventory.

2006

Inventory History - 2005 - Charlottesville, Albemarle, Greene, Nelson, Louisa-2.jpg

2007

Inventory History - 2006 - Charlottesville, Albemarle, Greene, Nelson, Louisa.jpg

2008

Inventory History - 2008 - Charlottesville, Albemarle, Greene, Nelson, Louisa.jpg

2009

Inventory History - 2009 - Charlottesville, Albemarle, Greene, Nelson, Louisa-1.jpg

And a quick national perspective, courtesy of the US Census Bureau’s American Community Survey (pdf):

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Median Prices – for the Third Quarters of 2009 and 2008, respectively.

Single Family Homes in Charlottesville, Albemarle, Fluvanna, Greene, Nelson, 3rd Quarter 2009:

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Single Family Homes in Charlottesville, Albemarle, Fluvanna, Greene, Nelson, 3rd Quarter 2008:

Charlottesville Area Association of REALTORS® © 2009 LIST-IT-5.jpg

Attached Homes in Charlottesville, Albemarle, Fluvanna, Greene, Nelson, 3rd Quarter 2009:

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Attached Homes in Charlottesville, Albemarle, Fluvanna, Greene, Nelson, 3rd Quarter 2008:

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Condos in Charlottesville, Albemarle, Nelson, 3rd Quarter 2009:

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Condos in Charlottesville, Albemarle, Nelson, 3rd Quarter 2008:

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( (water hole photo courtesy)
(Einstein photo courtesy)

Unemployment: Is Hiring Around the Corner?

For the week ended October 3, Weekly Jobless Claims measured 521,000, comparing favorably against the previous week’s revised figure of 554,000. The periodic tally of new unemployment benefits filers reached its lowest flow rate since January. The count also proved better than the economists’ consensus forecast of 540,000, based on Bloomberg’s survey. As a result of the favorable figure, the four-week moving average also improved by 9,000, to 539,750.

Banks Under-reserving for Commercial Real Estate Losses

There has been a peculiar disconnect between the “the crisis is over, on with the recovery” drumbeat of news, and the sobering reality that a good deal of credit bubble overhang still remains to be dealt with.

One of the biggest areas is commercial real estate. Various experts, including Apollo Management’s Leon Black warned of $2 trillion in losses in the offing in the commercial real estate arena. Yet those losses seem not to have hit bank balance sheets and earnings.

FHA Bailout Seen

– “FHA is making much larger loans than in the past. Its top dollar limit is $729,500 versus its old top of $362,000 in 2008.” This exposes the FHA more to high risk states like California.


– The first-time homebuyer tax credit is being used as a downpayment, and Pinto draws a comparison to the horrible default performance of the DAPs (downpayment assistance program) loans.

Reis: Strip Mall Vacancy Rate Hits 10.3%, Highest Since 1992

Reis reports the strip mall vacancy rate hit 10.3% in Q3 2009; the highest vacancy rate since 1992. And rents are cliff diving …

Housing Slump Erased $3.4 Trillion of Wealth in 2008

As McKinsey points out, in 2008 the value of US residential real estate fell 10%. The global average fared only somewhat better, declining by almost 4%.

“We estimate that falling home prices erased more than $3.4 trillion of household wealth in 2008,” McKinsey wrote. “And because home prices are slow to correct, the current slide may persist for some time, which could depress global consumption.”

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