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Home Sales in Charlottesville Down, Contracts Up, Market Turning?

in Albemarle Charlottesville Market statistics on April 19, 2013 April 19, 2013

YOUR market will vary.

Even though this is what we believe to be an extremely accurate market report, it’s still a broad-brush report.

Mill Creek will have different inventory levels and absorption rates than will Old Trail, or the Gleason condos. As will different price points. i.e. – low absorption rate at $1 million + , high absorption rate in the $300k – $400k price point.

Dig in, get educated, ask questions, either in the comments below or email or call me anytime.

This is an example of how saying “sales are up” or “sales are down” doesn’t tell the whole picture.

For all residential sales year to date in the Charlottesville MSA:

Very broad takeaways –

– Inventory levels across the MSA are up, sales are down.

– Quality inventory is anecdotally way down

– In some market segments, multiple offers are common place.

– New construction is going to be a huge market segment – for better or worse.

– Being prepared to act fast – whether as a buyer or seller – is crucial.

The full report is embedded below, or download it here.

Seeking Normalcy in the Charlottesville – Albemarle Real Estate Market

in Albemarle Charlottesville General Real Estate Market statistics on April 11, 2013 April 11, 2013

Numbers matter. Today is the new normal when evaluating the Charlottesville real estate market. Last year’s market matters (as do the previous years) but what truly matters to buyers and sellers is what today’s market is.

Some context – the number of homes (single family, attached, condo) sold – in the first quarter – in Charlottesville and Albemarle since 1999:

For this story, I’m not looking at Fluvanna, Greene, Nelson, Louisa as their growth seems to have started a bit after Charlottesville’s and Albemarle’s did, respectively. Right now, I’m seeking consistent volume in the real estate market.

Single family homes are the traditional marker of the market, for the sake of consistency. Attached homes have exploded in popularity (we’ll be looking at new construction numbers next week) in the past 5-7 years.

For anyone looking to buy a home in the Charlottesville-Albemarle markets right now, five key points to be aware of are:

– Quality inventory is in high demand, low supply. Of the 550 homes (all types) in the MSA that went under contract in 1st Quarter 2013, 276 had days on market of less than 30, 214 had days on market of less than 14, 129 had days on market of less than 3! (57 had days on market of at least 300)

– Overall inventory is up (surprised, right? Me too)

– Quality, well-priced homes are selling – fast. Often with multiple offers (I’ve written several escalation clauses in the past few weeks, if you can believe it)

– Being prepared – both as a buyer and seller – is crucial. Know the market; hire a quality real estate agent, prepare your house effectively.

– Be patient. If you’re a buyer looking in particular segments, you might have to lose at least one house in the process. I know it sucks. But there will be another house.

If you’re interested in the actual numbers, click through to see the rest of the story.

Some Segments of the Charlottesville – Albemarle Market Have Turned

in Albemarle Charlottesville Market statistics on March 25, 2013 March 25, 2013

At least, after showing dozens of houses over the past few days and seeing many desired homes go under contract before my clients could get to them, this is my conclusion: Some segments of the Charlottesville – Albemarle real estate market have turned.

Not all. Maybe not most, but several, possibly even many micro-segments of the Charlottesville real estate market are seeing remarkably low, unhealthily low levels of inventory.

For example:*

In the Baker-Buter and Hollymead elementary school districts:

There are currently 36 single family homes under contract.

– 26 of those have continuous days on market of less than 30.

– 19 have continuous days on market of less than 7!

In Crozet and Brownsville elementary school districts:

There are currently 63 single family homes under contract.

– 44 of those have continuous days on market of less than 30.

– 36 have continuous days on market of less than 7!

In the City of Charlottesville:

– There are currently 69 homes listed as being under contract.

– 32 have continuous days on market of less than 30.

– 17 have continuous days on market of less than 7!

For Charlottesville + Albemarle:
– There are currently 323 homes under contract.- 121 have continuous days on market under 7. Holy. Cow.– But. 68 of those 323 homes have days on market of at least 180. – YOUR market will vary.

What does this mean?

For buyers – get ready. Be prepared (to be frustrated as well as ready to move fast). Be pre approved. Identify your target micro market, and be ready to act quickly. Bidding wars are happening. Houses are going under contract in days rather than weeks. Scheduling showings on Monday for a Saturday showing is no longer an option.

For sellers – now could be the best time in 7 years for you to sell. But â€¦ you might not have a place to move into.

* Excluding new construction. If you want new construction in Charlottesville or Albemarle, it’s everywhere; you can get it.

