Friday, February 27, 2009

Charlottesville/Albemarle Market: January Sales and February Inventory

RealcentralVA has noticed an increase in buyer activity, and gives some anecdotal and Tweeted references to foot traffic and people looking.

But a commenter named Craigger summarizes the education level and the feelings of many local buyers as he describes this market and puts it in a national context:

Increased buyer activity is good news for realtors! Feb has seen a 50% increase in sales MoM!

Sounds impressive, until you realize Jan sales were 57, and Feb MTD are 79. Which is down about 66% since last year and even more since the totally bubblicious 06-07 period. Not so great is that current inventory is sitting at MORE THAN THREE YEARS. Plus Jumbo’s are 200bps higher than conforming, and Obama is looking to reduce the mortgage interest deduction for mortgages greater than ~500k. It’s hard to think higher priced homes will not go down 25% in general, with an extra 15-20% possible if the mortgage interest deduction gets polaxed. At least the government will reduce the incentive to waste tax payer dollars on subsidizing more house than any reasonable person would need.

"Craigger" could be one of us--that is, realists instead of optimists.

These are the numbers:

January Sales:
Sold in Cville
7 houses
2 condos/townhouses

Sold in Albemarle
17 houses
16 condos/townhouses

Add the rest of the region:
57 total

When compared with January 2008 sales, this is
approximately a +/60% drop in YOY; the drop is even wider from earlier years, as Craigger points out.

Nationwide, sales and inventory are so bad that they garner front page headlines. But they're nowhere near as bad as in this area. Nationwide new home sales were down 48% in January 2009. This is the lowest since 1963, when the CB began keeping track. Median price fell YOY 13.5%, and just over 10% from the previous month. Nationally, there are approximately 13 months of supply.

Nationwide, existing home sales were down 5.3% from December. In the South, they were down over 7%. YOY, they were down over 8%. 45% of sales in January were distressed (foreclosures, short sales), according to the National Association of Realtors. Inventory also declined to 9 months.

These numbers are significantly different than what's going on in this market, as "Craigger" noted, and which as one realtor put it is "essentially frozen."

Current supply in this area is now measured in years. More properties come on the market daily.

Currently for Sale: Charlottesville

182 Houses
132 Condo/Townhouses

Currently for Sale: Albemarle
585 houses
299 condos/townhouses

(All above numbers are most likely

In the entire Central VA region, there are about 3,400 properties for sale.
Median prices rose more than 70% since 2002 (according to CAAR as well as OFHEO and FHFA). But in many cases prices rose much higher, and don't seem to be striking many buyers as having "corrected" enough.

Posting about an uptick in buyer activity seems to be a response to our Sellers Trapped In Their Homes, and RealCentralVA's own "Learning From the Bubble Blog." Both were followed by many comments from what seemed to be interested but reluctant buyers who believe that prices in this area have not corrected themselves considering large market inventory, global economic slowdown, local economy, credit crisis, and that houses, like stocks, are not going to begin appreciating again for quite some time.

Optimism is great. So is being realistic, practical, and looking at the bottom line, as one recent commenter put it.

See: RealCentralVA Buyer Activity. Calculated Risk for New and Existing Sales and graphs. NAR's press release.


Anonymous said...

Serious buyer - Thank you Real C'ville for having the guts to synthesize and publish the reality vs. the fantasy of the local real estate market.

cville realtor said...

Jim Duncan's comments were taken out of context here. If you read his blog, he says that the "buyer activity" has not yet resulted in actual sales but with many Realtors reporting more showings and increased activity at their open houses, there is at least a sign that the tax credit and low interest rates could make a difference. That being said, sellers still need to understand that we are in a very price sensitive market and therefore, a realistic price given the market, is critical to getting their home sold

Real C'ville - The Bubble Blog said...

cville realtor, we did NOT take Jim's comments or post out of context. We took a comment off Jim's blog (as he has taken them off of ours) and put it in a post which describes January sales and February inventory.

We used the comment to indicate buyers' awareness of the condition of the market.

And if you go back to his post, to which we link, you'll see that we left a comment over there which basically says what you do, which is that a "realistic price" is "critical" in getting a home sold.

and me, wag. said...

apparently most people don't think it's a great time to buy. it's monday and the dow is down to 1997. how low will it go? who really wants to make big purchases right now?