I liked this note quite a bit – topics ranging from a market update to Nest’s annual client party to two stories about buyers with vastly different buying experiences.
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Monthly Note Archives | A Question for You, Where’s the Market and Why Buy a Home
This note is one of my favorites ever, because it has two notes from clients, one of which is the epitome of why I do what I do, and why they bought a home. The second note highlight the necessary detachment a great Realtor needs.
Brief Real Estate Market Update for January 2014
A snippet from my monthly note:
Market Update for Charlottesville and Albemarle:
Single family home sales in December 2013 vs December 2012: 87/89 – Same, as far as I’m concerned
Single family home sales in 2013 vs 2012: 1302/1215 – Up 7%
Attached home sales in December 2013 vs December 2012: 23/24 – Close enough to be the same.
Attached home sales in 2013 vs 2012: 441/339 – Same
Condo sales in December 2013 vs December 2012: 6/13 – Down 54%
Condo sales in 2013 vs 2012: 167/234 – Down 29%
Keep in mind that these stats are likely not completely up to date, as agents are still entering in closings from 2013. But they’re likely close enough to say that there were a few more Charlottesville/Albemarle single family homes sales in 2013 than 2012, attached home sales were about the same and condo sales were way down (mainly because Walker Square condos sold out in 2012). And you know what? We’re due for some stability, free of spikes and drops.
List sooner rather than later (Y’know, I’m a Realtor. You could call me . 🙂 )
I suspect that we’re going to see more inventory as the year progresses.
More inventory means more competition and selection for buyers. More competition means potential price appreciation for sellers is likely to be diminished.
Looking in the Rear View Mirror – Previewing the 2nd Quarter 2013 Market Report
When looking at the real estate market (or any market, really) We’re always looking backward, thinking about today and trying to project tomorrow, next year and five years from now.
We’ll be posting tomorrow our 2nd Quarter Market Report for the Charlottesville area, and we’re making final edits and number crunching today.
I’m inclined to echo Bill McBride at Calculated Risk –
The “wide bottom” was what I was forecasting several years ago, and now I expect several years of increasing single family starts and completions.”
I think we’re in for at least 18 – 36 months of flatness, once the optimism of early 2013 fades and interest rates increase. Nota bene – The data below may or may not apply to you if you’re currently contemplating buying or selling. This is aggregate data – meaning if you’re looking for a single family home in Ivy with 4 bedrooms and 2.5 baths, the data and brief analysis below also includes affordable new construction in the City of Charlottesville, a $1.2 million home in Ashcroft in the County and everything in between. In other words, if you have specific questions, ask me. I’m a real estate agent .
That said, a few tidbits to whet your appetite for data for Charlottesville and Albemarle (Greene, Nelson, Louisa, Fluvanna coming tomorrow) –
Attached homes in Albemarle and Charlottesville* –
153 attached homes sold in Charlottesville and Albemarle in April, May, June of 2013 versus 107 in that same time frame of 2012 – a 70% increase in volume. A full third – 52 – of the attached homes sold were marked as “new.” (interestingly, only 4 attached homes sold in the Charlottesville MSA in that period).
If you’re looking at new attached homes, be prepared for little negotiation on price. If you’re looking at existing attached homes, be aware that you’re likely going to have more (and sometimes better) options as far as price and yard size.
Single family homes sales in Charlottesville and Albemarle
427 single family homes sold in the 2nd Quarter of 2013 in Albemarle and Charlottesville; 411 sold in the 2nd Quarter of 2012. I’d have been happy with flat sales, but a slight uptick is a good sign. In contrast with the attached home new construction numbers above, only 10% – 46- of closed sales in the 2nd Quarter of 2013 were marked as new construction. From my perspective, single family new home sales felt like they were more, but maybe that’s just because I’m around so much new construction all the time. (and this is a major reason I look at and embrace data over emotion and perception)
What impact will rising interest rates have on buyers?
1 – It will push some to act faster.
2 – It will cause some to not buy.
Looked at another way:
Buyers’ Purchasing Power
Let’s look at an example: A young couple is looking for a home and have predetermined that their budget will only allow them to spend $1,000 a month on a mortgage. At today’s mortgage rate of 4.5%, they could afford a $200,000 mortgage ($1,013 principal & interest). However, if rates jump to 5%, they would have to lower their mortgage amount to $190,000 in order to keep their monthly payment where they need it ($1,020). At 5.5%, the mortgage would need to be no more than $180,000 ($1,022).
