Their methodology is here. USA Today is good at presenting pretty shocking pictures.The good news – The Charlottesville MSA is the 82nd most overvalued MSA in the country…. (Please note the touch of sarcasm) We have seen a pretty dramatic increase – the area was statistically considered (by this data) to be 0.2% under-valued in the 1st Quarter of 2002 and now the area is 29% over-valued. Wow.Do you see the difference between these two statements? From the report: After determining what house prices should be, in this statistically normal sense, we compare those theoretical prices to actual prices to determine the extent of over-, or under-valuation.From USA Today’s byline: Metro areas’ first quarter housing prices with the greatest percentage above and below what they should be:Having someone say arbitrarily what a house price “should be” removes (to me) the free market’s influence. When buyers choose not to meet a Sellers’ asking price – that is showing that the house is over-valued. Locally, sellers seem to still not realized that the value of their home is not set by what they need to make; it is what a ready, willing and able buyer is willing to spend. They are slowly coming around – there have been nearly 80 price reductions in the MLS in the past three days.
Browsing Category Regional
New Construction Closing Dates
Builder: We’ll close on 28 June.Buyer: Really?Builder: Well, probably…. As close as we can…. You’ll still buy the house, though. And if closing is delayed because of your actions, you will be heavily penalized.The above fictional conversation is a close representation of the recent sellers’ market and new construction. As she is very prone to do, Ardell has written an excellent post at RCG about the potential perils of new construction.Last year, of the new construction sales wherein I represented buyers, only one was on time. One house was nearly three months late.All I will add is this – as the market shifts, builders are going to have to reach out to buyers more and make more accommodations than they have in the past. Builders are already making massive concessions…. The next 12 to 18 months are going to be interesting.
Anecdotal evidence on the local market
This article in the Washington Times is but one example: The downturn in the housing market is deepening, with new home sales at a nine-year low, prices down for the fourth month in a row and mortgage applications at their lowest point in three years. …”We see construction diminishing somewhat and real estate prices flattening, not declining,” she said…. I received this email the other day from a reader who is renting in the area – Did you see this article in Yahoo news?… If there is a compelling reason to to buy rather than rent and you plan to be in the area more than a short period of time, (insert my usual caveats here – if you have good credit, are mentally ready for the responsibility of owning, etc.) then you should probably consider buying…. They have been conditioned to getting at least the asking price, that some are unable to see the forest for the trees. Take the past few days for example – I wrote four offers, all of which are fair offers, based on the recent sold comparable homes.1) Asking price: $285k…. Just because a Seller is asking for a certain price does not mean that is what the property is worth. That said, if a ready, willing and able buyer wants to pay full price, that property is worth full price.
A brand new WINA.com!
Nice. Very nice. One of the best news sources in the area just got a new website. Check it out.
Growth roundup
Cascadia Rezoning in County Deferred Albemarle Continues to deal with Growth Western Growth shows no sign of slowing 51.6% of homes go rural Managing Growth:A perspective from Loudoun Supervisor Sprawl Poll Kaine Ably Abandons Growth…
Loudoun & Charlottesville
What I am listening to tonight: Managing Growth: A perspective from Loudoun County Supervisor Jim Burton.Will our community become even more ridden by sprawl and property tax increases? That’s what happened in Loudoun County, according to Jim Burton of the county’s Board of Supervisors.Courtesy of Cvillepodcast.
CharlAlbemarle market update
The market always slows in December-January-February. These numbers are … interesting. Using the MLS as my source, with my standard caveat that the MLS is not all-encompassing …Inventory for Charlottesville/Albemarle:Active in January 2005 – 229Active in January 2006 – 296% increase – 22.64%Contingent – 20% Pending – 24%Closings – 13%Active in February 2005 – 273Active in February 2006 – 372% increase – 26.61%For the entire Market Area:Active in January 2005 – 403Active in January 2006 – 516% increase – 21.90%Contingent – 20.21%Pending – 23.12%Closings – 32.61%What’s the difference between Contingent and Pending? Contingent indicates that a contingency remains, typically home inspection, financing, etc. Pending means that all contingencies have been met and both parties are merely waiting to close.More inventory, less homes going under contract, a sense of equilibrium in the market, even a shift to more of a buyers’ market is upon us. I remain confident that the increase in inventory is a sign of a healthier market, for two reasons – first, I think that if enough people say “the market is popping!” then we will witness a self-fulfilling prophecy act itself out.