Market Slowing Down in Charlottesville? Probably

Is the Charlottesville area market slowing down?

Maybe. It’s too soon to tell. What I’m seeing is this:

The market certainly feels a bit slower; feelings don’t really matter, so let’s say my professional gut instinct says it’s slower.
Rates matter. They really matter.
Many homes that are coming on the market that are in good locations, well priced, well presented, are going under contract quickly.
Instead of 6-12 offers, homes that are lucky enough to get fast offers may be getting 2 to 5 or 6 offers.
Cash is still king

I’m burying the lede of % of asking below, as I wanted to sort of show my work (this is the best way for me to understand the market)

Looking at 24 April through 4 May ~11am (Sunday through Wednesday morning)

In the City of Charlottesville & County of Albemarle, 126 homes have been listed in the Charlottesville MLS**
- 93 of these are resale, and that’s what I’m looking at
- 56 are still listed as active
- 36 listed as pending – 41%

Looking at the timeframe of 24 April to 4 May 2021 (Saturday through Tuesday)

- 101 resale homes were listed
- 88 of those are listed as sold, 13 are expired.
- Of those 88
  - 49 had days on market of 5 or less
  - 59 had days on market of 7 or less – 67%
  - 62 had days on market of 10 or less – 70%
  - 65 had days on market of 14 or less
  - 74 had days on market of 30 or less
  - 11 had days on market of 60 or more
- Regarding the 74 under contract in 30 days or less – these homes sold, on average, for 103% of asking price
- And the 11 on market for 60 days or more? Sold for 95% of asking price

Price. Matters.

** one caveat with these numbers is the relatively new pandemic market timeline that we’ve seen with a lot of properties:

House is listed as a Coming Soon in the MLS on Monday or Tuesday
Activated for all the sites (realtor.com, zillow, etc) on Wednesday or Thursday
Showings start on Friday
Offers are evaluated on Sunday night or Monday
So … a house that might have had a “days on market” of 0 or 1 day shows as being on for 4 or 5 days.

There’s always more to the numbers.

As I wrote in January 2022

… my standard disclaimer/disclosure: your micro market will be different. Recently, I’ve written offers on houses in the > $1M range and in the ~$400K range. Each of these markets is very, very different. The market analyses I do for sellers in Spring Creek in Louisa will be very different than a house in the City of Charlottesville. If you have questions about buyer representation or seller representation, please ask. For this post, I got caught up on Nelson County, but finish with a quick look at Charlottesville and Albemarle. My tl;dr advice is similar for each of those markets.

tl;dr: homes prices are up, demand is solid, interest rates are nudging up, inventory is low, and great representation is crucial.

From the just-released CAAR Market report (download the PDF here)

There were 888 homes sold in the CAAR region during the first quarter. The number of sales was 17% lower than a year ago, reflecting 177 fewer sales. This is the third quarter in a row of year- over-year sales declines in the region.
Home prices continued to rise quickly in the CAAR area. In the first quarter, the median sales price was $389,900, which was up 13% over a year ago, a gain of nearly $45,000.
Inventory continued to fall in the CAAR region but at a slower pace. There were 472 active listings across the CAAR footprint at the end of the first quarter, which is just 3% fewer listings than this time last year. Supply expanded in some local markets around the region.

A few questions and conversations I’ve been having recently about housing, specifically in Charlottesville and Albemarle markets

How long can this market go on?
Our interest rates going to go to 7% or 8%, or come back down to 4%?
We’re not creating the first time homebuyer market that the housing market depends on. When I start at home is around $400,000, we’re putting a lot of people out of the market.
New construction prices for materials and labor, and everything else, don’t seem to be going down anytime soon.
There’s not enough land on which to build in Albemarle County.
- Albemarle has a survey about its growth management policy as part of the comprehensive plan update, AND everyone who applied to be on the county’s CP working group will get invited to be on a six-month group” – Link to the Daily Progress story here.
What will happen to the real estate agent population when the market turns?
What happens when buyers who bought it extremely exorbitant price today, need to sell in five years, and rates are at 8%?
What happens when buyers who bought at 3% move, and don’t sell their houses?