Tuesday, January 26, 2010

A Picture's Worth 1,000 Words. But What Does This Picture Mean?

This image was on the cover of a recent Real Estate Weekly, the free newsprint advertiser distributed across Central Virginia by the Charlottesville Area Association of Realtors. 

What does that red arrow, on an erratic trajectory toward "up," mean? 

It can't be pricing, because according to the CAAR, prices are now back at 2004 levels. 

And it can't be historic sales, as sales are down dramatically since the peak of the bubble in 2005 ('06 for Cville) to 2009:
  • Louisa.................. down 27%
  • Greene..................down 38%
  • Charlottesville........down 41%
  • Albemarle............. down 47%
  • Orange..................down 49%
  • Fluvanna...............down 58%
  • Nelson..................down 65%
Below are the total sales numbers (condo, townhouse, single-family home) that the above percentages refer to, from the Charlottesville Area Association of Realtors, for 2005-2009: click for larger image in new window

And here's the comparison of the numbers for 2009 Sales vs. 2008 Sales:

There were 2,730 homes sold in the Charlottesville area in 2009.

2009 sales overall were down 8.7% (-261) from 2008.  

In individual locations, there was much more fluctuation:
Albemarle  +5.7
Greene +11.7
Charlottesville -19.9%
Fluvanna -15.4%
Louisa - 15.8%
Nelson -12%
Orange -20%. 

So it's not sales, and it's not prices.   Could the image be indicating a slight upturn in year-end sales that came from rushing to get the $8k First Time Homebuyer Tax Credit?  Could be.  But that makes little sense, as that kind of sales spike is temporary, not a market 'recovery' or indicator of the way 2010 will go once the  Homebuyer Tax Cred expires, again, on April 30.

Data and images Copyright CAAR.

Graphs of Sales, Price, Appreciation 


Dave Phillips said...

Hey Bub,
Thanks for helping our Google juice by linking to CAAR's publication. The red arrow is a 100 year graph of the CAAR Sputter Index - a new tracking index that combines home prices, sales figures and sarcasm with the collective IQ of Bloggers to predict where the market is heading. Frankly, I think the IQ of Bloggers is skewing the numbers, but we will not know for sure for another 99 years.

no name said...

It doesn't seem like there's much sarcasm in this post. The CAAR report has conclusions that aren't based on anything but "Hope." Like a new versionof the Obama campaign. And look where that's gotten us all.

Between this graphic, that Charles McDonald tBottom Feeders post and the nonstop rah-rahing, its easy to see why more people are doing the FSBO route.

Tim K. said...

Golly, I think Dave Phillips doth protest too much. Must've drank too much Google juice.

For local real estate analysis and tough-love commentary, I'd take the IQs of these bloggers over the combined IQs of CAAR any day.

craigger said...

I thought Dave's comments were funny. But given that a realtor's annual comp is probably tied more to the % change in the number of transactions rather than the % change in price, wouldn't it be better for the cover to have a line pointing straight down? If the price of something goes down, don't people tend to buy more of those things, not less? Dave, you should try it on the spring cover and see what happens [cover: SUNDAY, SUNDAY, SUNDAY - Open house EXTRAVAGANZA! Cville housing BLOWOUT! Take 30% off OR MORE! With government money printing THESE PRICES WON'T LAST!]

Dave Phillips said...

The chart goes up and I was trying to hint that this was becasue bloggers had a high IQ. Sorry my humor was not clear.

We have thought about announcing a clearance sale to get rid of some inventory of homes on the market, but CAAR does not have as much influence in the marketplace as Bub and others think we do. You did leave one line out of your proposed ad...BUT WAIT, THERE'S MORE!

REW Art Director said...

As the designer of the cover in question, I can assure you that there were no motives in selecting this image other than to produce a cover pleasing to the eye.

My intentions are to be creative, not conspiratorial.

Anonymous said...

Homes may be selling for 2004 prices, but the majority of list prices on CAAR still look like 2009. Not to mention the NEW listing retreads of homes taken off the market and now back since real estate has 'bottomed'. Transparency of completed sales transactions would go a long way towards clearing the market. Many communities publish the transfers in their local newspapers and/or realtors actively supply neighborhood comps.

nom said...

Like the cover, this kind of idiocy gives all real estate agents a bad rep:

703 Elliott Avenue MLS 473165 $190,500

In 2009, a perfect bungalow in Belmont went for $210 asking.

In 2010, a house that's had one owner in 40 years and is in such bad condition that it won't qualify for a conventional loan--NEEDS KITCHEN--screams the listing--has an asking price of $190k. SIXTY THOUSAND BELOW assessment screams the listing.

Does this agent not know what an assessment is?

BTW, REW art director, are you stating that you had final say on that graphic?

Isn't that worse than letting Dave Phillips approve? Turn it over to somebody not connected to the numbers?

Anonymous said...

It's clearly indicating the inventory level! Rising!

Anonymous said...

703 Elliott needs alot more then a kitchen...this place probably couldn't asses at 190