New Construction in Charlottesville and Albemarle

in General Real Estate on March 8, 2013 December 21, 2016

In short – there’s lots of new construction in Charlottesville and Albemarle.

It’s been said that 2013 is the year of the return of the spec house; we’re seeing more new construction than we’ve seen in years. Buyers have more options, sellers have more competition.

Four important and relevant stories before we get started:

– Why take a Buyerâ€™s Agent to new construction?
– Buying new construction without a Realtor? Read this first! (note: this builder is now no longer doing business in Charlottesville, but we have two national (and maybe a third on its way) builders now and many builders use their own contracts – caveat emptor – or: hire competent buyer representation!)
– Charlottesville â€“ A Healthy Housing Market (for New Construction) â€“ With some Context

– The most important home inspection in the new construction process

The evolution of the new construction market in Charlottesville* has been one where there were once dozens of homebuilders and now there are a handful. And that handful are building. A lot.

The ramifications of all of this construction are many. A few to start:

– Increased competition for existing homes
– Denuding of the landscape
– More choice for homebuyers
– The opportunity for homebuilders to differentiate themselves is more challenging than ever â€¦ if everyone offers granite and everyone offers hardiplank and everyone offers an open floor plan â€¦
– Those seeking to purchase homes now with resale in mind (that should be all of you) need to keep at least two things in mind:
1) The siting of the house matters (location, location, location)
2) You’re likely to be competing against new construction for quite some time.
– Some of the neighborhoods on the map have 5-10 homes to be built (Evangeline for example), some have 10-50 (Dunlora Forest) and some have 100+ (Old Trail)

View New construction in Charlottesville in a larger map

Real estate is local – and I’m thinking that our area may be leading the charge in a return to new construction.

Mike Simonsen from Altos Research writes (read the whole post – he describes a lot of important topics and segments of the real estate recovery):

Since 2007, new housing starts have been anemic. The long-term average construction rates are about 1.5MM homes per year. In the last six years, weâ€™ve averaged well under 1MM. And since 2009, the average is closer to 500,000. Meanwhile population and household formation keeps on trucking. The over-construction that happened in the bubble is a distant memory. See the chart to the right. Construction volume under the orange line are â€œundersuppliedâ€ conditions. The homebuilders imploded so profoundly after the bubble, that we havenâ€™t had this few new homes being built since 1959.

FHA Changes upon Us – More Expensive Loans, Fewer Buyers?

in Albemarle Charlottesville General Real Estate on February 27, 2013 February 28, 2013

I’m often told that the information provided here is educational. Part of my own education is knowing the right people to whom I both direct my questions and clients. As such, I’ll have a few posts in the next couple weeks from lenders whom I trust. First up is Matt Hodges discussing how FHA loans (which require at least 3.5% down payments and comprised about 10% *of the closed transactions in our market** in the past 14 months are becoming far less attractive. Next week’s post should be an interesting one, too.

FHA does not want to be your first choice, period.

Since December, HUD has been anticipating changes to the FHA loan program. On January 31, HUD released a mortgagee letter which changes the program. To read the entire mortgagee letter, click here.

The first change goes into effect on April 1st â€“ no fooling! Hereâ€™s what changes:

For loans less than $625,500 (which is everything in our market that uses FHA, as the high limit is $437,000 in the Charlottesville MSA), annual MIP increases 10 basis points (bps). This means that the $200,000 loan now costs $16/month more.

The June 3rd changes:

1. If one puts down 10% on a purchase, mortgage insurance premiums will last at least 11 years, which is up from the current 5 years.
2. If one puts down less than 10%, mortgage insurance premiums are PERMANENT, regardless of future loan to value.
3. 15 year loans with 78% initial loan to value no longer has annual mortgage insurance waived initially â€“ you must pay for 11 years.

The threat of lowered interested party (seller, Realtors, etc) concessions from 6% to 3% of the sales price, has not materialized yet. Our belief is that could prevent the lower priced homes from being able to use the FHA program, which might be discriminatory. It is still being considered, and it might have a ceiling and then tiered percentages below that.

Keep in mind, these changes are for pulling a case number, NOT closing. So, as long as we get the loan application done by March 29th for the first change and May 31st for the second set of changes we will still be using the current standards.

4. MIP = Mortgage Insurance Premium
5. Basis points = percent of the loan amount that you pay the insurance on. For example, 10 basis points on the annual MIP = .1% of the loan or $200,000 x .1% = $200 / 12 months = $16.67 per month.

Basically, talk to a great lender early in the process.