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Seeking Normalcy in the Charlottesville – Albemarle Real Estate Market

Numbers matter. Today is the new normal when evaluating the Charlottesville real estate market. Last year’s market matters (as do the previous years) but what truly matters to buyers and sellers is what today’s market is.

Some context – the number of homes (single family, attached, condo) sold – in the first quarter – in Charlottesville and Albemarle since 1999:

# of sold homes in Charlottesville Albemarle

For this story, I’m not looking at Fluvanna, Greene, Nelson, Louisa as their growth seems to have started a bit after Charlottesville’s and Albemarle’s did, respectively. Right now, I’m seeking consistent volume in the real estate market.

Single family homes are the traditional marker of the market, for the sake of consistency. Attached homes have exploded in popularity (we’ll be looking at new construction numbers next week) in the past 5-7 years.

For anyone looking to buy a home in the Charlottesville-Albemarle markets right now, five key points to be aware of are:

Quality inventory is in high demand, low supply. Of the 550 homes (all types) in the MSA that went under contract in 1st Quarter 2013, 276 had days on market of less than 30, 214 had days on market of less than 14, 129 had days on market of less than 3! (57 had days on market of at least 300)

Overall inventory is up (surprised, right? Me too)

– Quality, well-priced homes are selling – fast. Often with multiple offers (I’ve written several escalation clauses in the past few weeks, if you can believe it)

– Being prepared – both as a buyer and seller – is crucial. Know the market; hire a quality real estate agent, prepare your house effectively.

– Be patient. If you’re a buyer looking in particular segments, you might have to lose at least one house in the process. I know it sucks. But there will be another house.

Single Family Homes - Albemarle County - 1st Quarter

Single Family Homes - City of Charlottesville - 1st Quarter

If you’re interested in the actual numbers, click through to see the rest of the story.

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The First Seven Months of 2012 – Charlottesville Real Estate Market Update

The Questions:

– Can I sell my house in Charlottesville (area) right now?

– Should I buy a house in Charlottesville (area) right now?

Answer to both: It depends.

Buyers: If you need to live somewhere and know you’re going to be somewhere for at least 5-7 years, now might be a great time to buy … ** interest rates remain extremely low. But … there is a dearth of quality inventory on the market right now. I’m finding that buyers are searching for (much) longer timeframes, so that when the right house does come on the market, they are prepared. Start early; do your research and be prepared to move quickly when the right house comes on the market.

Sellers: If you need/want to sell, understand that buyers are still looking for quality and value … and that selling a home is work. (It’s hard work; I task my seller clients with loads of prep work) , but know this: unless your home is one that is priced and conditioned to sell in two weeks, be prepared to be patient. And to defend your price with data and facts, not emotions and expectations — neither buyers nor appraisers care about what you need/want to make or how much the house is worth to you.


Year over year:

(Inventory level = # of homes on the market)

Charlottesville – Inventory level is down nearly 20%, median price is up slightly to $255k – up about 7% (but still way below 2010)

Albemarle – Inventory level is down a bit, median price is up about 5%

Fluvanna – Inventory is down about 8%, as is the median price.

Greene – Inventory is down a little and the median price is up significantly – about 30% … keep in mind that this increase was based on 11 closed sales this July versus 19 the previous July.

Louisa – Inventory down about 23% while the median price down nearly 20%

Nelson – Always an inconsistent market due to the variety of product mix there … Inventory is down about 12% while median price is down 24%.


The takeaways from this month’s look at “what’s happening in the Charlottesville real estate market”:

1 – In some segments of the Charlottesville – Albemarle MSA (Metropolitan Statistical Area), the buyers’ market looks like it’s over. Good houses that are priced well are moving … sometimes in a matter of days and occasionally with multiple offers. Inventory is down, some prices are up. (Low Inventory isn’t necessarily a sign of recovery though)

2 – Foreclosures and short sales are still out there, and are seemingly comprising a smaller portion of the market than we’ve seen over the past few years. But there are anecdotes everywhere – I almost showed a short sale in Albemarle in which the asking price is $450k … down from the initial asking price was $1.19 million … in 2008.

3 – I don’t feel like a complete fool saying that the recovery is near. I don’t know when “near” is, but I do know that “normal” is a moving and shifting target. “New normal” is an absurd term; today is normal. So is tomorrow. So is yesterday.

4 – Product mix shift – anecdotally, we’ve seen this coming, but we’re seeing more and more buyers are opting for single family detached homes as opposed to attached homes. Condo volume seems to be stabilizing … the condo buyer of today is more interested in the condo lifestyle (location, no maintenance or yard work) than we saw in the previous market*. What we’re also seeing is a demand for the condo lifestyle in single family homes; that solution doesn’t really exist yet, but there’s a market for it!

5 – Real estate market Data is but part of the conversation and analysis – experience and conversations with other experienced real estate agents matters tremendously. It might sound silly to in-lookers, but being able to tell that a property is great and will sell soon is crucial. Example: I showed a house on Saturday and told my buyer clients that I expected it to sell in the “next couple days” … then I heard Monday that the sellers got three offers. That insight comes from experience, not just looking at data. … and educating my buyers so that they are able to discern a well-priced, well-marketed home is one of my favorite things.

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Building a (Concrete) Home in Less than a Day

Concrete + 3D Printing =

How cool is this?

It can take anywhere from six weeks to six months to build a 2,800-square-foot, two-story house in the U.S., mostly because human beings do all the work. Within the next five years, chances are that 3D printing (also known by the less catchy but more inclusive term additive manufacturing) will have become so advanced that we will be able to upload design specifications to a massive robot, press print, and watch as it spits out a concrete house in less than a day. Plenty of humans will be there, but just to ogle.

Wow.

So I might want to invest in concrete stocks.

As noted earlier today, this technology may one day become “normal” or the “new normal” or simply “what we’re building with now.”

It might take less than a week to build a concrete house using this technology, but I’d wager it would take at least three to five years to get approval from Albemarle’s Architectural Review Board. 🙂

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Goodbye, 0-5 Buyer -OR- Finance a House or an Education?

We’re in the midst of a reset in the real estate market cycle. Every market is different, and we’ve been seeking “new normal” for quite some time.

Here’s part of the new normal, not just in the Charlottesville real estate market, but across society as well. (search for “new normal” on RealCentralVA for context)

The buyers who would buy and sell in a zero to five year timeframe are gone. In other words, the stepping stone of the “buying a home” lifecycle has been pushed further.

First time homebuyers, when they do choose to buy, are buying at later points of their lives – once they’ve established themselves in their careers* and found their mates if they so choose, and have determined that their lives – kids on the way, jobs … some sort of stability.

Many of these first-timers have either seen their friends and families decimated by the housing market or have experienced it themselves in selling or trying to sell – either normal transactions, short sales or foreclosures.

…

A report last fall indicated that student debt in America had reached $850 billion, nearly $25 billion more than the nation’s consumer credit card debt load.

Homeownership is a long-term decision. Given the choice – which are the next (current) generation of homebuyers going to choose –

Higher education or a home of their own?

The new normal, for the foreseeable future, is one without the 0-5 year buyers, one with an extended lifecycle of homeownership. And you know what? If we can just get the government to get the hell out of the way – stop making secret loans to banks, stop toying with being landlords, stop catering to the banks, stop trying to manipulate mortgages, and let the market work.

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