Thursday, July 9, 2009

Graphs: Declining Real Estate Sales in Charlottesville, Albemarle, Central Virginia

Real Estate sales have been declining in Central Virginia since 2005, even with upticks during Spring selling season. Inventory, however, remains consistently high; and pricing is just starting to enter the double digits in declines.

A picture can be worth more than a thousand words--a truism several readers recently embraced by submitting the following graphs.
These are pictorial representations of RE sales in:

  1. All of Central Virginia, 2003-2009
  2. The Charlottesville MSA (Metropolitan Statistical Area), 2005-2009
  3. Second Quarter Detached (single family) home sales in Charlottesville and Albemarle, 2006-2009
1. Sales in Central Virginia, 2003- 2009

This graph shows sales for the entire Central Virginia area since 2003. These figures are for all types of sales: detached, condo, townhome, farm, estate.

The Charlottesville Area Association of Realtors covers the Charlottesville MSA (City, Albemarle, Fluvanna, Greene, Nelson), but the website publishes inventory and sales for the entire region. As of Wednesday, July 8, there were 3,606 properties for sale.

The sales figures for each six month period appear in a second image below this graph. The graph's creator added an observation in lieu of label at the top of the graph.

Click on graph for larger image in new window.


To reiterate, below are the numbers plotted by the caret points on the graph:

Click on numbers for larger image in new window.


2. Sales in the Charlottesville Metropolitan Statistical Area, June 2005 - May 2009

Commenter Debaser sent the graph below, which shows sales in the Charlottesville Metropolitan Statistical Area. Sales are down about -45% from the peak in June 2006. These figures are for all types of sales: detached, condo, townhome, farm, estate.

Debaser used the sales data from market reports at RealCentralVA (click under "market data" at that site for a comprehensive list of reports).

There are currently 2,189 properties for sale in the Charlottesville MSA. This figure does not include "proposed" unbuilt properties that are searchable on the MLS.

The maroon line = sales.
The green lines = YOY changes.
The broken line = 12 months moving average.
Click on graph for larger image in new window.


The graph ends with the seasonal sales uptick in May. Notice each Spring there's a seasonal uptick in sales--but then there's the three season drop. And each consecutive year has significantly fewer sales than the last.

3. City of Charlottesville, County of Albemarle - Single Family Home Sales - Second Quarter 2009

SLR sent three graphs for the Second Quarter 2009, of single family, detached home sales in Charlottesville and Albemarle combined (that is, no other Counties in the MSA), for June, May, and April 2009.

Current Inventory:
201 houses in City of Charlottesville
665 houses in Albemarle County.
This does not include "proposed" unbuilt properties that are searchable on the MLS.
  • Second Quarter sales for 2009, at 244, are just slightly higher than sales for the month of June in 2006.
  • Q2 sales 2009 are down from Q2 sales 2006 by -48%; down -30% from 2008.
Click on graph for larger image in new window.


Above: June '09 sales are down -55% from 2006, down -32% from 2008.

Below: May
'09 sales down -40% from 2006; down -23% from 2008.

Click on graph for larger image in new window.


Below: April 2009 sales down -51% from 2006; down -34% from 2008.

Click on graph for larger image in new window.



(NB: number of recorded June 2009 closed sales may be a more variable figure than any of the other figures)

Last year we opined that this market might bottom in 2010. Is this possible? Consider:
  • The amount of additional inventory built or converted to sales properties in the past 8 years is out of line with population growth and buyer demand
  • Plus inventory keeps rising by sellers who bought 2002-2007 and have to sell
  • Plus inventory keeps rising by Boomers who want to downsize or retire
  • Plus inventory keeps rising by those who are leaving town due to lack of jobs (GenY) or being finished w/job at UVA
  • Combined with selling prices that only now show declines in the teen%s
  • Mixed with tanking national/global economy
  • Toss in fact that home prices far outpaced wages, years ago
  • And let's not forget there will be no new "career" paying jobs in the area for years
  • And everywhere suffers from a lack of qualified buyers, especially at the jumbo loan level
= Doesn't seem possible. Unless, of course, mortgage rates suddenly go down to 1% and area prices go back to 1999. LOL!

Related Reading:
The United States is Nowhere Near the Bottom of the Housing Crash - T2
Forecast For the Central Virginia Market - Virginia Housing Development Authority
Cville MSA Contracts January - June 2009 Via CAAR
What Did That House Sell For?
July 1 - Where Are We?

Gen Y Priced Out of Cville Market
Lack of "Move Up" Buyers in Cville Market

14 comments:

name/url said...

Fewer and fewer buyers from UVA?
UVA needs to cut budget again

http://www.c-ville.com/index.php?cat=1991704080566501&act=post&pid=12030907093333298

"Charlottesville is a Protected Market" said...

