Wednesday, August 11, 2010

Albemarle County Townhouse Sales Plunge -63% YOYin July 2010

July is the first month in which completed sales happened without the (up to) $8k tax credit.  July numbers reflect contracts written in May and June, after the tax cred deadline of April 30.  The Federal Homebuyer Tax Credit ran from April 2008-April 2010 in various forms; in 2010, the tax credit was available not only to First Time Homebuyers, but also to many current owners.

Without the tax credit, this market's sales collapsed.  The strongest part of RE sales in this area are in the "under $300k" segment.  But these are buyers who need $$$ help for downpayments and closing costs.
  • Month over Month: June-July Sales Dropped -69%
  • Year over Year: July '09 - July 10 Sales Dropped -63%
Click for larger image in new window.

Townhouses have become the purchase of choice for many first-time buyers in this area because they're "affordable" (usually around $200k) and everything is bright shiny new.   Notice the Nov '09 spike: this came with the threat that the tax cred would expire.

The broader economy is slowing down, and the region's unemployment remains significantly higher than two years ago.   

An appropriate response to these sales figures, on the part of sellers, would be panic to re-evaluate asking price.  The big hope is that DIA will "save" the market.   Many websites  have been devoted to trying to drum up business from DIA/NGIC personnel  (have some Google fun and see all the websites for yourself).

Related Reading:  July 2010 Single Family Home Sales in Albemarle County Cliff Dive

The numbers in above graph come from this chart, provided by Nest Realty Group:

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