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Primer for 1st Half 2012 Real Estate Market Update

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30-year fixed-rate mortgage - Wolfram|Alpha

I’m going to be running numbers next week – give some time for realtors to enter the closings in the Charlottesville MLS and for the delayed (there are so many*) closings to finally close.

This is just a primer for what is likely to be a long and comprehensive post next week.

Contracts written 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 213

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 51

Contracts written 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 255 (up 16%)

Attached homes in Charlottesville and Albemarle: 70

Condos in Charlottesville and Albemarle: 32 (down 37%)

Looking at the above data, a quick conclusion could be reached that more buyers are shifting towards purchasing single family homes as home prices have dropped. Next week, I’ll separate the City from the County, product mixes, and the rest of the Charlottesville MSA.

These numbers are likely representative, but not an entirely accurate picture of the Charlottesville real estate market because most closings tend to happen at the end of the month … come back next week.

Closed sales 5/1/11 – 6/28/11:

Single Family Homes in Charlottesville and Albemarle : 230

Attached homes in Charlottesville and Albemarle: 74

Condos in Charlottesville and Albemarle: 41

Closed sales 5/1/12 – 6/28/12:

Single Family Homes in Charlottesville and Albemarle : 229

Attached homes in Charlottesville and Albemarle: 60

Condos in Charlottesville and Albemarle: 36


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This is why Hindsight is Important (in Real Estate)

in General Real Estate Market statistics on

It’s easy to use hindsight as a blunt force, but it’s important to note that we’re not going to know whether today’s real estate data reflects a/the sign of market recovery or a positive blip on the chart until we have the benefit of hindsight.

My advice: Be patient, ask questions, be confident, seek competent representation.

From the Speaking of Real Estate blog:

Harvard University’s Joint Center for Housing Studies released its annual State of the Nation’s Housing report for 2012 and it very closely tracks comments made by NAR Chief Economist Lawrence Yun earlier this week at a CRE conference on what’s holding back the housing recovery.

The Harvard report, which always does a good job laying out in plain language what’s happening with the market, points to the increasingly strong market fundamentals and says home sales really could see serious improvement this year.

Sounds pretty ok, right?

And then I see @NickTimiraos from the WSJ tweet:

Harvard JCHS 2006: Fortunately, most homeowners have sizable equity stakes even if they can’t pay their mortgage http://www.jchs.harvard.edu/research/publications/state-nations-housing-2006

The Harvard report from 2006 says (in part):

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May 2012 Charlottesville Real Estate Market Report

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Dig in. There’s some good news here.

Download the Nest Report for May 2012 here  or read it below.

Of the 189 homes that sold in the Charlottesville MSA since 1 April 2012 with CDOM of less than 30 days:

– the % of list to sell price was about 95%

Of the 213 homes that sold in the same timeframe with CDOM of at least 120 days:

– the % of list to sell price was about 94%.

That looks like price doesn’t matter … until one keeps in mind that in the previous wildly broad and potentially inaccurate perspective, the list to sell ratio data can be so easily skewed.

If you’re looking at the Charlottesville – Albemarle real estate market, focus on your market – your segment of the market. That $1.95 million dollar house above? It’s as relevant to the $245k attached home as the fishing report on Saturn is to whether I’ll catch a fish this weekend.

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April 2012 Charlottesville Real Estate Market Report

in Albemarle Charlottesville Fluvanna Greene Louisa Market statistics Nelson on

Highlights:

– Days on Market (an inherently flawed data point) are down in Charlottesville, Albemarle and Fluvanna.

– Average Sales prices are down (not surprising)

– Total sales across the MSA are down (not surprising)

Thoughts/initial conclusions:

– More buyers are looking to be closer in/closer to stuff

– Good properties are selling and selling quickly

– Interest rates remain low – a good thing for buyers.

– I think we may have pulled the spring market forward a bit; the early spring may have pulled transactions into the earlier months of the year.