The phrase is officially dead! RIP! Casteen's letter to the community http://www.scribd.com/doc/17239009/

michael guthrie said...

Actually, as the CAAR mid-year report will show tomorrow, the inventory has decreased not increased. The difference is small but combined with June '09 pending contracts outpacing June
'08 pending contracts, there is some positive news out there as it relates to our area's real estate market. The median prices have also come down which means sellers are finally realizing they have to be competively priced to sell.

Anonymous said...

The idea that this lower inventory is somehow a sign of market strength is a bunch of bunk. The shadow inventory -- homeowners/investors that will list at the first sign of a market recovery, who have decided to rent out their homes, who have pulled their property off the market because they have no prayer of achieving sufficent sale proceeds -- continues to grow with each passing day.
This means that a recovery - should one occur - will be agonizingly weak and slow in materializing as the market struggles to work through this surging uncounted inventory. And it will likely threaten to forestall a recovery altogether as supply and demand again get out of balance.

Buyer said...

Michael Guthrie, there's only one line of spin in the CAAR report:

"Additional declines in prices are possible, but it will be hard to tell if these price drops are a result of more sellers finally pricing their properties based on the current market, or a real decline in home values."

The current market IS a "real decline in home values." It's one and the same. Actual values are declining HERE and EVERYWHERE else. And values aren't going to go back up quickly once they reach bottom. What would make this area separate from the rest of the US and much of the globe???

OTHERWISE, that was a good CAAR report. It had clear information and was the most realistic commentary I've ever seen in one of those. Thanks!

michael guthrie said...

Thank you Buyer--
If you saw only one "spin" that makes us happy. If you look at the cville bubble post above, you will see that I agree with the thought it will be awhile before home prices will go up.

Debaser said...

I agree with Buyer,

The market report was focused on information over spin but the line about whether price drops are based on the current market vs a real decline in home values had me scratching my head. Isn't a house's value defined by what it will sell for in the current market?

In the current report, the mid year sales volume listed for 2008 differs from the values in the 2008 Mid Year Report - e.g. Albemarle was listed at 473 sales for '08 and is now at 513, Cville was at 287 sales for '08 and is now 310. I'm not sure if this means new sales data become available or if one or the other of the reports has an error.

First quarter median prices were down 13.4%(Alb) and 6.5%(Cho) but sales were still down 18.7%(Alb) and 40%(Cho) vs 2008.

Over the last three months median prices have declined a further 3%(Alb) and 6%(Cho) but sales are still on track for a large drop compared to last year - 15.6%(Alb) and 35.2%(Cho).

I think the pertinent question is not when home prices will go up but how much more they will go down before sales start to level out, let alone increase.

The drop in prices over the first half of this year is still much less than the steep increase in prices during the bubble years.

If a recovery is tied to reducing inventory, its going to be either a long, long time coming at the current sluggish sales volume or will require sales to start increasing again which they show no signs of doing at the current prices.

michael guthrie said...

Debaser--
If you look at the 1st half market report (caar.com) you will see the rise in prices vs the decrease forms almost a perfect bell curve. One might think that prices haven't gone down as fast as they have gone up but in reality, median prices rose significantly from
2005-2007 and have fallen almost at the same rate from 2007 to today.

Anonymous said...

Uncalled capital commitments leave UVA's endowment vulnerable and weakened for years:
http://www.bloomberg.com/apps/news?pid=20601109&sid=anZb3tL0JdSU

Debaser said...

Hi Micheal,

Yes to a bell curve shape for the median price graph in the 2009 1st half market report but your 2008 1st half market report, which has data that extends back to 2002, illustrates that the steep run up in local real estate prices has not been erased by the most recent declines.

Showing median price and % change from the previous year

2002: 166,900
2003: 186,750 +11.9%
2004: 218,950 +17.2%
2005: 240,000 +9.6%
2006: 271,790 +13.2%
2007: 274,000 +0.8%
2008: 268,159 -2.1%
2009: 247,000 -7.9%

Do you feel the rise in median price from 167k to 240k between 2002-2005 is not relevant?

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

Another version of the graph that Debaser made, including one additional year, is in the next post:

http://realcville.blogspot.com/2009/07/graph-median-home-prices.html

stel said...

Great question from Debaser! "Do you feel the rise in median price from 167k to 240k between 2002-2005 is not relevant?"
Somebody who believes the rise is not relevant might also believe that
price declines are not part of "value" but just the market.
That would make a CMA a math exercise instead of a useful tool.

Dave Phillips said...

Debaser,
The numbers in the CAAR system change over time. Generally after a month closes, a few more transactions are reported late and account for the change in numbers from report to report. The numbers we use are a snapshot of the information in the system, but the data is live.

Carson said...

Graph #2 looks like the pulse of a dying man.