Median home sale prices in the Charlottesville area for the first quarter

2002 2003 2004 2005 2006 2007

$164,000 $183,500 $209,500 $225,000 $289,900 $263,350

By Brian McNeill

bmcneill@dailyprogress.com | 978-7266

The median sales price for homes in the Charlottesville region dropped by $26,550 during the first three months of 2007 compared with the same period last year.

According to a new report by the Charlottesville Area Association of Realtors, the median home price fell from $289,900 during the first quarter of 2006 to $263,350 this year, a drop of 8.8 percent.

Prices have fallen, real estate agents said, because the number of available houses and condominiums has increased fourfold.

"Our demand for housing is still pretty high, but now we have plenty of homes for sale," said Dave Phillips, CEO of CAAR. "In 2005 and 2006, we had a shortage. So now prices are becoming more competitive."

Not every Central Virginia locality saw its real estate prices decline. The median sales price in Louisa County increased by $26,000, while prices rose in Fluvanna County by $17,650 and in Greene County by $9,925.

Nelson County suffered the most significant drop in median sales prices in the region, falling by $82,000. Nelson's decline shows a softening in the resort market, Phillips said, as sales at the Wintergreen ski resort slowed. Phillips speculated, however, that resort property sales would improve as more baby boomers opt to purchase a second home.

"Baby boomers are in their peak years for buying resort properties," he said. "All the demographics tell us that the market will bounce back."

Median prices in Albemarle County decreased by $54,450, while Charlottesville median prices fell by $24,000.

The more rural counties of Central Virginia may be experiencing stronger growth because prices are generally more affordable than can be found in Albemarle and Charlottesville, Phillips said.

The overall price drops reflect the Charlottesville area's transition from a seller's market during 2005 and 2006 to a buyer's market.

"There's an awful lot of buyers out there," said Jim Duncan, a real estate agent with Century 21 Manley Associates and author of the www.realcentralva.com blog. "They're taking their time. People are paying more attention and they're looking to buy smart, rather than just buying anything."

Overall, there were 706 homes sold in the Charlottesville region during the first three months of 2007, a 15 percent decrease from the same period in 2006.

The average number of days it took a home to sell jumped from 80 during the first quarter of 2006 to 109 in the first quarter of 2007.

Though the market has slowed from the boom times of the past two years, it appears to be on par with the regionâ€™s home sales statistics from 2004.

Plus, Phillips said, it appears that more buyers are beginning to enter the market, having waited to see if prices were bottoming out.

We're poised to have a really solid spring market," he said. "Lots of sales, lots of buyers."

Michael Guthrie, CEO and managing broker at Roy Wheeler Realty Co., said the Charlottesville-area real estate market is healthy and likely to grow.

"I feel very optimistic," Guthrie said. "I'm not saying it's going to go gangbusters at all, but I think it's going to be as good or better than 2006."

Duncan said purchasing a home in the Charlottesville region remains a good investment in the long term, though not as much for speculators.

"Those who buy with the intent to sell are going to be harmed most," he said.