Dead simple Takeaways:

– Buyers: do your due diligence, don’t let emotion enter the equation and make sound, rationale decisions with the intent of holding the property for at least five to seven years

– Sellers: do your due diligence and realize that buyers most often don’t have to buy, but want to buy – it’s your job to make them want to buy your house. This means: price, presentation, perfection … and a great location and setting.

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I’ll Know Housing Recovery in Charlottesville When I’ve Seen It

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The housing recovery in Charlottesville (and presumably everywhere, but knowing this market is hard enough) is kind of like pornography.

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [“hard-core pornography”]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that. [Emphasis added.]

—Justice Potter Stewart, concurring opinion in Jacobellis v. Ohio 378 U.S. 184 (1964), regarding possible obscenity in The Lovers.

How will the “recovery” be defined? Is now the time to buy? (or sell?)

First, we’ll know by hindsight. When we have the luxury and the benefit of 12 to 24 months of looking back, we’ll be able to tell.

Transactions – volume of transactions – what is normal volume of sales transactions in the Charlottesville MSA? I don’t know; homeownership rates are declining. Last year, 1755 single family homes sold in the Charlottesville MSA (including Louisa). In 2002, 2479 single family homes sold. I’d put the “sustainable” rate of single family home sales somewhere in between those two numbers.

Price – stability or appreciation showing themselves

Foreclosures and short sales – fewer than today to none.

Shadow inventory – known and dispensed with; no longer a question of uncertainty.

So … is the housing market in Charlottesville recovering?

Calculated Risk says:

The debate is now about the strength of the recovery, not whether there is a recovery. My view is housing will remain sluggish for some time, and I expect 2012 to be another historically weak year, but better than 2011.

Maybe.

Consider this snapshot, from which I’m trying to :

In Charlottesville and Albemarle:

– 107 homes went under contract between 15 April and 1 May 2011. 64 of those were single family. 23 were attached.

– 144 homes went under contract between 15 April and 1 May 2012 – a 26% increase! – 92 (30% more) were single family. 23 were attached.

In the Charlottesville MSA (Charlottesville, Albemarle, Fluvanna, Greene, Louisa, Nelson):

– 156 homes went under contract between 15 April and 1 May 2011. 109 (70%) were single family.

– 186 homes went under contract between 15 April and 1 May 2012. 132 (71%) of those were single family.

That sure looks like we’re on the path to recovery, right?

In the MSA in the above timeframe, 22 of those contracts in 2011 were either short sales or foreclosures (6 & 16, respectively). In 2012, 19 of those were short sales or foreclosures (8 & 11, respectively). “A 14% decline in distressed contracts!” surely is a better headline than “3“, right?

It’s too early to tell with respect to foreclosures/short sales/distressed sales

Charlottesville Foreclosure Rate and Foreclosure Activity Information | RealtyTrac

My personal favorite:

“When will U.S. house prices recover? Likely never. But that’s no reason not to buy.” and believe it or not, the article reaches some salient conclusions, echoed by many if not most of my recent buyer clients’ decisions –

That’s why prospective buyers should stop focusing on the vague hope that house prices will jump from here and focus instead on the functional value houses provide for the money. In most markets, they provide enough of that to make buying a good deal.

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The Charlottesville Real Estate Market Update – In 8 Minutes or Less

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Thanks to Coy Barefoot for having me on his excellent Charlottesville – Right Now! show this afternoon. I tried to provide clear, quick analysis of the good, bad and possibly ugly in the Charlottesville real estate market – positivity framed with market realities and some context.

Listen to the podcast below.

Describing “where we are” in the Charlottesville real estate market is extremely difficult to accomplish in a short period 0f time; luckily there’s the 1st Quarter Nest Report for more in depth insight.

I think this tweet best describes today’s real estate market:

18 homes closed in CharlAlbemarle last week; Days on Market ranged from 0 to 863. $/sq ft from $89 to $227.#ThereIsNoOneMarket

As always, questions welcomed.

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