Yes, there were 18 additional sales in Q1 2010 over 2009
- despite Q1 '09 being the depths of the "Great Recession"
- despite historically low interest rates
- despite the expanded Homebuyer Tax Credit for "First Time" and "Move-Up" buyers
- despite FHA loans pretty much available to anybody with a pulse, for amounts up to $437k, with a 3.5% downpayment
The only cause for optimism right now in the Charlottesville Area RE market is that there are 16 days before the Homebuyer Tax Credit expires. Sellers with equity can drop their asking prices.
So what's missing from the Charlottesville Area Association of Realtors Q1 '10 report? Some vital details about inventory, pricing, sales, as well as some broader perspective.
Buyers and sellers need more information so they can either make offers, or create reality-based asking prices, or just sit out the season. The CAAR report is, after all, the product of a trade association and sales people, and thereby an overview. Still, it is widely reported in media venues, some of which present the information as if it's a complete picture.
So here's some of what's missing:
The number of sales stated in the report --436-- (418 in '09) is for all property types rolled together--single family, condo, townhouse for all of Central Virginia. The percentage of sales of all types is reported as follows for 2010 over 2009:
But the numbers need the context of earlier years. The numbers below are 2009's declines over 2008 for Q1
Orange – 36.7%
1. There's been a huge drop in sales since 2005. And for some property types and areas, the drops have been more significant, when individual categories are examined.
2. For Q1 2010, Charlottesville had a drop in sales of -26.1% over 2009. Albemarle County has had a rise of +13.1% over 2009.
3. The "American Dream" category, single family homes, is the "indicator" of economic health, used by the Case- Shiller Index, the FHFA, the NAR, to track the housing market. But info about this category is missing. (Here's a bubble blog post for Albemarle's Q1 2010 numbers.)
4. Condos and townhouses are broken out in a separate category for Albemarle and C'ville--even though the sales and pricing have already been included in the numbers for "sales" and to calculate the area's median price.
5. New Home Sales: The report has a graph with a line moving from top left corner to bottom right...there's been a 75% decline in new home sales since 2006. This is actually the most devastating part of the report for those connected to the industry, as this is the only sector of RE that creates jobs. Sales create commissions, but building has a ripple effect.
6. How many closed sales were "short sales"? Is it 50%? 25%?
7. How many closed sales were foreclosure resales?
8. How many pending contracts failed to close?
There's a statement in the report that inventory for all of Central Virginia has declined this year compared to last year.
But in certain areas, and for certain types of property, inventory has risen. Inventory for the largest sector of sales in Charlottesville and Albemarle County, detached, single family homes has climbed significantly:
- In the City of Charlottesville in April 2009 there were 204 homes for sale.
- In 2010, there are 248, an 18% increase.
- In Albemarle County in April 2009, there were 666.
- In 2010, there are 798, a 17% increase
1. How many of the listings are "short sales"?
2. How many listings have asking prices less than what the seller paid, but are not, technically, "short sales"?
3. How many listings are foreclosure resales?
4. How many of these are "relistings"?
5. How many listings are vacant?
The "area median" of $235k given by the report is an aggregate of all types of housing units (condo, townhouse, single-family) and compilation of all geographic areas (7 counties and the City).
Medians for 2001-2009 are here.
But the aggregate number is way off indicating the much higher figures for single family homes, especially in comparison:
- City of C'ville - $349k (this week)
- Albemarle County - $465k (this week)
- National median of $164k for a single family home
2. There's no mention that the average sale price of a single family home in Q1 2010 in Albemarle County was $522,827; this is $55k less than in 2009.
3. The condo market is having a price (and sales) collapse. There's no mention of the extent of the problem, nor the reasons.
Perspective: The CAAR has brought in Virginia Housing Development Authority Senior Analyst Barry Merchant several times to tell members where this market is going over the next couple years. But the Q1'10 report doesn't put into context any of that information...because it's a marketing report, a tool to inspire confidence to buy; it's not giving buyers nor sellers, enough hard data to make an offer or to price the property to sell.
Bottom Line: It's not a "great time to buy." It won't be a "great time" to buy for years. It might be a necessary time to buy for some people who need a roof over their heads. But it wasn't the snow that was inhibiting sales: it's pricing and lack of qualified buyers. And April will be disappointing, even with the tax credit. And when the cred expires April 30, uh oh.
To Sum Up: Yes, it was just a marketing report. But it gets more news time than any other "marketing report" in this area. The Devil's in the details, as the old saying goes, and there were a lot of details left out. Buying a home is typically the largest investment of one's life...and buyers need all the help they can get nowadays. (Reported in local news here, and here, and here.)
Update: Some Current Market Reports (2nd Week of April) from @JimDuncan, RealCentralVA, can be found here and here.
Nest Realty Group's Double Digit Depreciation Forecast For Albemarle County
Zero Hedge: It's Impossible to "Get By" in Charlottesville...or Anywhere
Robert Shiller: Don't Bet That There Will Be A "Housing Recovery"
SeekingAlpha: National Home Prices Set to Decline
Robert Reich: Jobs Outlook Bleak--8 Million Lost, and Most Not Coming Back
Fannie and Freddie Set For More Foreclosures
One in 10 Virginia Mortgages Delinquent or in Foreclosure
The Automatic Earth: The Dorothy Theory Run Amok