When comparing 2004 and 2007, sales in Charlottesville/Albemarle are down about 30%.
Between 2004 and 2007, sales are down, days on market are up, and the absorption rate is apparently nearly 3.5 times higher than it was in 2004 (this seems to be such a jump that it may be a data error). Notably however, and this should not be overlooked – average sales price is UP about 13%.
2004 Sold – Charlottesville & Albemarle – Single Family homes, attached homes and condos
2007 Sold – Charlottesville & Albemarle – Single Family homes, attached homes and condos
Inventory levels seem to be following a similar trend line as to that of years past, although greatly exaggerated.
Condos are removed because their impact on the market has long been argued to have been “propping up the market.” While they are a significant part of the market, they do not comprise a large enough percentage to shore the market up artificially.
2004 Sold – Charlottesville & Albemarle – Single Family homes and attached homes (no condos)
2007 Sold – Charlottesville & Albemarle – Single Family homes and attached homes (no condos).
We’ll know whether we’ve hit bottom today in 18 months when we have the benefit of hindsight. Interest rates remain low. Sellers are motivated, and it really and truly is a great time to buy a house – so long as you do the appropriate due diligence, detach your emotions and negotiate well.
Daniel has the 2006 versus 2007 statistics.
Below the fold are the numbers for the Central Virginia region. Regionally, sales volumes are down nearly 50% between 2004 and 2007. However – sales prices are up nearly 16%. Not a bad rate of return after three years. Buy smart.
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These are the numbers for attached homes regionally – While sales volumes are down, sales prices are up regionally nearly 25%.
Jim — you refer to a 13% price increase between 2004 and 2007 as if it’s a good sign. It ain’t, for a couple of reasons. First, the 2007 prices likely show a *decline* from same-quarter 2006 prices, so you’ve kind of cooked the books by comparing 2004 — the middle of the boomiest part of the boom — with 2007. Second, and perhaps more importantly, the really salient figure in assessing the direction of future prices is the ballooning number for current inventory. House sellers are stubborn — they don’t want to drop prices. But eventually reality sinks in, and they do. The fact that more and more homes are sitting on the market longer and longer suggests that the time when seller resistance breaks is coming ever closer. If I were talking to your clients, my advice would be: “If there’s any way you can wait, wait! Prices are very likely to be lower soon — and perhaps much lower.”
Hey there, AC. Thanks for stopping by again.
I agree with most of what you say, but disagree that I’ve “cooked the books” – I wish only that I could go back to 2002, but the MLS doesn’t make it efficient enough.
Real estate needs to be looked at from beyond a month-to-month, quarterly and annual basis. Looking at it from a longer timeframe is more appropriate.
Far too many of my buyers have told me, independently of the fact that I make my living representing clients, that now is a great time to buy – so long as one is buying for the right reasons and with the right statistical analysis backing up that process.
Here is a PDF showing 2006 -v- 2007 sales comparisons, and YoY, prices are generally still up (with one or two minor exceptions). If I could figure out how to post an image in a comment, I’d put screenshots here, but I think the PDF is more complete anyway.
Inventory- consider that Abington Place (152 TH units plus condos to come) and Woodlands of C’ville (300 units) are not in the MLS (properly). This also deflates the number of sales reported by MLS. Abington has sold at least 60 units and Woodlands has some sales too.
I’d bet that there are several other properties developed by regional builders that are not listed in the MLS as well.
Thanks for commenting SuperAnonymous.
You are absolutely correct. New construction is notoriously unreliable and devalues the data from the MLS. You won’t get any arguments from me.
However, the MLS is the best we have and does provide an accurate guide to the market.
Those two are the greatest “offenders” of not using the MLS well, though.
Jim — thanks again for this site, which I find valuable and well-balanced. And I agree with you that real estate is a long-term asset — a house is a slow-and-steady investment that also provides shelter; it’s not a growth stock! That said, I think it’s also true that the last seven years have seen people treat houses as growth stocks, and that’s a dangerous course that I think we’re in the process of reversing. And I’m concerned that the reversal is not going to be pain-free — even for folks who are buying with a medium to long-term horizon.
Here’s my bet, based on current inventory and absorption numbers as well as flagging local job growth — nominal housing prices fall in C’ville for the next two years; real housing prices (i.e., prices accounting for inflation) don’t start rising for another five.
That’s not a reason not to buy. But you better really want that house.
AC
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