The Impact on Prices
This decrease in buyers’ purchasing power will have an impact on home values going forward. We do not believe it will cause a decrease in prices. However, we do believe it will likely cause current rates of appreciation to slow.
Brief Look at Condo Sales in Charlottesville – 2nd Quarter 2013
Some quick numbers based on the 2nd Quarter market data for the Charlottesville MSA:
In the Charlottesville MSA: 35% fewer condos closed when comparing 2nd Quarter of 2013 to 2nd Quarter 2012 – 51 this 2nd Quarter versus 78 the previous 2nd Quarter. Why?
The answer is due in large part to the fact that the Walker Square and Riverbend condos, two of the largest condo conversions in the area, have sold out after long histories of conversion, rapid price appreciation, dramatic depreciation, ownership shifts and general market turmoil.
Consider:
– Last 2nd Quarter, 22 units sold in Walker Square. This year, that number is 5,
– Last 2nd Quarter, 8 units sold in Riverbend. This year, that number is 0.
One condo myth dispelled – condo financing is available in the Charlottesville area; you just need to know where to look.
Click through for the data.
Next up: attached homes in the Charlottesville MSA.
The Best, Most Popular Neighborhood in Charlottesville is …
(part one of two)
The Best, Most Popular Neighborhood in Charlottesville is …
Mill Creek. Redfields. Western Ridge. Bellair, North Downtown?
All of the above. None of the above.
The real answer to, “what is the best neighborhood in Charlottesville” – depends on you.
What does “best” mean to you?
Most popular? I could answer that by looking at the search data to determine what are the “most searched” neighborhoods.
How do you define “best” neighborhood ?
There are a lot of factors that go into the equation of “is this the ‘best’ neighborhood for me? These are some –
First Half 2012 – Charlottesville MSA Real Estate Market Report
So … the the first half of 2012 is over. Everyone is looking for signs of recovery in the Charlottesville – Albemarle real estate market – in large part because they want/need the answer to one of these questions:
1 – Can I sell my house/condo/townhouse now?
2 – Can I feel comfortable buying a house now?
The answer to both questions is (as long time readers know): it depends.
Spend some time digging in the data; ask questions, but understand that as localized as this report is, your market – your part of the county, neighborhood, street even is likely to be not be covered by this report. For a true understanding of how you fit into the market, seek professional help (full-time, not part-time/hobbyist advice). Seriously. I do this every. Single. Day. and I can’t imagine trying to make decision or give advice unless I was living and breathing real estate stuff.
– The Days on Market, while an unreliable data point, are down
– The shift to single family homes continues – buyers are buying for longer timeframes – they are buying homes in which to live for 5, 7, 10, 20 years. Smaller condos and attached homes frequently don’t meet those goals.
– Fluvanna was hot. But – Fluvanna has challenges beyond the real estate market that will continue to affect the market and the locality.
– Home prices are up in many segments in the Charlottesville MSA
Sales volume is up, inventory is down.
But … lower housing inventory is not necessarily a sign of recovery.
Lest we get too confident, keep in mind that lower inventory is not necessarily a sign of a recovery; there are a lot of upside-down homeowners who would love to sell but can’t. Until we see appreciation to the point where they can sell, we’re not going to see a true recovery.
In smarter words:
… in markets with unusually tight inventory, prices are being “goosed” higher, not because the housing market is improving, but because there are fewer houses in the game. Low mortgage rates are artificially creating excess demand, with those buyers fighting over the slim pickings of sellers who can actually sell.
But you know what? There’s nothing we can do about that; the market is what it is. We can acknowledge it and make the best decisions possible with the information, data and analysis available.
See:
– Brookings Institution’s Metro Monitor
– Corelogic’s most recent negative equity report (4Q 2011) shows that Virginia has 23% negative equity and 6% “near negative equity.” Lamentably we don’t have more localized data to the Charlottesville MSA. These numbers feel about right (broadly) for Charlottesville though; Fluvanna’s going to be different than Charlottesville and some condos are different than single family …
– Foreclosure Supply and the Housing Market –
Mark Hanson makes some interesting points, and this raises the question again of why supply has fallen so sharply. There are probably several reasons for the decline in supply: 1) negative equity keeps people from selling (and buying as Hanson notes), 2) banks aren’t foreclosing quickly and are focusing more on modifications and short sales, 3) cash-flow investors have purchased a substantial number of houses, especially at the low end, and they will not be sellers for some time, and 4) seller price expectations (when sellers expect prices to stabilize, they no longer rush to sell).