Mid-Year Charlottesville and Albemarle Market Report – 2010 (Part 1)

Whew. The tax credit is over. Hopefully now the Charlottesville real estate market* can seek out normalcy, whatever that is.

This is Part One of at least Two. Two will publish on Wednesday.

Where are we now? Unfortunately, the questions from January remain.

I’ll lead with some charts:

Single Family Homes in Charlottesville and Albemarle, June to June:

Contracts for Attached Homes in Charlottesville and Albemarle:

Are condo sales leveling out? Contracts written** are at levels higher than the pre-condo-conversion time period. That said, the supply level of condos in the Charlottesville-Albemarle market is vastly higher than pre-2004. Watching the next three years will be telling, as we’ll be able to see just what the market for condos in Charlottesville really is.

Looking at the real estate market data for the Charlottesville market – or any market in the US – is skewed by the homebuyer tax credit, which has been demonstrably proven to have pulled demand forward to the first quarter of 2010. The only way we’re going to know what this year looks like is going to be to look backwards with the benefit of hindsight.

So where do we go from here? Schools in the Charlottesville area start around the third week of August (Albemarle – PDF (archived: 2011)), and we have about three months left before the annual doldrums set in. October – People are focused on Halloween. November – Thanksgiving. December – Christmas, Hanukkah, Holidays. January – It’s cold.

Now for some Second-Quarter context:

First, the obvious – when looking at the historical market data for Charlottesville and Albemarle, as single family homes’ prices increased, buyers looked to attached homes and condos. That trend seems to be moderating as prices moderate/drop/decline.

One way to look at the numbers above is to say that, last year we didn’t have the homebuyer tax credit; without it this year, the number of contracts written in Charlottesville and Albemarle would have been much lower. It is too early to make that conclusion. Talk to me this time next year. Another way to look at it is that the buyers this year were going to buy anyway, and that the homebuyer tax credit was simply a bonus.

And now for condos –

That peak? Condo conversions.

Basically, if you bought a condo in 2005 and 2006 and have to sell now? Don’t.

Condo sales and prices may have leveled – Walker Square has just reduced prices on its remaining developer-owned units, putting those condos more in line with demand’s expectations.

* Charlottesville, unless otherwise specified, means Charlottesville, Albemarle, Fluvanna, Greene, Nelson, Louisa. For this market report, I am focusing on Charlottesville and Albemarle.

** Contracts written – means that a property has been marked as “under contract” in the Charlottesville MLS.