Thursday, August 6, 2009

The Charlottesville Area Real Estate Market Compared to the Rest of the State

We've had the local reports of how the Cville area RE market did in Q2 and the first half of the year, via the Charlottesville Area Association of Realtors and Jim Duncan of Nest Realty.

But what about the bigger picture? Sure, there's the saying that all RE is local--even "neighborhoody." But that idea only goes so far, especially when the rest of the State, and the Nation, are having more significant readjustments to Post-Bubble Reality...and having them faster.

The graphs below compare the Second Quarter of 2009 to the Second Quarter of 2008
for sales, median prices, average prices, and so forth, for Charlottesville as compared to the rest of the Commonwealth. The graphs are from the Virginia Association of Realtors.

The basic take away? Sales are way down--some would say tanking. Yet prices haven't dropped as significantly as buyers might expect. What's with the "stickiness?" And will it last?

We suspect not, when considering what will Q3 and Q4 bring:
  • The last few days of the selling season are already here.
  • Higher priced home sales, locally, are already struggling here, as they are nationwide.
  • And the "First Time Homebuyers Tax Credit," up to $8K, expires Nov. 30, which means the sale has to close by then.
  • A home going under contract in September may even be cutting itself to the bone to get itself closed.
  • Inventory will shrink, as sellers hallucinate--oops--pull their properties off the market to wait out the Winter. Then it will rise again.
  • But foreclosures, here and elsewhere, will rise--for higher priced properties whose owners expected their values to keep rising--and/or to be able to easily sell the property before the Option ARM reset/recast.
  • As will unemployment.
  • And with the darker days of Fall and Winter will come a more thrifty mood--so that $500K will start to seem really expensive--what $899K seemed like a couple years ago. That $229k starter home? Ouch. More affordable at $169K--and more in line with the National median.
But the basic truism here? 200o-2007 were anomalous. Those years, and the double-digit annual percentage increases, aren't likely to come around again--in our lifetime.

But to the graphs!

Click on graph for larger, sharper image in new window.

The Charlottesville MLS is rivaling rural areas, and areas with double digit unemployment, for declines in sales.

The Southern Piedmont, Martinsville, Henry, Patrick, aka "The Boonies," have more severe changes than here in Nirvana.

The Cville area rivals Harrisonburg/Rockingham, aka "The Sticks," in declines.

And yet, the percentage change in average sales price tells an interesting story:

Check out the Greater Piedmont.

Check out Martinsville, et al: But the average sales price was already low.

This area had the second worst decline in pending sales for the entire state:

Only the Dan River area, which has been decimated by job losses, had a bigger decline.

Look at that teeny tiny little blue blip, indicating percentage change in median sales price:

The high-end farmetttes and estates, and McMansions at $750K and above, have few sales, leaving the median steady.

Last, but certainly foremost, is the Virginia Home Sales and Price Summary by Area, Q2 - 2009 vs. Q2 - 2008.

Click on chart for larger, sharper image in new window.

Related Reading
Higher Priced Homes Sell At Snail's Pace
Lack of Move-Up Buyers in This Area
Cville MLS Sales Graphs: Declining Steadily
Cville Area Contracts Jan - Jun 09
US Housing Market: Nowhere Near the Bottom - T2 Partners
Half of American Homeowners Underwater by 2011 - Business Insider
Sell Your Home Now! - Charles Hugh Smith


Anonymous said...

But the basic truism here? 200o-2007 were anomalous. Those years, and the double-digit annual percentage increases, aren't likely to come around again--in our lifetime.

It will be amusing to read this blog again in a few years.

Debaser said...

Hi Anonymous,

Are you predicting that Charlottesville will again be experiencing 10%+ annual price growth in a few years time?

Mark Davison said...

One can take these statistics and use them to prove whatever he/she believes. That's why Mark Twain said what he said.
All real estate is individual.

not really said...

Real estate is only individual in Mark Twain's mind.

Let's say I paid $360,000 for the exact same house you paid $400,000 on the same block. I paid 10% less. I'm now the comp when you want to sell or refinance or get HELOC. Plus if you bought couple years ago and I bought this year I got a lower interest rate and $8,000 tax credit that doesn't have to be repaid.

If our incomes are otherwise equal I have more money and smaller debt load than you.

You might be satisfied with this if you think real estate is individual but most people would not be.